SECURITIES AND EXCHANGE COMMISSION
                                
                    WASHINGTON, D. C.  20549
                                
                            FORM 10-K
                                
(Mark One)

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

     For the fiscal year ended            May 31, 1997
                              ------------------------------------

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

     For the transition period from                to          
                                   ---------------    ------------

     Commission file number                  0-23588    
                           ---------------------------------------

                     PAUL-SON GAMING CORPORATION
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        (Exact name of registrant as specified in its charter)

            NEVADA                             88-0310433
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(State or other jurisdiction of             (I.R.S. Employer
incorporation or organization)             Identification No.)

 1700 South Industrial Road, Las Vegas, Nevada          89102
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   (Address of principal executive offices)           (Zip Code)

                           (702)  384-2425
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         (Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

                                         NAME OF EACH EXCHANGE
      TITLE OF EACH CLASS                 ON WHICH REGISTERED
                                                   
        Not Applicable                      Not Applicable
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Securities registered pursuant to Section 12(g) of the Act:
                                   
                    COMMON STOCK, $ .01 PAR VALUE
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                           (Title of class)
                                   
<PAGE>

     Indicate by check mark whether the registrant (1) has  filed
all  reports required to be filed by Sections 13 or 15(d) of  the
Securities  Exchange Act of 1934 during the preceding  12  months
(or  for such shorter period that the registrant was required  to
file  such  reports),  and (2) has been subject  to  such  filing
requirements for the past 90 days.           [X] Yes   [ ] No

     Indicate  by  check mark if disclosure of delinquent  filers
pursuant  to Item 405 of Regulation S-K is not contained  herein,
and  will  not  be  contained, to the best  of  the  registrant's
knowledge,   in   definitive  proxy  or  information   statements
incorporated by reference in Part III of this Form  10-K  or  any
amendment to this Form 10-K.            [ ]

     The  aggregate  market value of voting stock  held  by  non-
affiliates of the registrant as of August 22, 1996, based on  the
last reported bid price as reported on the Nasdaq National Market
of  $13 5/8 per share, was approximately $20,719,538.

     Indicate  the number of shares outstanding of  each  of  the
registrant's classes of common stock, as of August 22, 1997.

     Common Stock, $.01 par value, 3,421,500 shares

                                
               DOCUMENTS INCORPORATED BY REFERENCE
                                
     The  information  required by Part III  of  this  Report  is
incorporated  by  reference from the Paul-Son Gaming  Corporation
Proxy  Statement to be filed with the Commission not  later  than
120 days after the end of the fiscal year covered by this Report.

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PART I

ITEM 1.   BUSINESS

     Paul-Son  Gaming  Corporation,  a  Nevada  corporation  (the
"Company"  or  "Paul-Son"),  is  the  leading  manufacturer   and
supplier  of  casino table game equipment in the  United  States.
Currently the Company's products include casino chips, table game
layouts,  playing cards, dice, gaming furniture and miscellaneous
table  accessories  such as chip trays, drop  boxes  and  dealing
shoes, which are used in conjunction with casino table games such
as  blackjack, poker, baccarat, craps and roulette.  The  Company
is   headquartered  in  Las  Vegas,  Nevada,  with  manufacturing
facilities  located in Las Vegas and San Luis, Mexico  and  sales
offices  in  Las Vegas; Reno, Nevada; Atlantic City, New  Jersey;
Gulfport,  Mississippi; New Orleans, Louisiana;  Ft.  Lauderdale,
Florida;  Portland,  Oregon; and Ontario,  Canada.   The  Company
sells its products in every state in which casinos operate in the
United  States, and management believes that it has  the  leading
market share for most of its principal product lines.

     The  Company  also  has retail sales outlets  which  provide
casino-quality products for personal use, including poker  chips,
"Fantasy  Casino" chips, dice, playing cards and gift items  made
with  Paul-Son components.  Further, scaled-down gaming furniture
and accessories are also offered for personal use.  The Company's
retail outlets are an adjunct to its branch sales offices in  all
but the New Orleans, Portland and Ontario locations.

     The  Company  was  founded in 1963 by its current  Chairman,
Paul  S.  Endy, Jr. and initially manufactured and sold  dice  to
casinos  in  Las  Vegas.  In the more than  30  years  since  its
founding, the Company has expanded its product offerings and,  as
the  industry has expanded and gaming has been legalized in other
jurisdictions, its customer and geographic base.  As a result  of
this  growth,  the Company now offers a full line of  table  game
products.

     As  a  full-service supplier, Paul-Son manufactures products
to  meet  particular customer and industry specifications,  which
may include a range of shapes and sizes, varied color schemes and
other graphics, and security and anti-counterfeit features.   The
useful  lives  of  the  Company's products typically  range  from
several  hours in the case of playing cards and dice, to  several
months  in the case of layouts, and several years in the case  of
casino  chips and gaming furniture.  As such, the Company's  core
business is the ongoing replacement sale of these products.  When
a  new  casino opens, the Company strives to supply most  of  the
products required to operate the casino's table games, frequently
on   a  sole-supplier  basis.   When  successful,  revenues   are
generated both from the initial sale to the new casino and  on  a
continuing basis, as the new casino becomes part of the Company's
core customer base.

RECENT DEVELOPMENTS

  PAUL-SON'S DRAW POKER
  
     In July 1997, the Company entered into an agreement with Pit
Six   Gaming,  LLC   ("Pit  Six  Gaming")  to  be  the  exclusive
manufacturer and distributor of a new table game developed by Pit
Six Gaming to be marketed under the name "Paul-Son's Draw Poker".
The  agreement is for a period of six months, during  which  time
the  Company  will  have   the   opportunity   to   evaluate  the

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marketability  and demand for the new game. Under the  agreement,
the  parties will split equally any revenues from the game during
the  evaluation period. At the Company's option,  after  the  six
month  period,  the parties may enter into a long-term  agreement
wherein   the   Company  will  continue  to  be   the   exclusive
manufacturer  and  distributor of  the  game,  with  the  parties
dividing the revenues derived from the game on a 50%-50% basis.

  NON-GAMING PRODUCTS
  
     In  August  1997,  the Company  announced the formation of a
50%-50%  joint  venture   with   DeBartolo   Entertainment,   LLC
("Debartolo Entertainment") in a  newly formed limited  liability
company, Brand  One  Marketing, LLC ("Brand One").  Brand One was
organized for  the  purpose of marketing non-gaming commemorative
chips or "trading  discs" and commemorative playing cards to  the
sports, travel, and entertainment memorabilia markets.    Because
management of the Company believes DeBartolo Entertainment to  be
one  of  the  leading sports and entertainment promoters  in  the
United  States, management believes that this joint venture  will
allow  the  Company to enter the non-gaming promotional  products
and collectibles market on a national basis. The Company will  be
the  exclusive manufacturer and supplier of all products marketed
by Brand One.

BUSINESS STRATEGY

     During  its  more  than  30 years of operations,  management
believes the Company has established an excellent reputation  for
product  quality, reliability, customer service  and  value.   In
addition,  the  Company  has developed an extensive  distribution
network  and is licensed or authorized to supply gaming equipment
in  every  state in the United States in which such licenses  are
required.   The Company is also licensed or authorized to  supply
gaming  equipment  on a number of Native American  lands  and  in
Victoria,   Australia,  and  Ontario,  Quebec  and  Saskatchewan,
Canada.   The  Company has applications pending for licensing  in
British  Columbia,  Canada,  and Mpumalanga  and  Gauteng,  South
Africa.  The  Company's  strategy for  continued  growth  is  to:
(i)  capitalize upon its competitive advantages to  maintain  its
market  position for those products in which it  has  a  dominant
share  and thereby benefit from the expected continued growth  in
the  United  States casino market; (ii) upgrade its manufacturing
facilities  and  aggressively pursue market share  for  products,
such  as  playing cards, in which the Company does not  currently
have  a  leading share; (iii) expand internationally into growing
casino  markets,  including those in Canada,  Australia,  Europe,
South  America, Central America, Asia, Africa and the  Caribbean;
(iv)  enhance management's ability to respond quickly to  changes
in   market  conditions  by  upgrading  the  Company's  financial
reporting and management information systems; and (v) develop  or
acquire  new  products  which the Company can  sell  through  its
existing distribution network.

PRODUCTS

  CASINO CHIPS
  
     Paul-Son  designs and manufactures casino chips  to  meet  a
variety  of  customer  preferences and specifications,  including
size, weight, ability to stack, ease of handling, texture, color,

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graphics,   durability,   and   security   and   anti-counterfeit
features.   Casino  chips  are manufactured  from  a  proprietary
formulation   of   approximately  ten  raw  materials   using   a
compression molding system that management believes is unique  to
the  industry.   The Company has developed the  ability  to  mold
detailed graphics bearing casino logos or other designs onto both
sides   of   a  chip.   In  addition,  customized  security   and
identifying features are incorporated into a chip.

     A  casino  will generally order all of its chips,  including
replacement  chips after wear and usage, from a single  supplier.
Accordingly,  Paul-Son  strives  to  become  the  original   chip
supplier  to a casino upon its opening.  A new casino order  will
typically  include approximately five distinct  chip  colors  and
styles,  ranging  in  denominations  from  $1  to  $1,000.    The
Company's  selling price is generally between $.60 and  $.80  per
chip,  depending  upon  the specification,  design  and  security
features.   Given this relatively low cost and a chip's  expected
lifespan  of  five  or  more  years,  management  believes   that
competition is generally based upon factors other than price.

     To  protect  its market position and satisfy the demands  of
its  customers,  the Company continuously seeks  to  improve  the
quality  and  features of its chips.  For example, in  1993,  the
Company  introduced a new line of full-color chips with  detailed
customized graphics which cover virtually the entire  face  of  a
chip.   Also,  in 1993, the Company developed a chip featuring  a
wide  selection  of  popular pictures to be sold  to  individuals
through retail outlets and by mail-order.  Every year since  1994
the  Company has introduced improved formulations and  additional
security  features which are incorporated in the  manufacture  of
its casino chips.

     The  Company manufactures all of its chips at its facilities
in  San  Luis,  Mexico.  To meet the increasing  demand  for  its
chips, in 1993 and again in 1997, the Company expanded production
capacity  at  the  facility  to its current  annual  capacity  of
approximately 65 million chips.  Management believes  that  given
its  current  production level of approximately 18 million  chips
per year, the Company will have sufficient manufacturing capacity
to meet anticipated future demand.

     In  January  1994,  Paul-Son began to  market  commemorative
chips.    Management  of  Paul-Son  and  its   casino   customers
determined that casino patrons often retained casino chips  which
commemorated  certain  types  of  events  such  as  title  boxing
matches,  significant  anniversaries, and  premier  entertainment
events.   Casinos  benefit  to  the  extent  that  casino   chips
purchased are not redeemed, thereby resulting in added cash  flow
to  the casino.  Paul-Son believes that promoting such additional
benefits  to  casinos has assisted the Company in  sales  of  new
racks  of  primary  casino chips.  The Company is  also  pursuing
opportunities to sell commemorative chips outside of  the  gaming
industry.

  TABLE LAYOUTS
  
     Every  gaming table is covered with a felt layout containing
silk-screened patterns particular to each specific game, as  well
as multi-colored logos and other markings according to individual
casino preferences.  Paul-Son is the leading manufacturer of felt
layouts  in  the  United States, utilizing  high  quality  cloth,
enhanced   graphics,  and  proprietary  dye  formulations   which
management  believes result in the widest variety  of  customized
colors.

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     Layouts  are typically installed by Paul-Son on  new  gaming
tables  prior  to  delivery to a casino.  The  layouts  are  then
regularly  replaced by the casinos to maintain their  appearance,
generally within 60 days.  Layouts typically sell in a  range  of
$65  to  $325, depending on the type of table, the complexity  of
the   patterns   and   the  variety  and  difficulty   of   color
combinations.

     Since  December  1994,  the  Company  has  manufactured  its
layouts in its San Luis, Mexico facilities. The Company's  layout
production  capacity is approximately 50,000 "steam" layouts  and
24,000 "hand-painted" layouts per year.  Management believes that
the  capacity of its layout production facilities in Mexico  will
allow  the Company to increase layout production and continue  to
meet anticipated future demand.

     During  the  last  two  years, certain  competitors  of  the
Company  in the gaming supply industry have introduced  synthetic
nylon  layouts to the casino industry. Demand for these synthetic
layouts,  because of  their durability and longer wear, has  been
increasing   over   the  last  year.  To  date,   the   principal
disadvantage of synthetic layouts has been the limited  selection
of  colors  and  graphics.   Due to the  increasing  demand,  the
Company  has  sought to introduce its own line of technologically
advanced  synthetic layouts which will be available  in  a  wider
variety  of  colors  and graphics.  In August 1997,  the  Company
entered  into an agreement to procure the equipment necessary  to
manufacture  its own synthetic layouts.  Management believes  the
synthetic layouts which will be manufactured by the Company  will
be superior to synthetic layouts currently available, in terms of
colors and graphics.

  PLAYING CARDS
  
     In 1988, the Company began manufacturing and selling its own
line  of  paper casino playing cards.  A deck of cards  sells  to
casinos  for between $.85 and $2.00 and, based on casino industry
practices,  is generally replaced every eight hours or  less.   A
casino typically enters into a one year purchase commitment  with
a  supplier  to supply its cards at regular intervals,  generally
monthly.   Casinos  often  purchase  cards  from  more  than  one
supplier, as casino floor managers often have preferences  for  a
particular type of card.

     The  Company  believes that it is the fourth largest  casino
card manufacturer in the United States, currently providing cards
to  approximately 6% of casinos operating in the  United  States.
Given   the  Company's  relatively  low  market  share  and   its
established   distribution  system  for  table   game   supplies,
management  believes that playing cards represent  a  significant
opportunity for the Company.

     The  Company produces its playing cards in its Las Vegas and
San Luis, Mexico facilities.  The Company is currently completing
the purchase of additional manufacturing space in San Luis and is
in  the  process of purchasing the equipment necessary to  expand
its  playing  card  production capacity to 25 million  decks  per
year; up from the Company's current annual production capacity of
15 million decks.  Expanded playing card production capacity will
permit  management to aggressively seek new playing card business
from  its  existing casino customer base, from other casinos  and
from customers outside of the casino industry.

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     The Company also distributes plastic playing cards which are
used  predominately in California card clubs. Traditionally,  the
plastic  playing cards are preferred by the California card  room
market  while  the  paper cards are generally  preferred  by  the
traditional  hotel-casino  markets.   The  Company  is  currently
exploring  the  feasibility  of manufacturing  its  own  line  of
plastic playing cards.

  GAMING FURNITURE
  
     The  Company  sells  a variety of casino  gaming  furniture,
including  tables,  seating  and roulette  and  Big  Six  wheels.
Tables  range  in  price from $1,000 for  a  blackjack  table  to
$15,000 for a double roulette table and wheel. The Company offers
a "Premier" line of gaming furniture which has been the staple of
the  Company, and a "Select" line which was developed in 1995  in
response  to  the  industry's demand for a lower priced,  quality
line  of blackjack tables.  Management believes that the "Select"
line  enables the Company to compete with the price structure  of
its  competitors  while  maintaining Company  quality  standards.
Paul-Son  vigorously pursues gaming table sales because the  sale
of  a  gaming  table will generally bolster its ability  to  sell
consumable  products  such as layouts, dice,  chips,  cards,  and
other accessories to the table purchasers.  The Company buys  its
tables  in unassembled form from quality wood shops.  Tables  are
then  assembled by the Company and completed by adding  the  felt
layout,  drop  boxes,  trays and other accessories.   Table  game
seating   is   produced   by  nonaffiliated   manufacturers   and
distributed  by  the  Company.   In  January  1996,  the  Company
commenced manufacturing its own roulette and Big Six wheels.   By
manufacturing  the wheels, management believes the  Company   has
better  control over the quality of the wheels it offers  to  its
customers.

  DICE
  
     Paul-Son   manufactures  dice  at  its  San   Luis,   Mexico
facilities  from  cellulose  acetate specifically  formulated  to
provide the required clarity, hardness and dimensional stability.
The  Company offers a variety of spot designs, which are inserted
in  the  body  of the dice and machined flat to the  surface.   A
casino  may  request the imprinting of its name and  logo  (in  a
variety  and combination of colors), the insertion of a  security
"key" onto the reverse side of a particular spot, the addition of
a  security "glow" spot, the serialization of the dice, or all or
a combination of the above.

     Paul-Son  dice  are  manufactured  in  conformity  with  the
strictest standards of gaming regulators, which require that each
die be within 3/10,000th of an inch of a perfect cube.  The sales
price of casino dice currently ranges between $2.35 and $3.05 per
pair.  Generally, a set of dice (two and one-half pair) does  not
remain  in play for more than eight hours in a busy casino.   The
Company  currently  has  the capacity  to  produce  approximately
600,000 pairs of dice per year (based upon one production shift).
Casinos typically purchase dice from two or more suppliers.

  TABLE ACCESSORIES AND OTHER PRODUCTS
  
     In   order   to  offer   its   customers   a   full  product
line,  the   Company   sells   a  number   of   ancillary  casino
table   game    products     which    it   typically   does   not
manufacture.  These include  plastic   money    paddles,  discard
holders,  drop  boxes,  dealing  shoes,  trays  and  covers, dice
sticks  and  on/off  pucks.   These  products  are generally sold
in  conjunction  with  the  sale  of  gaming  tables    and  tend

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to  have long useful lives.  The Company generally maintains  two
suppliers for each of these products.

     In  order  to  compete with the increasing competition  from
manufacturers of these products who sell direct to the  Company's
casino customers, the Company began manufacturing its own dealing
shoes  in  May 1997, and may expand to manufacture other  plastic
table game accessories.

SALES, ADVERTISING AND PROMOTION

     The  Company generally distributes its products through  its
17  person sales force, which operates out of regional offices in
Las  Vegas,  Reno,  Atlantic  City,  Gulfport,  Mississippi,  New
Orleans, Louisiana, Ft. Lauderdale, Florida, Ontario, Canada  and
Portland, Oregon.  Additionally, the Company has distributors  in
New  Orleans,  Louisiana and Lima, Peru to sell its  products  to
licensed  casino  operations, either  land-based,  riverboats  or
cruise   ships.    Management  believes  that  the  long-standing
customer relationships which its individual sales representatives
have  developed  over the years and the Company's reputation  for
quality  and  reliability are key factors upon which the  Company
successfully competes in the market place.  From time to time the
Company  enters  into  agreements for  the  distribution  of  its
products on an exclusive and non-exclusive basis.

     During the fiscal year ended May 31, 1997, approximately 62%
of  the  Company's  revenue was generated by core  sales  to  its
existing  customers.   See "Item 7. Management's  Discussion  and
Analysis  of  Financial  Condition  and  Results  of  Operations-
Overview."  The Company's experience has been that once a  casino
buys from a table game supplier, it tends to purchase replacement
products  from the same supplier, provided quality,  service  and
competitive  pricing are maintained.  As a result, the  Company's
sales  efforts are primarily focused on selling a full  range  of
table   gaming  products  to  casinos  while  they  are  in   the
development  and  licensing stage.  By thereafter  maintaining  a
frequent contact program, the Company seeks to realize a steadily
increasing base of core sales, while capturing incremental  sales
to  new  casinos.   Management anticipates that as  the  industry
continues to expand, it may be necessary to open additional sales
offices in strategic locations in order to establish and maintain
these important relationships.

     The   Company  places  advertising  in  trade  publications,
produces  a  complete sales catalogue for the retail market,  and
participates in major casino industry trade shows.   The  Company
keeps  abreast  of  new casino openings through personal  contact
with   customer  casino's  management,  legislative   and   trade
publications and wire service press releases.  When  new  casinos
are  identified,  Company representatives make  personal  contact
with  appropriate officers and/or purchasing agents in  order  to
solicit the sale of the Company's products to such potential  new
customers.

MATERIALS AND SUPPLIES

     For certain of its products, the Company is dependent upon a
limited  number  of  suppliers to provide the  Company  with  raw
materials  for manufacturing and finished goods for distribution.
The Company's policy is to maintain two or more suppliers of such
raw materials and finished goods whenever possible.

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COMPETITION

     There  are  a  number  of companies that  compete  with  the
Company in the sale of each of its product lines:

     CASINO  CHIPS.  The casino chip product line has  in  recent
years  become  an  increasingly competitive area  of  the  gaming
supply business.  Currently, the Company's major competitors  are
Chipco International Ltd. ("Chipco"), Nevada Dice Company,  d/b/a
The  Bud  Jones  Company ("Bud Jones"), and VSR  Gaming  Supplies
("VSR").   The Company believes that key competitive factors  for
casino chip sales are durability, graphics, ease of handling  and
security.

     TABLE LAYOUTS.  The Company's three primary competitors  for
casino  table layouts are Bud Jones, VSR and Midwest Game  Supply
Co.  ("Midwest").  Management believes that the  key  competitive
factors  for  table  layout  sales are  cloth  quality,  enhanced
graphics,  designs and clarity and range of colors.  In addition,
certain  synthetic layouts are now being marketed in  competition
with  the traditional cloth layouts manufactured and sold by  the
Company.

     PLAYING  CARDS.   The  major  competitors  in  the  domestic
playing card market are The U.S. Playing Card Co., Gemaco Playing
Card  Co.  and  Hoyle  Products.  Management  believes  that  the
primary competitive factors for playing cards are price, ease  of
handling, durability, brand name identification and reputation.

     GAMING  FURNITURE.  The Company's principal competitors  for
casino  gaming furniture are Bud Jones, VSR and smaller  regional
wood shops in certain geographic areas.  Competition is based  on
quality, price and durability.

     DICE.   The Company's principal competitors for casino  dice
sales  are  Bud Jones, VSR, T.K. Specialty Company  and  Midwest.
Management believes that the primary competitive factors for dice
sales  are  quality  and  pricing.   In  addition,  casino  shift
managers  typically prefer that casinos purchase dice  from  more
than one supplier due to industry superstition that dice from one
of its suppliers may run "cold" for the house from time to time.

     TABLE   ACCESSORIES  AND  OTHER  PRODUCTS.   The   Company's
principal  competitors  for distributing  table  accessories  and
other  products,  which  include plastic money  paddles,  discard
holders, drop boxes, dealing shoes, trays and covers, dice sticks
and  on/off  pucks, are Bud Jones, VSR and Midwest.  The  Company
believes that key competitive factors for these products are  the
ability  to  be  a  single  source supplier,  price  and  product
quality.

EMPLOYEES

     At  August 22, 1997, the Company employed 491 persons,  with
93  in  Las  Vegas,  Nevada,  380 in San Luis,  Mexico,  and  the
remainder  in  regional  sales offices.  None  of  the  Company's
employees is covered by collective bargaining agreements.

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REGULATION AND LICENSING

     NEVADA.    The  manufacture  and  distribution   of   gaming
equipment  in  Nevada are subject to extensive  state  and  local
regulation.   The  Company's  operations  are  subject   to   the
licensing  and regulatory control of the Nevada Gaming Commission
(the  "Nevada Commission"), the Nevada State Gaming Control Board
(the  "Nevada  Board")  and  various  local  regulatory  agencies
(collectively  with the Nevada Commission and the  Nevada  Board,
the "Nevada Gaming Authorities").

     The  laws,  regulations and supervisory  procedures  of  the
Nevada  Gaming  Authorities  seek  to  (i)  prevent  unsavory  or
unsuitable  persons from having a direct or indirect  involvement
with  gaming  at any time or in any capacity, (ii) establish  and
maintain   responsible  accounting  practices   and   procedures,
(iii) maintain effective control over the financial practices  of
licensees, including establishing minimum procedures for internal
fiscal  affairs  and  the safeguarding of  assets  and  revenues,
providing  reliable record keeping and requiring  the  filing  of
periodic reports with the Nevada Gaming Authorities, (iv) prevent
cheating  and  fraudulent practices, and (v) provide  sources  of
state  and  local  revenues through taxation and licensing  fees.
Changes  in such laws, regulations and procedures could  have  an
adverse effect on the Company's operations.

     Paul-Son   Gaming   Supplies  ("Paul-Son   Supplies"),   the
Company's   wholly   owned  subsidiary  which  manufactures   and
distributes  casino  table  game equipment  used  in  Nevada,  is
required  to  be licensed by the Nevada Gaming Authorities.   The
gaming   license  is  not  transferable  and  must   be   renewed
periodically.   The  Company is registered as a  publicly  traded
corporation   by   the  Nevada  Commission,   and   is   required
periodically  to submit detailed financial and operating  reports
to  the Nevada Commission and furnish any other information which
the  Nevada  Commission  may require.  No  person  may  become  a
stockholder of, or receive any percentage of profits  from  Paul-
Son  Supplies without first obtaining licenses and approvals from
the Nevada Gaming Authorities.  The Company and Paul-Son Supplies
have  obtained  from  the Nevada Gaming Authorities  the  various
approvals,  permits and licenses required in order to  engage  in
its manufacturing, distribution and sales activities in Nevada.

     The Nevada Gaming Authorities may investigate any individual
who has a material relationship to, or material involvement with,
the  Company or Paul-Son Supplies, in order to determine  whether
such  individual is suitable or should be licensed as a  business
associate of a gaming licensee.  Officers, directors and  certain
key  employees  of Paul-Son Supplies must file applications  with
the  Nevada Gaming Authorities and may be required to be licensed
or  found  suitable by the Nevada Gaming Authorities.   Officers,
directors  and key employees of the Company who are actively  and
directly  involved  in  manufacturing,  distribution  and   sales
activities of Paul-Son Supplies may be required to be licensed or
found  suitable  by  the Nevada Gaming Authorities.   The  Nevada
Gaming Authorities may deny an application for licensing for  any
cause  which  they deem reasonable.  A finding of suitability  is
comparable to licensing, and both require submission of  detailed
personal   and  financial  information  followed  by  a  thorough
investigation.   The  applicant for licensing  or  a  finding  of
suitability must pay all the costs of the investigation.  Changes
in  licensed  positions must be reported  to  the  Nevada  Gaming
Authorities  and  in  addition to  their  authority  to  deny  an
application for a finding of suitability or licensure, the Nevada
Gaming Authorities have jurisdiction to disapprove a change in  a
corporate position.

                               10
                                
<PAGE>

     If  the  Nevada Gaming Authorities were to find an  officer,
director  or key employee unsuitable for licensing or  unsuitable
to  continue  having a relationship with the Company or  Paul-Son
Supplies   the  companies  involved  would  have  to  sever   all
relationships  with  such  person.   In  addition,   the   Nevada
Commission  may  require  the Company  or  Paul-Son  Supplies  to
terminate  the  employment  of any person  who  refuses  to  file
appropriate  applications.  Determinations of suitability  or  of
questions  pertaining to licensing are not  subject  to  judicial
review in Nevada.

     The  Nevada  Commission may also require the holder  of  any
equity  of  a  corporation  registered under  the  Nevada  Gaming
Control Act (the "Nevada Act"), regardless of the amount held, to
file  applications, be investigated and be found suitable to  own
the  equity security of a registered corporation.  If the  Nevada
Commission  determines that a person is unsuitable  to  own  such
equity  security, then pursuant to the regulations of the  Nevada
Commission,   the  registered  corporation  can  be   sanctioned,
including  the  loss  of  its approvals,  if  without  the  prior
approval  of  the Nevada Commission and following a determination
of  unsuitability,  it  (i)  pays to the  unsuitable  person  any
dividend,    interest,    or    any   distribution    whatsoever,
(ii)  recognizes  any voting right by such unsuitable  person  in
connection with such securities, (iii) pays the unsuitable person
remuneration  in  any  form, or (iv) makes  any  payment  to  the
unsuitable  person  by way of principal, redemption,  conversion,
exchange,  liquidation,  or similar transaction.   The  applicant
must pay all costs of investigation incurred by the Nevada Gaming
Authorities in conducting any such investigation.  If a  security
holder  is  found  unsuitable, the Company may  itself  be  found
unsuitable  if it fails to pursue all lawful efforts  to  require
such   unsuitable  person  to  relinquish  such  holder's  voting
securities for cash at fair market value.  The Company's Articles
of  Incorporation require a person found unsuitable to relinquish
such person's voting securities upon demand of the Company.

     The  Nevada Gaming Authorities have the power to investigate
at  any  time any record or beneficial stockholder of a  publicly
traded  corporation registered under the Nevada Act.  Nevada  law
requires  any  person who acquires more than 5% of the  Company's
voting  securities  to  report  the  acquisition  to  the  Nevada
Commission and such person may be required to be found  suitable.
Also, any person who becomes a beneficial owner of more than  10%
of  the  voting  securities  of  a  publicly  traded  corporation
registered  under  the Nevada Act must apply  for  a  finding  of
suitability  by the Nevada Commission upon notice to  do  so  and
must  pay  the  costs and fees incurred by the  Nevada  Board  in
connection  with the investigation.  Under certain  circumstances
an  institutional  investor,  as such  term  is  defined  in  the
regulations  of  the  Nevada  Commission  and  the  Nevada  Board
("Nevada Gaming Regulations"), which acquires more than 10%,  but
not more than 15%,  of the Company's voting securities, may apply
to  the  Nevada  Commission  for a  waiver  of  such  finding  of
suitability requirement if such institutional investor holds  the
voting securities for investment purposes only.  An institutional
investor  shall  not  be  deemed to hold  voting  securities  for
investment  purposes unless the voting securities  were  acquired
and   are  held  in  the  ordinary  course  of  business  as   an
institutional  investor  and  not for  the  purpose  of  causing,
directly or indirectly, the election of a majority of the members
of  the  board  of directors of the Company, any  change  in  the
Company's  corporate  charter, bylaws,  management,  policies  or
operations  of  the Company, or any of its gaming affiliates,  or
any  other  action  which  the  Nevada  Commission  finds  to  be
inconsistent  with  holding the Company's voting  securities  for
investment  purposes  only.   Activities  which  are  not  deemed
to  be  inconsistent   with   holding   voting   securities   for
investment   purposes    only   include:   (i)   voting   on  all
matters   voted   on   by   stockholders;  (ii)  making financial

                               11
                                
<PAGE>

and  other inquiries of management of the type normally  made  by
securities analysts for informational purposes and not to cause a
change in its management, policies or operations; and (iii)  such
other  activities as the Nevada Commission may  determine  to  be
consistent  with  such  investment  intent.   If  the  beneficial
stockholder   who  must  be  found  suitable  is  a  corporation,
partnership  or  trust,  it  must submit  detailed  business  and
financial information including a list of beneficial owners.  The
applicant is required to pay all costs of investigation  incurred
by the Nevada Authorities in conducting any such investigation.

     Any  person  who fails or refuses to apply for a finding  of
suitability or a license within 30 days after being ordered to do
so  by  the Nevada Commission or the Chairman of the Nevada Board
may be found unsuitable.  The same restrictions apply to a record
owner  if the record owner, after request, fails to identify  the
beneficial  owner.   Any  stockholder found  unsuitable  and  who
holds,  directly or indirectly, any beneficial ownership  of  the
Common  Stock beyond such period of time as may be prescribed  by
the Nevada Commission may be guilty of a gross misdemeanor.

     The  Company  and Paul-Son Supplies are required  to  submit
detailed   financial  and  operating  reports   to   the   Nevada
Commission.  Substantially all material loans, leases,  sales  of
securities   and  similar  financing  transactions  by   Paul-Son
Supplies  must  be  reported  to or be  approved  by  the  Nevada
Commission.

     If  it  were  determined that gaming laws were  violated  by
Paul-Son Supplies, the gaming licenses it holds could be limited,
conditioned,   suspended  or  revoked.   In  addition,   Paul-Son
Supplies, the Company and the persons involved, could be  subject
to  substantial fines for each separate violation of  the  gaming
laws.   A  supervisor could be appointed by the Nevada Commission
to   oversee   the  Company's  operations  and,   under   certain
circumstances,   earnings  generated  during   the   supervisor's
appointment   could  be  forfeited  to  the  State   of   Nevada.
Limitation, conditioning or suspension of any gaming  license  or
the  appointment  of a supervisor could, and  revocation  of  any
gaming  license  would,  materially  and  adversely  affect   the
Company's operations.

     In  July  1996, the Nevada Board approved a detailed  gaming
compliance plan prepared by the Company (the "Compliance  Plan"),
the  objective of which was to formulate a comprehensive  set  of
internal  review and control  policies and procedures to  monitor
and  strengthen the Company's commitment to compliance  with  all
gaming laws and regulations in all gaming jurisdictions including
Nevada.  Major  provisions  of the Compliance  Plan  include  the
formation  by  the Board of Directors of a Compliance  Committee,
the creation of a position in the Company of  Compliance  Officer
(the  "Compliance Officer"), and the review of sales transactions
by the Compliance Officer.

     The  Company is required to maintain a current stock  ledger
in  Nevada which may be examined by the Nevada Gaming Authorities
at  any time.  If any securities are held in trust by an agent or
by   a  nominee,  the   record   holder   may   be   required  to
disclose   the   identity    of    the   beneficial    owner   to
the    Nevada    Gaming   Authorities.     A  failure   to   make
such  disclosure  may   be   grounds  for   finding   the  record
holder  unsuitable.   The  Company   is   also required to render
maximum  assistance  in   determining   the   identity   of   the
beneficial  owner.   The  Nevada  Commission has the power at any

                               12
                                
<PAGE>

time  to  require  the  Company's stock certificates  to  bear  a
legend  indicating that the securities are subject to the  Nevada
Act  and  the  Nevada Gaming Regulations.  However, to  date  the
Nevada Commission has not imposed such a requirement.

     The Company may not make a public offering of its securities
without the approval of the Nevada Commission.  Such approval, if
given,  does not constitute a recommendation or approval  of  the
investment merits of the securities.

     Changes   in   control  of  the  Company   through   merger,
consolidation,  acquisition of assets, management  or  consulting
agreements or any form of takeover cannot occur without the prior
investigation  of  the Nevada Board and approval  of  the  Nevada
Commission.    The  Nevada  Commission  may  require  controlling
stockholders,  officers, directors and  other  persons  having  a
material relationship or involvement to be licensed.

     The  Nevada  legislature has declared  that  some  corporate
acquisitions  opposed  by  management,  repurchases   of   voting
securities  and  other  corporate  defense  tactics  that  affect
corporate  gaming  licensees in Nevada,  and  corporations  whose
stock   is   publicly-traded  that  are  affiliated  with   those
operations,  may be injurious to stable and productive  corporate
gaming.   The  Nevada  Commission has  established  a  regulatory
scheme  to  ameliorate the potentially adverse effects  of  these
business  practices upon Nevada's gaming industry and to  further
Nevada's  policy  to  (i)  assure  the  financial  stability   of
corporate  gaming operators and their affiliates,  (ii)  preserve
the  beneficial aspects of conducting business in  the  corporate
form,  and (iii) promote a neutral environmental for the  orderly
governance  of  corporate  affairs.  Approvals  are,  in  certain
circumstances,  required from the Nevada  Commission  before  the
Company  can  make  exceptional repurchases of voting  securities
above  the current market price thereof (commonly referred to  as
"greenmail")  and  before  a  corporate  acquisition  opposed  by
management  can  be  consummated.  The Nevada Gaming  Regulations
also  require  prior  approval by the Nevada  Commission  if  the
Company were to adopt a plan of recapitalization proposed by  the
Company's Board of Directors in opposition to a tender offer made
directly to its stockholders for the purpose of acquiring control
of the Company.

     NEW  JERSEY.   The  Company,  its  officers  and  directors,
certain of its employees and stockholders, Paul-Son Supplies, and
Mexicana,  S.A.  de C.V. (99% owned by Paul-Son Supplies  and  1%
owned   by  the  Company)  ("Paul-Son  Mexicana")  are  currently
required  to be licensed under the New Jersey Casino Control  Act
(the "New Jersey Act") as a casino service industry qualified  to
sell  it  products  to  casinos in  New  Jersey.   The  terms  of
agreements  which  the  Company enters into  with  Atlantic  City
casinos  may require the prior approval of the New Jersey  Casino
Control Commission (the "New Jersey Commission").

     The sale of gaming-related devices and systems to casinos in
New  Jersey  is  also  subject to the  New  Jersey  Act  and  the
regulations  promulgated thereunder by the New Jersey Commission.
The  New  Jersey Commission has broad discretion in  promulgating
and   interpreting  regulations  under  the   New   Jersey   Act.
Amendments and supplements to the New Jersey Act, if any, may  be
of  a  material nature, and accordingly may adversely affect  the
ability  of  the Company or its employees to obtain any  required
licenses,  permits and approvals from the New Jersey  Commission,
or any renewals thereof.

                               13
                                
<PAGE>

     The   current  regulations  govern  licensing  requirements,
standards  for  qualification, persons required to be  qualified,
disqualification   criteria,   competition,   investigation    of
supplementary information, duration of licenses, record  keeping,
causes  for  suspension, standards for renewals or revocation  of
licenses,  equal  employment opportunity requirements,  fees  and
exemptions.   In  deciding  to grant a license,  the  New  Jersey
Commission  may  consider,  among  other  things,  the  financial
stability,  integrity, responsibility, good character, reputation
for  honesty, business ability and experience of the Company  and
its  directors,  officers, management and supervisory  personnel,
principal  employees and stockholders as well as the adequacy  of
the financial resources of the Company.

     New  Jersey licenses are granted for a period of one or  two
years,  depending  on  the  length of time  a  company  has  been
licensed,  and  are  renewable.  The New  Jersey  Commission  may
impose  such  conditions upon licensing as it deems  appropriate.
These include the ability of the New Jersey Commission to require
the  Company  to  report the names of all of its stockholders  as
well  as  the  ability to require any stockholders whom  the  New
Jersey  Commission finds not qualified to dispose of  the  stock,
not  receive dividends, not exercise any rights conferred by  the
shares,  nor  receive  any  remuneration  from  the  Company  for
services  rendered or otherwise.  Failure of such stockholder  to
dispose  of such stockholder's stock could result in the loss  of
the  Company's license.  Licenses are also subject to suspension,
revocation  or  refusal  for  sufficient  cause,  including   the
violation of any law.  In addition, licensees are also subject to
monetary  penalties for violations of the New Jersey Act  or  the
regulations of the New Jersey Commission.

     OTHER  JURISDICTIONS.   The Company  currently  operates  at
various  levels  in  Arizona, California, Colorado,  Connecticut,
Florida, Illinois, Indiana, Iowa, Louisiana, Michigan, Minnesota,
Mississippi,   Missouri,   New  York,   Oregon,   South   Dakota,
Washington, Wisconsin, the provinces of Ontario, Quebec,  British
Columbia  and  Saskatchewan, Canada and the  state  of  Victoria,
Australia.    Although   the   regulatory   schemes   in    these
jurisdictions  are not identical, their material  attributes  are
substantially similar, as described below.

     The manufacture, sale and distribution of gaming devices and
the   ownership  and  operation  of  gaming  facilities  in  each
jurisdiction  are  subject to various provincial,  state,  county
and/or  municipal  laws, regulations and  ordinances,  which  are
administered  by the relevant regulatory agency  or  agencies  in
that   jurisdiction  (the  "Gaming  Regulators").   These   laws,
regulations  and ordinances primarily concern the responsibility,
financial   stability   and   character   of   gaming   equipment
manufacturers,  distributors and operators, as  well  as  persons
financially   interested  or  involved  in   gaming   or   liquor
operations.

     In  many jurisdictions, manufacturing or distributing gaming
supplies  may  not  be  conducted  unless  proper  licenses   are
obtained.   An  application for a license may be denied  for  any
cause  which the Gaming Regulators deem reasonable.  In order  to
ensure  the  integrity of manufacturers and suppliers  of  gaming
supplies,  most  jurisdictions  have  the  authority  to  conduct
background  investigations of the Company, its key personnel  and
significant stockholders.  The Gaming Regulators may at any  time
revoke,  suspend, condition, limit or restrict a license for  any
cause  deemed  reasonable by the Gaming  Regulators.   Fines  for
violation of gaming laws or regulations may be levied against the
holder   of  a  license  and  persons   involved.    The  Company
and  its  key  personnel  have  obtained all  licenses  necessary
for   the   conduct   of   the   Company's    business    in  the

                               14
                                
<PAGE>

jurisdictions in which it manufactures and sells its casino table
game  products.  Suspension or revocation of such licenses  could
have a material adverse effect on the Company's operations.

     NATIVE   AMERICAN  GAMING  REGULATION.   Gaming  on   Native
American lands is extensively regulated under federal law, tribal-
state compacts and tribal law.  The Indian Gaming Regulatory  Act
of  1988  ("IGRA") provides the framework for federal  and  state
control  over all gaming on Native American land.  IGRA regulates
the  conduct of gaming on Native American lands and the terms and
conditions  of  contracts with third parties  for  management  of
gaming  operations.  IGRA is administered by the Bureau of Indian
Affairs and the National Indian Gaming Commission ("NIGC").

     IGRA  classifies  games  that may  be  conducted  on  Native
American  lands into three categories.  "Class I Gaming" includes
social  games solely for prizes of minimal value, or  traditional
forms of Native American gaming engaged in by individuals as part
of,  or  in  connection with, tribal ceremonies or  celebrations.
"Class  II Gaming" includes bingo, pulltabs, lotto, punch boards,
tip  jars,  instant bingo, and other games similar to  bingo,  if
those  games are played at the same location as bingo is  played.
"Class III Gaming" includes all other commercial forms of gaming,
such  as  table  games,  slots, video  casino  games,  and  other
commercial gaming (e.g. sports betting and pari-mutuel wagering).

     Class  I  Gaming  on  Native American lands  is  within  the
exclusive jurisdiction of the Native American tribes and  is  not
subject to the provisions of IGRA.

     Class  II  Gaming is permitted on Native American  lands  if
(i)  the  state  in which the Native American lands  are  located
permits  such  gaming for any purpose by any person, organization
or   entity,  (ii)  the  gaming  is  not  otherwise  specifically
prohibited  on  Native American lands by federal law,  (iii)  the
gaming  is  conducted  in accordance with a tribal  ordinance  or
resolution  which has been approved by the NIGC,  (iv)  a  Native
American  tribe  has sole proprietary interest and responsibility
for  the  conduct of gaming, (v) the primary management officials
and  key  employees are tribally licensed, and (vi) miscellaneous
other requirements are met.

     Class  III Gaming is permitted on Native American  lands  if
the  conditions  applicable to Class II Gaming are  met  and,  in
addition,  the gaming is conducted in conformance with the  terms
of  a  written  agreement  between a tribal  government  and  the
government of the state within whose boundaries the tribe's lands
are located (a "tribal-state compact").

     IGRA  requires states to negotiate in good faith with Native
American  tribes  that seek to enter into a tribal-state  compact
for  the conduct of Class III gaming.  Such tribal-state compacts
may  include provisions for the allocation of criminal and  civil
jurisdiction  between  the state and the  Native  American  tribe
necessary  for  the  enforcement of such  laws  and  regulations,
taxation by the Native American tribe of such activity in amounts
comparable  to those amounts assessed by the state for comparable
activities,  remedies for breach, standards for the operation  of
such  activity and maintenance of the gaming facility,  including
licensing,  and any other subjects that are directly  related  to
the  operation  of gaming activities.  The terms of  tribal-state
compacts  vary  from  state  to  state.   Tribal- state  compacts
within  one   state   tend   to   be   substantially  similar  to
each   other.    Tribal-state     compacts      usually   specify
the   types   of   permitted   games,   entitle   the   state  to

                               15
                                
<PAGE>

inspect  casinos, require background investigations and licensing
of  casino employees, and may require the tribe to pay a  portion
of   the   state's  expenses  for  establishing  and  maintaining
regulatory agencies.

     Pursuant to tribal-state compacts, agreements with tribes or
as  otherwise  allowed  by state law, the  Company  is  currently
qualified to distribute its gaming supplies to certain tribes  in
the   states   of   Arizona,   Florida,   Louisiana,   Minnesota,
Mississippi,  New York, North Dakota, Oregon, Iowa,  Connecticut,
Michigan,  South Dakota, Washington, Wisconsin and the  provinces
of Ontario and Saskatchewan, Canada.

     In  1996, the Nevada Gaming Authorities informed the Company
that  it  intended to take the position that any Native  American
tribe  operating Class III gaming within the state of  California
was doing so illegally, causing the Company to cease all sales of
products  to Native American tribes conducting any form of  Class
III gaming in the state of California. A similar situation exists
with  Native American tribes operating in the state of New Mexico
and  the  Company  also  ceased sales of its  products  to  those
tribes.

     UNITED  STATES ? FEDERAL.  The Federal Gambling Devices  Act
of  1962   makes it unlawful for a person to manufacture, deliver
or  receive  gaming  machines, gaming machine  type  devices  and
components thereof across interstate lines unless that person has
first  registered with the Department of Justice  of  the  United
States.

     LICENSING  OF  OFFICERS AND DIRECTORS.  In each jurisdiction
where  the  Company  is  presently  licensed,  the  officers  and
directors  who  are  required to be  licensed  have  either  been
approved  or  licensed or have applications for such licenses  or
approvals  pending.  As regulatory authorities require additional
persons  to be licensed or approved or when the Company seeks  to
enter   into  new  jurisdictions,  the  Company  promptly  causes
necessary applications to be filed.

     APPLICATION OF FUTURE OR ADDITIONAL REGULATORY REQUIREMENTS.
In  the  future,  the  Company  intends  to  seek  the  necessary
licenses, approvals and findings of suitability for the  Company,
its  products and its personnel in other jurisdictions throughout
the  world  where significant sales are anticipated to  be  made.
However,  there can be no assurance that such licenses, approvals
or  findings of suitability will be obtained and if obtained will
not be revoked, suspended or conditioned or that the Company will
be able to obtain the necessary approvals for its future products
as  they  are  developed in a timely manner, or  at  all.   If  a
license,  approval or finding of suitability  is  required  by  a
regulatory  authority and the Company fails to seek or  does  not
receive  the  necessary license of finding  of  suitability,  the
Company may be prohibited from selling it products for use in the
respective  jurisdiction or may be required to sell its  products
through  other  licensed  entities at a  reduced  profit  to  the
Company.

ITEM 2.   PROPERTIES

     The   Company  currently  assembles  and  manufactures   its
products at facilities in Las Vegas, Nevada and San Luis, Mexico.

                               16
                                
<PAGE>

     LAS VEGAS.  In May 1997, the Company relocated its corporate
headquarters to an approximately 62,000 square foot building (the
"New  Las  Vegas Facility"), located approximately one-half  mile
from the Company's approximately 26,000 square foot facility (the
"Old Las Vegas Facility") where its headquarters had been located
since 1966. The New Las Vegas Facility was purchased in September
1995,  and  also  houses the casino sales office,  a  centralized
warehouse of finished goods inventory, the Las Vegas playing card
production line, roulette and Big Six wheel manufacturing and the
table  layout art and chip art departments.  At the New Las Vegas
Facility,  the Company also maintains an inventory of  templates,
graphic  designs, logos, and tools and dies for  each  individual
casino   customer's  gaming  equipment.   Maintaining   such   an
inventory   results  in  time  and  cost  savings   for   product
manufacture  and  delivery. The Company's retail sales  showroom,
plastic  dealing  shoes  manufacturing and  limited  storage  are
located  at  the Old Las Vegas Facility.  In February  1997,  the
Company  sold  one of the buildings (approximately  9,000  square
feet)  which  was  a  component of the Old  Las  Vegas  Facility,
resulting in the reduction in the square footage at the  Old  Las
Vegas  Facility from 35,000 to 26,000, and the repayment  of  the
Company's  debt which was secured by a deed of trust on  the  Old
Las Vegas Facility. The remaining components of the Old Las Vegas
Facility   are   listed  for  sale.  See  "Item  7.  Management's
Discussion  and  Analysis of Financial Condition and  Results  of
Operations-Liquidity and Capital Resources."

     SAN  LUIS.  The Company manufactures casino chips, dice  and
layouts at two adjacent facilities in San Luis, Mexico; a  34,000
square foot facility ("Main Facility") in which the casino  chips
and  dice are manufactured, and a new 45,000 square foot facility
(together  with  the  Main Facility, the "San  Luis  Facilities")
purchased  by the Company in December 1994, in which  the  layout
and  the  machine shop departments are currently located and  the
new  playing card production line is located. The Company  leases
the  Main Facility pursuant to an eight year lease which  expires
in April 2001, with an option to extend the term an additional 12
years.

     In  July 1997, the Company's Board of Directors approved the
purchase of an existing approximately 66,000 square foot facility
(the  "New  San  Luis  Building") in San  Luis,  Mexico,  located
approximately  400 yards from the Main Facility  for  $1,100,000.
The  purchase  of  the New San Luis Building is  expected  to  be
completed  no later than October 31, 1997. The Company  plans  to
use  the  New San Luis Building to augment its playing  card  and
chip  production  capabilities  to  accommodate  the  anticipated
increase in demand for the Company's playing cards.

     FACILITY  CAPACITY.  With the purchase of the New  San  Luis
Building,  management  believes that the Company  has  sufficient
production capacity to meet anticipated future demand for all  of
its products.

ITEM 3.   LEGAL PROCEEDINGS

     The  Company  is not a party to any material  pending  legal
proceeding,  nor,  to the Company's knowledge,  is  any  material
legal proceeding threatened against it.

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

     Not applicable.

                               17
                                
<PAGE>

PART II

ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
          STOCKHOLDER MATTERS

     (a)  Price Range of Common Stock

     The Company's common stock ("Common Stock") is traded on the
Nasdaq  National Market under the symbol "PSON."   The  following
table sets forth the high and low bid prices of the Common Stock,
as  reported  by the Nasdaq National Market, during  the  periods
indicated.

[CAPTION]
<TABLE>

Fiscal
 Year                                                 High       Low
-------                                              -------   -------
 <S>    <C>                                          <C>       <C>
 1996   First Quarter..............................   7 3/4       5
 1996   Second Quarter.............................  10 1/4     5 3/4
 1996   Third Quarter..............................   9 1/2     7 1/2
 1996   Fourth Quarter.............................   9 1/2     7 1/4
 1997   First Quarter..............................   9 1/2       7
 1997   Second Quarter.............................   8 1/4     7 1/4
 1997   Third Quarter..............................  12 1/4     7 3/4
 1997   Fourth Quarter.............................  14 1/2    11 1/2
 1998   First Quarter (through August 22, 1997)....  14 7/8    12 1/8
    
</TABLE>

     The  last  reported  bid price of the Common  Stock  on  the
Nasdaq  National Market on August 22, 1997 was $13 5/8 per share.
There  were approximately 140 holders of record of the  Company's
Common Stock as of August 22, 1997.

     (b)  Dividend Policy

     The  Company  has  never paid cash dividends.   Payments  of
dividends  are  within the discretion of the Company's  Board  of
Directors and depend upon the earnings, capital requirements, and
operating  and  financial condition of the Company,  among  other
factors.  The Company currently expects to retain its earnings to
finance  the growth and development of its business and does  not
expect to pay cash dividends in the foreseeable future.

ITEM 6.   SELECTED CONSOLIDATED FINANCIAL DATA

The   selected  consolidated  financial  data  included  in   the
following tables should be read in conjunction with the Company's
Consolidated   Financial  Statements  and  related   notes,   and
"Management's Discussion and Analysis of Financial Condition  and
Results  of Operations" appearing elsewhere herein.  The selected
consolidated  financial  data  for  the   years   ended   May  31,

                               18

<PAGE>

1997,  1996  and 1995 and as of May 31, 1997 and 1996  have  been
derived from the audited Consolidated Financial Statements of the
Company  included  elsewhere herein.  The  selected  consolidated
financial data as of May 31, 1995, 1994 and 1993 and for the years
ended May 31, 1994  and 1993 have been derived from the Company's
audited  financial statements not included herein.  The  selected
consolidated financial data gives effect to the reorganization of
the   Company  and  certain  affiliated  entities,  but  not  the
acquisition  ("Acquisition")  of  C.J.  Sisk  ("Sisk"),   another
affiliated  entity,  which  occurred  in  connection   with   the
Company's  initial public offering of its common stock  in  March
1994  (the "1994 Offering").  The pro forma data gives effect  to
the Acquisition as if it had occurred on June 1, 1993.

                               19

<PAGE>

<TABLE>                                                                                                         
<CAPTION>                                                  YEARS ENDED MAY 31,                                   PRO FORMA
                                       -----------------------------------------------------------------------    MAY 31,
                                          1997          1996            1995           1994           1993         1994      
                                       -----------   -----------     -----------    -----------   -----------   -----------
<S>                                    <C>           <C>             <C>            <C>           <C>           <C>
Revenues                               $   24,914    $   23,379      $   24,595     $   21,088    $   13,492    $   22,839    
Cost of revenues                           17,224        16,323          17,137         14,601         9,281        15,698    
                                       -----------   -----------     -----------    -----------   -----------   -----------
Gross profit                                7,690         7,056           7,458          6,487         4,211         7,141
Selling general and                                                                                                
     administrative expenses                5,968         6,577           7,739          4,771         3,232         4,993
                                       -----------   -----------     -----------    -----------   -----------   -----------
Operating income (loss)                     1,722           479            (281)         1,716           979         2,148
Other income (expense)                        412            52             140            (46)          (78)          (42)
                                       -----------   -----------     -----------    -----------   -----------   -----------
Income (loss) before income
  taxes and minority interests                                                                               
  in net income of consolidated 
  companies                                 2,134           531            (141)         1,670           901         2,106
Income tax (expense) benefit                 (762)         (194)              -           (523)         (297)         (682)    
Minority interest in net                                                                                             
  income of consolidated 
  companies                                     -             -               -            (90)          (96)            -
                                       -----------   -----------     -----------    -----------   ------------  -----------
Net income (loss)<F1>                  $    1,372    $      337      $     (141)    $    1,057    $      508    $    1,424
                                       ===========   ===========     ===========    ===========   ============  ===========
Earnings per share:
    Primary                                $ 0.41        $ 0.10          $(0.04)                                    $ 0.61
    Shares used in calculation          3,330,764     3,324,000       3,324,000                                  2,332,657    
    Fully diluted                          $ 0.38        $ 0.10               -                                     $ 0.59    
    Shares used in calculation          3,647,810     3,326,647       3,324,000                                  2,397,183    

<FN>
<F1>Sisk  was  a  sole proprietorship and, accordingly,  was  not
    subject   to   corporate  income  taxes.    The   pro   forma
    information  has  been computed as if the  Company,  adjusted
    for  the  acquisition of Sisk, had been subject to  corporate
    income  taxes at the applicable federal and state  rates  for
    the year ended May 31, 1994.
</FN>
</TABLE>

<TABLE>
<CAPTION>
                                                           MAY 31,
                               -------------------------------------------------------------
                                  1997        1996          1995        1994         1993
                               ---------   ----------   -----------  ----------   ----------
BALANCE SHEET DATA:                         (in thousands, except per share data)

<S>                            <C>         <C>          <C>          <C>          <C>
                                                                                          
Cash and cash equivalents      $  2,753    $     998    $    1,254   $   3,296    $     826
                                                                                          
Working capital                   9,308        7,601         9,832      12,288        1,181
                                                                                          
Property and equipment, net       7,250        7,259         4,990       2,705        1,301
                                                                                          
Total assets                     20,397       17,401        19,040      20,244        5,635
                                                                                          
Current liabilities               3,234        2,071         3,729       4,512        2,991
                                                                                          
Long-term debt, less current                                                              
 maturities                          67          471           788        1,069          725
                                                                                          
Stockholders' equity             17,085       14,859        14,522       14,663        1,766

</TABLE>

                               20
<PAGE>

ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS
       
     Paul-Son  provides  gaming equipment  and  supplies  to  new
casinos  and  consumable products to its existing customer  base.
The  principal  consumable products have  limited  useful  lives,
ranging from several hours in the case of playing cards and  dice
to  several months in the case of table game layouts and  several
years  in  the case of casino chips and gaming furniture.  "Core"
business revenues are generated by sales of these products to the
over  75%  of  the casinos in the United States  with  which  the
Company has an established relationship and comprise the majority
of   the  Company's  total  revenues.   Complementing  this  core
business  is  the  significant  additional  revenue  the  Company
realizes  when providing a full range of products to new casinos.
The  Company strives to become a casino's sole supplier of  table
game equipment and supplies.

     During  the past decade, casino entities have expanded  from
land-based  resort  properties to riverboats, both  cruising  and
dockside,  and to Native American lands.  As a licensed supplier,
the Company has vigorously pursued table gaming opportunities  in
emerging   gaming  jurisdictions.   Because  of   the   Company's
production  capacity  and its experience  in  the  gaming  supply
industry,  management believes the Company is well positioned  to
capitalize  on  the combined growth of the gaming  industry  both
domestically and internationally.

     While  the  gaming industry has grown in recent  years,  the
growth  rate  of table games has not matched that of  the  gaming
industry  as a whole.  This trend is attributed to an  increasing
allocation  of total casino gaming space to slot machines  which,
in  certain  cases,  may reduce the allocation  of  total  casino
gaming  space to table games.  The number of new table  games  in
new  jurisdictions typically follow this trend after a period  of
operation.  However, new table games continue to be introduced in
an   effort  to  offset  this  trend  and  create  exciting   and
progressive games in the table game segment.

RESULTS OF OPERATIONS

     The  following  table  summarizes selected  items  from  the
Company's  Consolidated Statements of Operations as a  percentage
of revenues for the periods indicated:

<TABLE>
<CAPTION>
                                                      YEARS ENDED MAY 31,
                                                ------------------------------
                                                 1997        1996        1995
                                                -------     -------    -------
<S>                                             <C>         <C>        <C>
Revenues                                        100.0%      100.0%     100.0%
Cost of revenues                                 69.1%       69.8%      69.7%
Gross profit                                     30.9%       30.2%      30.3%
Selling, general and administrative              24.0%       28.1%      31.5%
expenses(1)
Operating income (loss)                           6.9%        2.1%      (1.2%)
Interest expense                                  0.2%        0.3%       0.4%
Net income (loss)                                 5.5%        1.4%      (0.6%)

<FN>
<F1>  Bad  debt  expense accounted for 0.2%, 1.5%  and  11.8%  of
selling, general and administrative expenses for the years  ended
May 31, 1997, 1996 and 1995, respectively.
</FN>
</TABLE>

                               21
<PAGE>

     The   following  table  details  the  Company's   historical
revenues by product line:

<TABLE>
<CAPTION>
                                                 YEARS ENDED MAY 31,
                                        ----------------------------------
                                          1997         1996         1995
                                        --------     --------     --------
REVENUES:                                          (IN THOUSANDS)
<S>                                     <C>          <C>          <C>
Casino chips                            $ 9,516      $ 7,362      $ 7,347
Table layouts                             3,205        2,678        3,184
Playing cards                             3,265        4,198        3,752
Gaming furniture                          4,970        5,249        5,674
Dice                                      1,576        1,257        1,221
Table accessories and other products      2,382        2,635        3,417
                                        --------     --------     --------
     Total                              $24,914      $23,379      $24,595
                                        ========     ========     ========
</TABLE>

COMPARISON OF OPERATIONS FOR THE YEARS ENDED MAY 31, 1997 AND
MAY 31, 1996

     REVENUES.    For  the  fiscal  year  ended  May  31,   1997,
Paul-Son's  revenues  reached a record total  of  $24.9  million.
This revenue figure represented a $1.5 million, or 6.6%, increase
from  the  $23.4 million in revenues which the Company  generated
the previous year.  The increase in revenues resulted principally
from  an  increase in new casino openings during  the  year.   In
fiscal year 1997, the Company sold products totaling $9.4 million
to  36  new  casinos (including riverboats, land based properties
and  Native  American casinos) versus $4.7  million  to   25  new
casinos  in the previous fiscal year. The increase in new  casino
revenues  was offset by a decrease in core sales.  Core sales  in
fiscal  1997 were $15.5 million, a decrease  of $3.1  million  or
16.6%  from  core  sales of $18.7 million in fiscal  1996.   Core
sales,  which  are  sales  of  consumable  gaming  supplies   and
equipment  to  the  Company's existing customer  base,  decreased
during  the  year  primarily due to a decrease  in  playing  card
sales,  both paper and plastic. Playing card sales were down  due
to  a  number  of  factors including a change  in  the  Company's
supplier  of plastic playing cards during the second  quarter  of
the  fiscal  year and the slowdown in shipments to  many  of  the
Company's  contract playing card customers who  had  a  temporary
over supply of playing cards during the first quarter of the 1997
fiscal  year.  In  addition,  during  fiscal  1997,  the  Company
restructured its playing card sales force, developed an  improved
playing card product and relocated a portion of its playing  card
production to San Luis, Mexico, resulting in a temporary slowdown
in  playing card sales efforts.  Management believes the  changes
implemented  will  result  in  greater  sales  coverage  in   all
geographic  areas,  an  improved  product  and  more  competitive
pricing.   As  a result of these changes, the Company experienced
an  increase of 37.7% in paper playing card sales in  the  fourth
quarter of fiscal 1997 over the average of the sales generated in
each of the first three quarters of the 1997 fiscal year.

     To  a  lesser extent, the Company's core sales were affected
by  a  decline  in  the  sales of table  accessories,  which  are
generally acquired from third party manufacturers, who have  been
selling  directly  to  casino customers in competition  with  the
Company. As a result the Company began manufacturing its own line
of plastic dealing shoes in May 1997.

                               22
<PAGE>

     In  connection  with  the increase in new  casino  openings,
sales  of casino chips, table layouts, and dice increased  29.3%,
19.6%,   and  25.3%,  respectively, while, as  a  result  of  the
decrease  in  core  sales, playing cards, gaming  furniture,  and
table  accessories and other products decreased 22.2%,  5.3%  and
9.6%, respectively, as compared to the prior fiscal year.

     COST  OF  REVENUES.  Cost of revenues, as  a  percentage  of
sales, decreased to 69.1% for the fiscal year ended May, 31 1997,
as  compared  to 69.8% in the prior fiscal year. This  percentage
decrease  was  due to a number of factors including higher  sales
volume  and  corresponding  higher operating  efficiencies  (i.e.
increased  sales resulting in a higher number of  units  produced
over the same fixed production costs), although the corresponding
higher efficiencies achieved were partially offset by a temporary
increase  in fixed production costs resulting from the relocation
of  a  portion  of the Company's playing card production  to  San
Luis, Mexico.  Also contributing to the decrease in the Company's
cost  of  revenues  percentage was a change in product  mix  sold
during the year. Chip sales, for which the Company generates  the
highest  gross margin, were $9.5 million, versus $7.4 million  in
the prior fiscal year.

     During  several  of its most recent reporting  periods,  the
Company has generally had a positive impact from the decrease  in
the  value of the Mexican peso. During the fiscal year ended  May
31,  1997   the  value  of the Mexican peso  remained  relatively
stable. The Company cannot predict what impact fluctuations  will
have  on  future costs of the Company's products manufactured  in
Mexico.

     GROSS PROFIT.  Gross profit increased in absolute dollars by
$634,000 to $7.7 million as compared to $7.1 million in the prior
fiscal year as a result of the higher revenues and a decrease  in
cost of revenue as a percentage of sales from 69.8% to 69.1%  due
to the factors discussed above.

     SELLING,  GENERAL  AND  ADMINISTRATIVE  EXPENSES.   Selling,
general and administrative ("SG&A") expenses for the fiscal  year
ended May 31, 1997 decreased $610,000 or 9.3%, to $6.0 million or
24.0%  of  revenues compared to $6.6 million or 28.1% of revenues
in  the  previous fiscal year.  SG&A reductions were achieved  in
almost all categories across the board with few exceptions. Major
reductions  in SG&A expenses included reductions in salaries  and
wages ($50,000), outside commissions ($126,000), advertising  and
promotion  costs ($98,000),  legal and accounting ($66,000),  and
travel  and entertainment  costs ($63,000). Most reductions  were
due  to  the cost cutting and restructuring program initiated  by
the  Company during the second quarter of fiscal 1995.  The  most
significant  increase in SG&A expenses was  in  depreciation  and
amortization  ($43,000)  due  to the  addition  of  property  and
equipment purchased during the previous three fiscal years.

     INTEREST EXPENSE.  For the year ended May 31, 1997, interest
expense  decreased approximately 33% to $43,000  as  compared  to
$64,000  in  the prior fiscal year, as a result of the  Company's
efforts  to  pay  down  long-term debt and  fund  operations  and
capital expenditures out of cash generated from operations.

     OTHER  INCOME.   In  fiscal  1997,  other  income  increased
$397,000  or  687%  over the previous fiscal year.   In  February
1997, the Company sold an approximately 9,000 square foot

                               23
<PAGE>

building  which  was  part  of the Old  Las  Vegas  Facility  for
$450,000.  The Company's depreciated cost basis of  the  building
was  $129,000,  resulting in a capital gain  of  $326,000  before
income taxes ($205,000 net of income taxes).

     NET  INCOME.   For the year ended May 31, 1997, the  Company
had  record  net  income of $1.4 million,  an  increase  of  $1.1
million over the net income of $300,000 in the prior fiscal year.
This  increase  in net income was primarily due to  increases  in
revenues,  gross  profit and other income and decreases  in  SG&A
expenses  over the prior fiscal.  Net income per share  was  $.41
for the year ended May 31, 1997, as compared to $.10 for the year
ended May 31, 1996.

COMPARISON OF OPERATIONS FOR THE YEARS ENDED MAY 31, 1996 AND
MAY 31, 1995

     REVENUES.    For  the  fiscal  year  ended  May  31,   1996,
Paul-Son's  revenues totaled $23.4 million.  This revenue  figure
represented  a  $1.2 million, or 4.9%, decrease  from  the  $24.6
million  in  revenues  which the Company generated  the  previous
year.   The  decrease  in revenues resulted  principally  from  a
decrease in new casino openings during the year.  In fiscal  year
1996,  the Company sold products totaling $4.7 million to 25  new
casinos  (including riverboats, land based properties and  Native
American casinos), versus $6.0 million to 40 new casinos  in  the
previous   fiscal  year.  However,  while  new  casino   revenues
decreased  in fiscal 1996, core sales increased.  Core  sales  in
fiscal  1996  were a record $18.7 million, a slight  increase  of
$0.1  million or 0.5% over core sales of $18.6 million in  fiscal
1995.   In  connection with the decrease in new casino  openings,
sales  of  table layouts, gaming furniture, and table accessories
and   other   products  decreased  15.9%,   7.5%,    and   22.9%,
respectively, while, as a result of the increase in  core  sales,
casino  chips, playing cards and dice increased 0.2%,  11.9%  and
2.9%, respectively, as compared to the prior fiscal year.

     COST OF REVENUES.  In relationship to the lower sales volume
generated  during  the fiscal year ended May 31,  1996,  cost  of
revenues  decreased by $0.8 million from $17.1 million  to  $16.3
million when compared to the prior fiscal year.  Cost of revenues
as  a  percentage of sales remained almost constant at  69.8%  as
compared  to 69.7% in fiscal 1995. Although the cost of  revenues
percentage  remained almost constant in fiscal 1996,  there  were
several  factors which impacted cost of revenues both  positively
and  negatively during the year. Negative factors included  lower
sales   volume  and  the  corresponding  lower  number  of  units
produced,  resulting in lower operating efficiencies  and  higher
per  unit  fixed production costs, and increases in raw  material
costs   and purchase prices paid for distributed items.  Positive
factors   included  a   devaluation  of   the  Mexican  peso   by
approximately  20% during the year and a decrease  in  Las  Vegas
production  support  staff  following  the  relocation   of   the
remainder  of  the layout production operations to Mexico  during
the year.

     GROSS  PROFIT.  As a result of the lower revenue, Paul-Son's
gross  profit  decreased by $400,000, from $7.5 million  to  $7.1
million.   As  discussed above, gross profit as a  percentage  of
sales  remained relatively constant at 30.2% versus 30.3% in  the
prior fiscal year.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.  SG&A expenses
for the fiscal year ended May 31, 1996 decreased $1.1 million  to
$6.6  million  or 28.1% of revenues compared to $7.7  million  or
31.5%  of  revenues  in the previous fiscal year.  Following  the
higher than anticipated bad

                               24
<PAGE>

debt losses of almost $913,000, due to certain casino closures in
the  fiscal year ended May 31, 1995, management adopted much more
stringent  credit and collection policies for all  casino  sales,
which  resulted  in  a reduction of bad debt  losses   by  almost
$813,000  to $96,000 in fiscal 1996. Other principal  changes  in
SG&A  expenses  included  increases of $315,000  in  salaries  to
corporate  officers,  sales  and  administrative  personnel   and
increased  depreciation of $147,000 due  to  the  acquisition  of
additional production facilities and equipment in fiscal 1995 and
1996.  Decreases  in SG&A expenses resulting from  the  Company's
cost  cutting  and  restructuring program  initiated  during  the
second  quarter of fiscal 1996 included reductions in advertising
and promotion costs ($176,000),  fees paid to outside consultants
($204,000), freight and postage costs ($164,000) and  travel  and
entertainment costs ($109,000).

     INTEREST EXPENSE.  For the year ended May 31, 1996, interest
expense  decreased approximately 42% to $63,906  as  compared  to
$109,593  in the prior year as a result of the Company's  efforts
to  pay  down  long-term  debt and fund  operations  and  capital
expenditures  out  of  cash generated  from  operations  and  the
remaining undisbursed proceeds from the 1994 Offering.

     NET  INCOME (LOSS).  Net income improved from a net loss  of
$140,000  ($(.04)  per share) in 1995 to net income  of  $337,000
($.10  per  share) in fiscal 1996 primarily as a  result  of  the
lower SG&A expenses discussed above.

LIQUIDITY AND CAPITAL RESOURCES

     OVERVIEW.  Management believes that the combination of  cash
on  hand,  cash flows from operations and the Company's  existing
line of credit will provide sufficient liquidity, both on a short-
term and long-term basis.

     WORKING  CAPITAL.  Working capital totaled $9.2  million  at
May  31,  1997,  versus $7.6 million at May  31,  1996.   Working
capital  increased during the year primarily due to the Company's
net  income  before  depreciation  of  $2.2  million,  which  was
partially  offset  by  the Company's investment  of  $900,000  in
property, plant and equipment during the year.

     CASH  FLOW.   Operating activities provided $2.1 million  in
cash  during the fiscal year ended May 31, 1997 compared to  cash
provided of $1.6 million during the prior year. Net income before
depreciation  and  income taxes of $2.6  million  was  the  major
factor  contributing  to the cash provided by  operations.  Other
significant sources of cash during the year included the proceeds
generated  from the sale of a building ($450,000),  and  proceeds
from the issuance of common stock ($772,000) attributable to  the
exercise  of  93,000  stock  options  during  the  fiscal   year.
Significant uses of cash included the purchase of property, plant
and   equipment  ($920,000)  and  reduction  in  long-term   debt
($451,000).  Total  cash and cash equivalents increased  by  $1.8
million during the year as compared to a total reduction in  cash
of $260,000 in the prior fiscal year.

     LINE  OF CREDIT. The Company maintains a line of credit (the
"Line  of  Credit"),  with Wells Fargo  Bank  of  Nevada  ("Wells
Fargo")  which  presently  allows the Company  to  borrow  up  to
$750,000.  The Line of Credit matures on January 2, 1998.  As  of
May  31, 1997, no advances were outstanding and the total  amount
of the Line of Credit was available.  The Line of Credit is

                               25
<PAGE>

collateralized   by  a  first  priority  security   interest   in
substantially all of the Company's depository accounts  at  Wells
Fargo,  accounts receivable, inventory, furniture,  fixtures  and
equipment,  and bears interest at a variable rate  of  2.0%  over
Wells Fargo's prime lending rate.

     Under  the Line of Credit, the Company has agreed to  comply
with  certain financial covenants and ratios.  Specifically,  the
Company has agreed to maintain a current ratio (current assets to
current  liabilities) of not less than 1.5 to 1, a debt to  worth
ratio (total liabilities divided by stockholders' equity) of less
than  1  to 1 and a fixed charge coverage ratio ((earnings before
interest, taxes, depreciation and amortization) divided by (prior
period  current maturities of long term debt plus  interest  plus
rent)) of at least 2.0 to 1.

     PAY  OFF  OF  SECURED DEBT.  In December 1993,  the  Company
obtained  a  $500,000 loan for capital expenditures  and  working
capital purposes (the "Note") from a financial institution.   The
Note  which bore interest at 8% per annum, with monthly  payments
of  principal  and  interest totaling $6,067,  was  paid  off  in
February 1997. The Note was secured by a deed of trust on the Old
Las Vegas Facility.

     SEASONALITY.  The Company has traditionally experienced some
seasonality, as new casino openings, particularly in  Las  Vegas,
have  tended to occur near the end of a calendar year  (typically
during  the  Company's second fiscal quarter).   There  does  not
appear to be any seasonality associated with the Company's  "core
sales" to existing customers.

     BACKLOG.   Open  orders  as of May  31,  1997  totaled  $2.5
million, compared to $3.6 million as of May 31, 1996.  Management
believes  that substantially all of these orders will  be  filled
within  the next six months, with the majority filled within  the
first fiscal quarter.

     LAS  VEGAS FACILITIES. In May of 1997, the Company relocated
its  corporate headquarters to the "New Las Vegas Facility."  The
New  Las  Vegas  Facility was purchased  in  September  1995  for
$2,000,000,  and  since  September 1995,  the  Company  has  made
improvements totaling approximately $352,000.  In February  1997,
the Company sold one of the buildings (approximately 9,000 square
feet)  which  was a component of the Old Las Vegas  Facility  for
$450,000, resulting in the reduction in the square footage at the
Old  Las  Vegas Facility from 35,000 to 26,000, and repayment  of
the  Company's debt in the original principal amount of  $500,000
which  was  secured  by  a deed of trust on  the  Old  Las  Vegas
Facility. The remaining components of the Old Las Vegas  Facility
are listed for sale.

     SAN LUIS FACILITIES.  In January 1997, the Company installed
a second playing card production line in the San Luis Facilities.
The  use  of  existing space at the San Luis Facilities  provides
additional  playing card production capacity  while  the  Company
evaluates production costs and efficiencies  achieved in the  San
Luis  Facilities.   The  additional  production  line  will  also
augment  the Company's ability to solicit orders from larger  and
multi-site  casinos  both  in  the United  States  and  from  the
international  market.   The Company's  ability  to  compete  for
additional market share in playing card sales should be  enhanced
by  the  Company's  anticipated decrease in per  unit  production
costs.  Management  is  analyzing whether the  anticipated  lower
playing  card  production costs will justify  the  relocation  of
other portions of its manufacturing operations to Mexico.

                               26
<PAGE>

     NEW SAN LUIS BUILDING. In July 1997, the Company's Board  of
Directors  approved  the  purchase of an  existing  approximately
66,000  square  foot New San Luis Building located  approximately
400 yards from the Main Facility for $1,100,000.  The purchase of
the  New  San Luis Building is expected to be completed no  later
than October 31, 1997.  The funds for the purchase of the New San
Luis  Building  will come from cash on hand or a  combination  of
cash on hand and new financing.  The Company plans to use the New
San Luis Building to augment its playing card and chip production
capabilities  to accommodate the anticipated increase  in  demand
for the Company's playing cards.

STATEMENT ON FORWARD-LOOKING INFORMATION

     Certain information included herein contains statements that
may be considered forward-looking, such as statements relating to
anticipated performance, financing sources and the relocation  of
certain  operations.  Any forward-looking statement made  by  the
Company  necessarily  is  based upon a number  of  estimates  and
assumptions that, while considered reasonable by the Company,  is
inherently   subject  to  significant  business,   economic   and
competitive  uncertainties and contingencies, many of  which  are
beyond  the  control of the Company, and are subject  to  change.
Actual  results  of the Company's operations may vary  materially
from  any forward-looking statement made by or on behalf  of  the
Company.  Forward-looking statements should not be regarded as  a
representation  by  the  Company or any  other  person  that  the
forward-looking  statements  will be  achieved.   Undue  reliance
should not be placed on any forward-looking statements.  Some  of
the  contingencies and uncertainties to which any forward-looking
statement  contained  herein  is subject  include,  but  are  not
limited to, the following:

     RELIANCE  ON  EXPANSION OF CASINO INDUSTRY.   A  significant
percentage  of  the  Company's  revenue  is  generated  by  sales
relating  to  casino  openings  and  expansions.   As  such,  the
Company's future growth will be dependent to a material degree on
the  continued  emergence  and growth  of  new  markets  for  the
Company's  products, including new casino openings or  expansions
throughout  the United States and other areas of  the  world.   A
reduction  in  the  pace  of  new  casino  openings  and   casino
expansions   in   existing   and   emerging   legalized    gaming
jurisdictions  would  have a negative  effect  on  the  Company's
business.  Similarly, the restriction or abolishment of legalized
casino  gaming  in  jurisdictions in which the Company  currently
does business would have a negative impact on the Company.

     GAMING  REGULATIONS.   The manufacture and  distribution  of
gaming  equipment and supplies are subject to extensive  federal,
state  and  local  regulation.  Although these  regulations  vary
among   jurisdictions,   virtually  all   jurisdictions   require
licenses, permits and approvals to be held by the Company and its
key personnel in connection with the manufacture and distribution
of  some  or all of the Company's products.  The failure  of  the
Company  or  its  key  personnel to  obtain  or  retain  required
licenses, permits or approvals in one or more jurisdictions could
have  an adverse effect on the Company and could adversely affect
the  ability  of the Company and its key personnel to  obtain  or
retain  licenses  in other jurisdictions.  No  assurance  can  be
given  that such licenses, permits or approvals will be obtained,
retained  or  renewed  in  the future  in  existing  or  emerging
jurisdictions.

                               27
<PAGE>

     Any  beneficial holder of the Company's common stock may  be
subject to investigation by the gaming authorities in any or  all
of  the  jurisdictions  in  which the Company  operates  if  such
authorities  have  reason to believe that such ownership  may  be
inconsistent  with  such state's gaming  policies.   Persons  who
acquire  beneficial  ownership of more  than  certain  designated
percentages  of  the Company's common stock will  be  subject  to
certain reporting and qualification procedures established by the
Nevada  and  other gaming authorities, as well as  certain  local
licensing authorities.

     NEED  FOR  TRIBAL-STATE COMPACTS.  The Company's ability  to
generate  greater revenues and earnings is dependent in  part  on
the  growth of Native American tribal casinos.  Under  IGRA,  the
operation  of  a  casino on Native American tribal  land  is  not
permitted until the Native American tribe and the state in  which
it   is   located  have  entered  into  a  tribal-state   compact
authorizing  gaming  on  the tribe's land and  such  tribal-state
compact  is  approved  by  the Secretary  of  the  Department  of
Interior.   Many states have resisted entering into  tribal-state
compacts,  which  has  resulted  in  litigation  challenging  the
constitutionality   of  IGRA.   If  IGRA   were   found   to   be
unconstitutional,  the  procedures  that  would  apply   to   the
initiation and operation of Native American tribal casinos  would
be  uncertain.  Such a finding could severely limit or delay  the
expansion of gaming in additional jurisdictions.  In addition,  a
recent  court ruling has placed limits on the ability  of  Native
American  tribes  to  force  states to  enter  into  tribal-state
compacts    and   several   states,   through   legislation    or
constitutional  amendment, have sought  to  limit  the  scope  of
Native American gaming under IGRA.

     VARIABILITY  OF QUARTERLY OPERATING RESULTS.  The  Company's
financial  results are dependent in part upon  sales  to  new  or
expanding  casinos,  which may, in turn, be  dependent  upon  the
authorization of gaming in additional jurisdictions.  The  timing
of  these  events does not follow consistent patterns  throughout
any given year.  Given this uncertain timing and the large dollar
value  of  sales  to new casinos, the Company's future  operating
results may be subject to significant quarterly fluctuations.

     TABLE GAMES GROWTH RATE.  The Company's primary products are
sold  to  casinos with table games.  In recent years,  there  has
been  an  increasing allocation of total casino gaming  space  to
slot machines, and in certain cases, a resulting reduction in the
allocation  of total casino gaming space to table  games.   As  a
result,  the growth rate of table games has not matched  that  of
the casino industry as a whole.  Although the Company's sales and
income have continued to increase due to the growth and expansion
of the gaming industry, particularly in the newly emerging gaming
jurisdictions,  the Company believes that the Company's  rate  of
growth  would  have  been  greater if not  for  this  trend.   An
acceleration  of this trend would have a further negative  impact
on the Company's rate of growth.

     DEPENDENCE ON KEY PERSONNEL.  The Company's success  depends
to  a significant degree on the performance of Paul S. Endy, Jr.,
Chairman of the Board and Chief Executive Officer, Eric P.  Endy,
President  and  Director,  and Louis W. DeGregorio,  Senior  Vice
President  of  Sales.  The Company does not carry  key  man  life
insurance  for any of these executive officers, and the  loss  of
the services of one or more of them could have a material adverse
effect on the Company.

                               28
<PAGE>

     Management  anticipates  that as the  Company  continues  to
expand into new gaming jurisdictions throughout the United States
and  internationally, its future success will depend in part upon
its ability to attract and retain qualified personnel to fill key
sales, administrative and management positions.  There can be  no
assurance that the Company will be able to locate and retain such
individuals.

     EXPANSION OF INTERNATIONAL SALES.  Although currently only a
small percentage of the Company's sales are to casinos located in
foreign countries, a component of the Company's business strategy
is  the expansion of its international sales.  To the extent  the
Company  is  successful in this endeavor, it will be increasingly
subject  to  the  customary risks of doing  business  in  foreign
countries.  These risks include fluctuations in foreign  currency
exchange  rates and controls, nationalization and other economic,
tax   and  regulatory  policies  of  local  governments  and  the
possibility of trade embargoes, political instability or  war  or
other  hostility, as well as the laws and policies of the  United
States affecting foreign trade and investment.

     COMPETITION.  There are significant competitors in  each  of
the Company's major product lines.  With the continuing expansion
of  gaming, it is possible that new competitors may be  attracted
to  the  table game supply business, some of which may be in  the
business of selling gaming products, have licenses to sell gaming
supplies  and have greater financial resources than the  Company.
The  entry  by  such companies into the Company's  markets  could
adversely impact the Company's business.

     CONTROL   BY  EXISTING  STOCKHOLDER;  ANTITAKEOVER  EFFECTS.
Paul S. Endy is the beneficial owner of approximately 50% of  the
outstanding Common Stock of the Company.  As a result,  Mr.  Endy
effectively  controls the election of all of the members  of  the
Board  of  Directors  of  the Company  and  effectively  controls
virtually  all matters requiring approval by the stockholders  of
the  Company.  Such ownership may discourage acquisition of large
blocks  of  the  Company's securities and  could  have  an  anti-
takeover  effect,  possibly depressing the price  of  the  Common
Stock.   In  addition, Nevada corporation law and  the  Company's
Articles of Incorporation and Bylaws contain provisions that  may
have the effect of delaying, deferring or preventing a change  in
control of the Company.

     RELIANCE  ON  SUPPLIERS.  For certain of its  products,  the
Company  is  dependent  upon a limited  number  of  suppliers  to
provide  the  Company  with raw materials for  manufacturing  and
finished goods for distribution.  The failure of one or  more  of
these suppliers to meet the Company's performance specifications,
quality  standards or delivery schedules could  have  a  material
adverse effect on the Company.

                               29
<PAGE>


ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     Independent Auditors' Report (Deloitte & Touche LLP)

     Independent Auditors' Report (McGladrey & Pullen, LLP)

     Consolidated Balance Sheets at May 31, 1997 and May 31, 1996

     Consolidated  Statements of Operations for the  Years  Ended
     May 31, 1997, 1996 and 1995
     
     Consolidated  Statements  of Stockholders'  Equity  for  the
     Years Ended May 31, 1997, 1996 and 1995
     
     Consolidated  Statements of Cash Flows for the  Years  Ended
     May 31, 1997, 1996 and 1995
     
     Notes to Consolidated Financial Statements

     Financial  Statement Schedule included in Part  IV  of  this
     report
     
                               30
<PAGE>
                                
                                
                   PAUL-SON GAMING CORPORATION
                                
                        AND SUBSIDIARIES
                                
                  CONSOLIDATED FINANCIAL REPORT
                                
                          MAY 31, 1997
                                
                                
                                
                               31
<PAGE>

                                
                                
INDEPENDENT AUDITORS' REPORT

Board of Directors
PAUL-SON GAMING CORPORATION:

We  have audited the accompanying consolidated balance sheets  of
Paul-Son Gaming Corporation and subsidiaries as of May 31,  1997,
and  1996  and  the  related consolidated statements  of  income,
stockholders' equity, and cash flows for each of the two years in
the  period  ended  May 31, 1997.  Our audits also  included  the
financial statement schedule for the years ended May 31, 1997 and
1996  listed  in  the  Index  at Item  14(a)2.   These  financial
statements   and   financial   statement   schedule    are    the
responsibility  of the Company's management.  Our  responsibility
is  to  express  an  opinion  on  the  financial  statements  and
financial  statement schedule based on our audits.  The financial
statements  and financial statement schedule of the  Company  for
the  period  ended  May 31, 1995 were audited by  other  auditors
whose  report,  dated August 25, 1995, expressed  an  unqualified
opinion on those statements.

We  conducted  our  audits in accordance with generally  accepted
auditing  standards.  Those standards require that  we  plan  and
perform  the  audit to obtain reasonable assurance about  whether
the  financial statements are free of material misstatement.   An
audit  includes  examining, on a test basis, evidence  supporting
the  amounts  and  disclosures in the financial  statements.   An
audit also includes assessing the accounting principles used  and
significant  estimates made by management, as well as  evaluating
the  overall  financial statement presentation.  We believe  that
our audits provide a reasonable basis for our opinion.

In  our  opinion, such consolidated financial statements  present
fairly, in all material respects, the financial position of Paul-
Son  Gaming Corporation and subsidiaries as of May 31,  1997  and
1996,  and  the results of their operations and their cash  flows
for  each  of the two years in the period ended May 31,  1997  in
conformity with generally accepted accounting principles.   Also,
in   our   opinion,  such  financial  statement  schedule,   when
considered  in  relation  to  the  basic  consolidated  financial
statements  taken  as a whole, presents fairly  in  all  material
respects the information set forth therein.



/s/ Deloitte & Touche LLP

DELOITTE & TOUCHE LLP
Las Vegas, Nevada

August 8, 1997

                               32
<PAGE>
                                
                                
                  INDEPENDENT AUDITOR'S REPORT
                                
                                
To the Board of Directors
PAUL-SON GAMING CORPORATION
Las Vegas, Nevada


We  have  audited  the  accompanying consolidated  statements  of
operations,  stockholders' equity, and  cash  flows  of  Paul-Son
Gaming  Corporation and subsidiaries for the year ended  May  31,
1995.   These financial statements are the responsibility of  the
Company's  management.   Our  responsibility  is  to  express  an
opinion on these financial statements based on our audit.

We  conducted  our  audit in accordance with  generally  accepted
auditing  standards.  Those standards require that  we  plan  and
perform  the  audit to obtain reasonable assurance about  whether
the  financial statements are free of material misstatement.   An
audit  includes  examining, on a test basis, evidence  supporting
the  amounts  and  disclosures in the financial  statements.   An
audit also includes assessing the accounting principles used  and
significant  estimates made by management, as well as  evaluating
the  overall  financial statement presentation.  We believe  that
our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to
above  present fairly, in all material respects, the  results  of
operations and cash flows of Paul-Son Gaming Corporation for  the
year  ended  May 31, 1995, in conformity with generally  accepted
accounting principles.


                         /s/ McGladrey & Pullen, LLP

                         McGLADREY & PULLEN, LLP

Las Vegas, Nevada
August 25, 1995


                               33
<PAGE>

<TABLE>
<CAPTION>


PAUL-SON GAMING CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
MAY 31, 1997 AND 1996

ASSETS                                                 1997           1996
------------------------------------------------------------------------------
<S>                                               <C>            <C>
Current Assets                                                              
  Cash and cash equivalents                       $   2,753,152  $    997,509
  Trade receivables, less allowance for doubtful                               
    accounts 1997 $269,140; 1996 $281,712             3,669,139     2,601,910
  Inventories (Note 2)                                5,350,446     5,604,630
  Prepaid expenses                                      140,962       170,903
  Other current assets                                  627,808       296,660
                                                  -------------  ------------
        TOTAL CURRENT ASSETS                         12,541,507     9,671,612
                                                  -------------  ------------
Property and Equipment, net (Notes 3 and 5)           7,250,030     7,259,423
                                                  -------------  ------------                          
Other Assets                                                                
  Note receivable (Note 6)                              150,000             -
  Goodwill and other assets                             455,205       470,090
                                                  -------------  ------------
                                                        605,205       470,090
                                                  -------------  ------------
                                                  $  20,396,742  $ 17,401,125
                                                  =============  ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities                                                         
  Current maturities of long-term debt (Note 5)   $      24,052  $     85,914
  Accounts payable (Note 6)                             727,196       661,521
  Accrued expenses                                      584,212       403,627
  Customer deposits                                   1,579,161       865,438
  Income tax payable (Note 8)                           318,930        54,170
                                                  -------------  ------------
        TOTAL CURRENT LIABILITIES                     3,233,551     2,070,670
                                                  -------------  ------------
Long-Term Debt, less current maturities
  Due to related parties (Note 6)                             -        15,000
  Other (Note 5)                                         67,424       456,161
                                                  -------------  ------------
                                                         67,424       471,161
                                                  -------------  ------------
Deferred Tax Liability (Note 8)                          11,060             -
                                                  -------------  ------------
Commitments and Contingencies (Note 7)
Stockholders' Equity (Note 9)                                               
  Preferred stock, authorized 10,000,000 shares,                               
    $.01 par value, none issued  and outstanding              -             -
  Common stock, authorized 30,000,000 shares,
    $.01 par value, issued and outstanding
    3,417,000 and 3,324,000 shares in 1997
    and 1996                                             34,170        33,240
Additional paid-in capital                           13,108,998    12,256,698
Retained earnings                                     3,941,539     2,569,356
                                                  -------------  ------------
                                                     17,084,707    14,859,294
                                                  -------------  ------------
                                                  $  20,396,742  $ 17,401,125
                                                  =============  ============
</TABLE>

         See Notes to Consolidated Financial Statements.
                                
                               34
<PAGE>

<TABLE>
<CAPTION>

PAUL-SON GAMING CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED MAY 31, 1997, 1996 AND 1995

                                                             1997          1996           1995
---------------------------------------------------------------------------------------------------                         
<S>                                                    <C>            <C>            <C>
Revenues                                               $  24,913,706  $  23,379,252  $  24,595,192
                                                                                                
Cost of revenues, including related party cost of                                               
 revenues of 1997-$ 0; 1996-$331,355;                                                           
 1995-$493,799  (Note 6)                                  17,223,759     16,323,043     17,137,403
                                                       -------------- -------------- --------------     
      GROSS PROFIT                                         7,689,947      7,056,209      7,457,789
                                                                                                
Selling, general and administrative expenses (Note 6)      5,967,735      6,577,397      7,738,507
                                                       -------------- -------------- --------------         
      OPERATING INCOME (LOSS)                              1,722,212        478,812       (280,718)
                                                                                                
Other income (expense)                                                                          
 Interest income                                              82,066         57,694        295,249
 Interest expense (Note 6)                                   (42,700)       (63,906)      (109,593)
 Other                                                       372,436         57,856        (45,744)
                                                       -------------- -------------- --------------        
      INCOME (LOSS) BEFORE INCOME TAXES                    2,134,014        530,456       (140,806)
                                                                                                
Income tax expense (Note 8)                                 (761,831)      (193,616)             -
                                                       -------------- -------------- --------------         
      NET INCOME (LOSS)                                $   1,372,183  $     336,840  $    (140,806)
                                                       ============== ============== ==============         
Earnings (loss) per share:                                                                      
 Primary                                               $        0.41  $        0.10  $       (0.04)
                                                       ============== ============== ==============
 Fully Diluted                                         $        0.38  $        0.10  $           -
                                                       ============== ============== ==============
</TABLE>

         See Notes to Consolidated Financial Statements.
                                
                               35
<PAGE>

<TABLE>
<CAPTION>

PAUL-SON GAMING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED MAY 31, 1997, 1996 AND 1995
                                                 
                                                                                                        
                                                       Common Stock         Additional                
                                                  ----------------------     Paid-in        Retained
                                                    Shares     Dollars       Capital        Earnings        Total
----------------------------------------------------------------------------------------------------------------------
<S>                                               <C>         <C>         <C>            <C>            <C>
Balance, May 31, 1994                              3,324,000  $   33,240  $  12,256,698  $  2,373,322   $  14,663,260
                                                                                                                  
     Net loss                                              -           -              -      (140,806)       (140,806)
                                                  --------------------------------------------------------------------
Balance, May 31, 1995                              3,324,000      33,240     12,256,698     2,232,516      14,522,454
                                                                                                                  
     Net income                                            -           -              -       336,840         336,840
                                                  --------------------------------------------------------------------
Balance, May 31, 1996                              3,324,000  $   33,240  $  12,256,698  $  2,569,356   $  14,859,294
                                                                                                                  
     Shares issued from the exercise of options       93,000         930        771,300             -         772,230
                                                                                                                  
     Income tax benefit from exercise of options                       -         81,000             -          81,000
                                                           -                                                      
     Net income                                            -           -              -     1,372,183       1,372,183
                                                  --------------------------------------------------------------------
Balance, May 31, 1997                              3,417,000  $   34,170  $  13,108,998  $  3,941,539   $  17,084,707
                                                  ====================================================================
</TABLE>

         See Notes to Consolidated Financial Statements.
                                
                               36
<PAGE>

<TABLE>
<CAPTION>
PAUL-SON GAMING CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED MAY 31, 1997, 1996 AND 1995

                                                                        1997            1996             1995
-------------------------------------------------------------------------------------------------------------------
<S>                                                               <C>             <C>              <C>
Cash Flows from Operating Activities                                                             
  Cash received from customers                                    $   24,554,494  $   24,513,389   $   22,756,375
  Cash paid to suppliers and employees                               (22,153,199)    (23,357,951)     (25,198,210)
  Interest paid                                                          (42,700)        (69,060)        (109,593)
  Interest received                                                       82,066          57,694          162,796
  Income tax refunds                                                      18,940         494,019                -
  Income taxes paid                                                     (404,778)         (6,750)        (850,271)
                                                                  -------------------------------------------------
    NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                2,054,823       1,631,341       (3,238,903)
                                                                  -------------------------------------------------
Cash Flows from Investing Activities
  Deposits on real property                                                    -               -         (200,000)
  Proceeds received on sale of property and equipment                    464,161          15,400           47,686
  Purchase of property and equipment                                    (919,972)     (3,059,544)      (2,824,588)
  Proceeds from short-term investments                                         -       1,493,536                -
  Investment in note receivable (Note 7)                                (150,000)              -                -
  Purchase of securities held to maturity                                      -               -       (1,427,124)
  Proceeds from securities held to maturity                                    -               -        6,000,000
                                                                  -------------------------------------------------
    NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES                 (605,811)     (1,550,608)       1,595,974
                                                                  -------------------------------------------------
Cash Flows from Financing Activities
  Payments on due to related party                                       (15,000)       (235,000)        (250,000)
  Proceeds from short-term borrowings                                    150,000               -                -
  Principal payments on short term-term borrowings                      (150,000)              -                -
  Principal payments on long-term borrowings                            (450,599)       (102,211)        (149,216)
  Proceeds from the issuance of common stock                             772,230               -                -
                                                                  -------------------------------------------------
    NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                  306,631        (337,211)        (399,216)
                                                                  -------------------------------------------------
    NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS               1,755,643        (256,478)      (2,042,145)
Cash and cash equivalents, beginning                                     997,509       1,253,987        3,296,132
                                                                  -------------------------------------------------
Cash and cash equivalents, ending                                 $    2,753,152  $      997,509   $    1,253,987
                                                                  =================================================
Reconciliation of Net Income (Loss) to Net Cash Provided By
  (Used in) Operating Activities                                                                               
  Net income (loss)                                               $    1,372,183  $      336,840   $     (140,806)
  Depreciation and amortization                                          791,643         768,787          585,924
  Accretion of discounts                                                       -               -         (132,453)
  Provision for bad debts                                                 96,000          96,000          912,697
  Gain on sale of property and equipment                                (326,439)          5,698          (11,608)
  Change in assets and liabilities:                                                                            
    (Increase) decrease in accounts receivable                        (1,163,229)        878,491         (308,791)
    (Increase) decrease in inventories                                   254,184          61,251       (2,517,960)
    (Increase) decrease in other assets                                 (316,263)        449,867         (231,773)
    (Increase) decrease in prepaid expenses                               29,941          11,449         (130,633)
    (Increase) decrease in income tax refund receivable                      -           661,499         (661,499)
    Increase (decrease) in accounts payable and accrued expenses         246,260      (1,884,803)       1,116,797
    Increase (decrease) in customer deposits                             713,723         192,092       (1,530,026)
    Increase (decrease) in income taxes payable                          345,760          54,170         (188,772)
    Increase in deferred tax liability                                    11,060               -                -
                                                                  ------------------------------------------------
    NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES           $    2,054,823  $    1,631,341   $   (3,238,903)
                                                                  ================================================
</TABLE>
                              
                               37
<PAGE>

PAUL-SON GAMING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 1.   NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS

Paul-Son   Gaming   Corporation,   including   its   subsidiaries
(collectively,  "Paul-Son"  or the  "Company"),  is  the  leading
manufacturer and supplier of casino table game equipment  in  the
United  States.   The  Company's products include  casino  chips,
table  layouts, playing cards, dice, furniture, table accessories
and  other products, which are used with casino table games  such
as  blackjack, poker, baccarat, craps and roulette.  The  Company
sells its products in every state in which casinos operate in the
United States and in various countries throughout the world.

BASIS OF CONSOLIDATION AND PRESENTATION

The  consolidated financial statements include  the  accounts  of
Paul-Son  and  its  wholly  owned subsidiaries,  Paul-Son  Gaming
Supplies, Inc. ("Paul-Son Supplies"), Paul-Son Mexicana, S.A.  de
C.V.  ("Mexicana") and Commercial Paul-Son,  S.A.  de  C.V.   All
material   intercompany  balances  and  transactions  have   been
eliminated in consolidation.

A  summary  of  the  Company's  significant  accounting  policies
follows:

CASH AND CASH EQUIVALENTS

The   Company   considers  all  highly  liquid  investments   and
repurchase agreements with original maturities of three months or
less to be cash and cash equivalents.

At various times throughout the year, the Company maintained cash
balances at financial institutions in excess of federally insured
amounts.

INVENTORY

Inventories are stated at the lower of cost or market.   Cost  is
determined using the first-in, first-out method.

PROPERTY AND EQUIPMENT

Property  and  equipment are stated at cost, net of depreciation.
Depreciation  is  computed primarily on the straight-line  method
for  financial  reporting purposes over the  following  estimated
useful lives:

<TABLE>
<CAPTION>
                                                     YEARS
                                                     -----
    <S>                                              <C>
    Buildings and improvements                       18-27
    Furniture and equipment                          5-10
    Vehicles                                         5-7
</TABLE>

GOODWILL

Goodwill is amortized on a straight-line basis over 20 years.
                                
                               38
<PAGE>

PAUL-SON GAMING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

ADVERTISING COSTS

Advertising  costs,  consisting primarily of costs  of  attending
industry trade shows, are expensed as incurred.

INCOME TAX

The  Company  uses  Statement of Financial  Accounting  Standards
("SFAS")  No.  109  issued by the Financial Accounting  Standards
Board  ("FASB") for financial accounting and reporting for income
taxes.   A current tax liability or asset is recognized  for  the
estimated  taxes  payable or refundable on tax  returns  for  the
current  year.   A deferred tax liability or asset is  recognized
for  the estimated future tax effects, based on provisions of the
enacted   law,   attributable   to  temporary   differences   and
carryforwards.

FOREIGN TRANSACTIONS

Sales  outside  of  the  United States are  not  significant  and
substantially all transactions occur in United States dollars.

EARNINGS PER SHARE

Earnings  per  share is computed by dividing net  income  by  the
weighted  average  number of common and common equivalent  shares
outstanding  during the period.  The weighted average  number  of
common  shares used in computing primary earnings per  share  was
3,330,764,  3,324,000 and 3,324,000 for fiscal  1997,  1996,  and
1995,  respectively.  The weighted average number of  common  and
common equivalent shares used in computing fully diluted earnings
per share was 3,647,810, 3,326,647 and 3,324,000 for fiscal 1997,
1996,  and 1995, respectively.  Common equivalent shares  include
the impact of outstanding dilutive stock options.

ESTIMATES

The  preparation  of  financial  statements  in  conformity  with
generally  accepted accounting principles requires management  to
make  estimates and assumptions that affect the reported  amounts
of assets and liabilities and disclosure of contingent assets and
liabilities  at  the  date of the financial  statements  and  the
reported  amounts of revenues and expenses during  the  reporting
period.  Actual results could differ from those estimates.

RELIANCE ON SUPPLIERS

For  certain  of  its products, the Company is dependent  upon  a
limited  number  of  suppliers to provide the  Company  with  raw
materials  for manufacturing and finished goods for distribution.
The  failure  of  one  or  more of these suppliers  to  meet  the
Company's   performance  specifications,  quality  standards   or
delivery  schedules could have a material adverse effect  on  the
Company.

                               39
<PAGE>

PAUL-SON GAMING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

STOCK OPTIONS

The Company has adopted the disclosure requirement under SFAS No.
123,  Accounting  for  Stock-Based Compensation.   SFAS  No.  123
establishes accounting and disclosure requirements using  a  fair
value  based  method  of  accounting  for  stock  based  employee
compensation  plans.  Under SFAS No. 123 the Company  may  either
adopt the new fair value based accounting method or continue  the
intrinsic  value  based method under Accounting Principles  Board
("APB") Opinion No. 25 and provide pro forma disclosures  of  net
income and earnings per share as if the accounting provisions  of
SFAS  No.  123  had  been adopted.  The Company  has  elected  to
account for its plans under APB Opinion No. 25 and calculate  the
pro  forma  disclosures  of net income  and  earnings  per  share
required under SFAS No. 123.

LONG LIVED ASSETS

In May 1995,  SFAS No. 121 "Accounting for the Impairment of Long-
Lived  Assets  and for Long-Lived Assets to be Disposed  Of"  was
issued.  SFAS No. 121 requires that long-lived assets and certain
identifiable  intangibles to be held and used  by  an  entity  be
reviewed   for   impairment  whenever  events   or   changes   in
circumstances indicate that the carrying amount of an  asset  may
not  be  recoverable.  During 1997, the Company adopted SFAS  No.
121, the effect of which was not material.

RECENTLY ISSUED ACCOUNTING STANDARDS

The  FASB  issued SFAS No. 128, "Earnings Per Share" in  February
1997.   This  statement establishes standards for computing   and
presenting earnings per share and is effective for the  Company's
fiscal  year  ending May 31, 1998.  Earlier application  of  this
statement  is  not  permitted.  The  Company  believes  that  the
implementation  of  this statement will not  have  a  significant
effect on earnings per share.

The  FASB issued SFAS No. 129, "Disclosure of  Information  about
Capital  Structure" in February 1997.  This statement establishes
standards  for  disclosing information about an entity's  capital
structure  and is effective for the Company's fiscal year  ending
May  31,  1998.   The  Company  plans  to  adopt  the  disclosure
requirements of SFAS No. 129.

The FASB issued SFAS No. 130, "Reporting Comprehensive Income" in
June 1997. This statement requires a company 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 stockholder's  equity  section
of  the  consolidated  balance  sheet.  This  statement  will  be 
effective for the Company's fiscal year ending May 31, 1999.  The 
Company  has not  determined  the effect of this statement on its
financial statement disclosure.

The  Company  is required to adopt SFAS No.131, "Disclosure About
Segments of an Enterprise and related Information" in the  fiscal
year  ending May 31, 1999.  This statement establishes additional
standards for segment reporting in the financial statements.  The
Company  has not determined the effect of this statement  on  its
financial statement disclosure.

                               40
<PAGE>

PAUL-SON GAMING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 2.   INVENTORIES

Inventories consist of the following at May 31:

<TABLE>
<CAPTION>
                                               1997         1996
                                         ----------------------------
          <S>                               <C>           <C>
          Raw materials                  $   1,977,089 $   2,778,329
          Work in process                      465,514       436,726
          Finished goods                     2,907,843     2,389,575
                                         ----------------------------
                                         $   5,350,446 $   5,604,630
                                         ============================
</TABLE>

NOTE 3.   PROPERTY AND EQUIPMENT

Property and equipment consist of the following at May 31:

<TABLE>
<CAPTION>
                                                    1997          1996
          <S>                                <C>              <C>
          Land                               $      728,412   $     805,052
          Buildings and improvements              5,913,362       6,126,608
          Furniture and equipment                 3,475,883       2,774,628
          Vehicles                                  876,892         819,153
                                             -------------------------------
                                                 10,994,549      10,525,441
          Less accumulated depreciation           3,744,519       3,266,018
                                             -------------------------------
                                             $    7,250,030   $   7,259,423
                                             ===============================
</TABLE>

NOTE 4.   SHORT-TERM BORROWINGS

The  Company finances some of its activities through a  revolving
line  of credit with a financial institution which allows maximum
borrowings of the lesser of $750,000 or 75% of eligible  accounts
receivable.   Borrowings are collateralized by a  general  pledge
agreement  covering the Company's accounts receivable, inventory,
certain  fixed  assets  and depository accounts.   There  was  no
balance outstanding under the line of credit at May 31, 1997  and
at May 31, 1996.  There was no activity on the line for the years
ending  May 31, 1997 and 1996.  Interest on the line is based  on
the  institution's  prime  rate plus 2%,  payable  monthly.   The
credit   agreements  contain  restrictive  covenants,   generally
requiring  the  Company to maintain certain financial  ratios  as
defined in the agreement.  As of May 31, 1997 the Company was  in
compliance  with all financial ratios and covenants  required  as
defined in the agreement.

                               41
<PAGE>

PAUL-SON GAMING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 5.   LONG-TERM DEBT AND PLEDGED ASSETS

Long-term debt, excluding amounts due to related parties,
consists of the following at May 31:

<TABLE>
<CAPTION>
                                                     1997            1996
                                                -----------------------------
<S>                                             <C>             <C>
Notes payable to bank, collateralized by                               
  a deed of trust, interest at 8%,                                    
  principal and interest payments of                                  
  $6,077 are due monthly through 1998           $         0     $   406,376
                                                                      
Various notes payable for equipment,                                   
  interest at 14.5% to 25.5%, payable in                             
  monthly payments of $6,300 through  1998           27,472          67,643
         
Notes payable to mortgage companies,                                   
  collateralized by real estate,                                     
  interest at 7.5% to 9.5%, principal                                
  and interest payments of $898 are due             
  monthly through 2016                               64,004          68,056
                                                ----------------------------
                                                     91,476         542,075
                  Less current portion               24,052          85,914
                                                ----------------------------
                                                $    67,424     $   456,161
                                                ============================
</TABLE>

Estimated annual principal maturities of long-term debt at May
31, 1997 are as follows:

<TABLE>
<CAPTION>

               <S>                                    <C>
                1998                                  $    24,052
                1999                                       14,499
                2000                                        6,220
                2001                                        6,723
                2002                                        2,642
                Thereafter                                 37,340
                                                      ------------
                                                      $    91,476
                                                      ============
</TABLE>

The majority stockholder has personally guaranteed approximately
$27,472 of the above debt.

                               42
<PAGE>

PAUL-SON GAMING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 6.   RELATED PARTIES

The Company purchased plastic coated playing cards from an entity
related  through common ownership.  Included in accounts  payable
at  May 31, 1997 and 1996, are payables to the related entity for
these   purchases  in  the  amounts  of  $21,343   and   $33,859,
respectively.  Included in interest expense is approximately  $0,
$7,000  and  $23,000 to related parties in 1997, 1996  and  1995,
respectively.

The  following  amounts  were  paid for  legal,  accounting,  and
consulting  services to individuals who are  currently,  or  have
been, members of the Company's Board of Directors:

<TABLE>
<CAPTION>
                                    1997          1996         1995
                                --------------------------------------
          <S>                   <C>          <C>           <C>
          Laurence A. Speiser   $   134,317  $   128,591   $  152,033
          Wayne H. White                  0       23,819       56,575
          Michael E. Cox             18,377       36,691       79,493
</TABLE>

Due to related parties consists of the following at May 31:

<TABLE>
<CAPTION>
                                                          1997        1996
       <S>                                             <C>         <C>
       Unsecured note payable to majority                                    
          stockholder, annual payments of $125,000     $       0   $   15,000
          plus interest at 6%
                                                                              
          Less current portion                                              -
                                                       -----------------------
                                                       $       0   $   15,000
                                                       =======================
</TABLE>

On  November  22,  1996, the Company advanced  to  a  director  a
$150,000  line of credit.  The line of credit is to be repaid  in
full  on  or before December 31, 1998, with interest only payable
to  the Company at an interest rate equal to prime plus 2%.   The
loan  is  secured by a general pledge agreement covering all  the
director's  assets,  rights to purchase  certain  shares  of  the
Company's  stock, and a pledge of certain shares of the Company's
common stock by the Company's principal stockholder.

NOTE 7.   COMMITMENTS AND CONTINGENCIES

The  Company  leases land, manufacturing and office  space  under
operating leases with terms of between 3 to 8 years.  Approximate
minimum annual rental commitments at May 31, 1997 are as follows:

<TABLE>
<CAPTION>
                   <S>                              <C>
                   1998                             $    213,107
                   1999                                  191,217
                   2000                                  152,683
                   2001                                  130,515
                   2002                                        0
                   Thereafter                                  0
                                                    -------------
                                                    $    687,522
                                                    =============
</TABLE>

                               43
<PAGE>

PAUL-SON GAMING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The Company has a twelve year option to extend the  lease  at one
facility.   The  annual  rent during the first  8  year  term  is
$142,380.   The  rent  payments during  the  option  period  will
increase 5% annually.

Rent  expense  totaled $233,633, $228,222 and $231,186  in  1997,
1996 and 1995, respectively.

The  Company  is party to various claims arising  in  the  normal
course  of business.  Management believes that these matters  are
expected  to be resolved with no material impact on the Company's
financial position, liquidity, or results of operations.

NOTE 8.   INCOME TAX MATTERS

The  provision  (benefit)  for  income  taxes  reflected  in  the
Statements  of Income for the years ended May 31, 1997  and  1996
consisted of:

<TABLE>
<CAPTION>
                                    1997           1996
<S>                           <C>             <C>
Current                       $     799,238   $     193,616
Deferred                            (37,407)              0
                              ------------------------------                        
Total provision (benefit)     $     761,831   $     193,616
                              ==============================
</TABLE>

The  provision  (benefit) for income taxes differs  from  amounts
computed by applying the federal income tax rate of 34%  for  the
year ended May 31, 1997 and 1996, to income before provision  for
federal income taxes for the following reasons:

<TABLE>
<CAPTION>
                                                         1997          %       1996          %
                                                      -------------------------------------------
<S>                                                   <C>            <C>    <C>            <C>
Federal and state income tax at statutory rate        $   725,565    34.00  $  180,000     34.00
Adjustments:                                                                                    
 Meals and entertainment                                   21,697     1.02      23,000      4.34
 State taxes                                               35,348     1.66      10,600      2.00
 Other                                                    (20,779)   (0.98)    (19,984)    -3.76
                                                      -------------------------------------------
 Total provision for income taxes                     $   761,831    35.70  $  193,616     36.58
                                                      ============          ===========         
</TABLE>

As of May 31, 1997 and 1996, there were no material temporary
differences or carryforwards.

NOTE 9.   STOCK OPTION PROGRAMS

The  Company has stock option programs which consist of the  1994
Long-Term  Incentive  Plan (the "Incentive Plan")  and  the  1994
Directors'  Stock  Option  Plan  (the  "Directors'  Plan").   The
Incentive  Plan  provides  for the  grant  of  stock  options  to
executive officers, key employees,

                               44
<PAGE>

PAUL-SON GAMING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

outside  consultants and employee-directors.  On July  29,  1996,
the  Board  of  Directors  amended and stockholders  subsequently
approved  to  increase the aggregate shares  issuable  under  the
Incentive  Plan  to 1,000,000 from 500,000 shares.   The  options
granted  under the Incentive Plan expire 10 years after the  date
of  grant.   The Directors' Plan provides that each  non-employee
director,  upon joining the Board of Directors, will  receive  an
option  to  purchase 3,000 shares of common stock.   The  initial
option  grant vests over a 3 year period, with one-third  of  the
option  grant vesting at the end of each year.  At the  beginning
of the fourth year of service on the Board of Directors, and each
year  thereafter,  each nonemployee director receives  an  annual
grant  to  purchase 1,000 shares of common stock.   In  addition,
each year each non-employee director receives options to purchase
1,000  shares  of  common  stock for  serving  on  the  following
committees  of  the Board of Directors for at  least  six  months
prior   to   the  date  of  grant:   the  Audit  Committee;   the
Compensation Committee; and the Compliance Committee.  No  option
is exercisable sooner than 6 months and one day after the date of
grant.   The options expire on the tenth anniversary of the  date
of  grant  or  9 months after retirement or 2 years after  death.
Options  covering 3,000 and 6,000 shares were granted during  the
year  ended May 31, 1997 and 1996, at $8.06 and $6.50 per  share,
respectively.

The  following is a summary of option activity for  the  3  years
ended May 31, 1997:

<TABLE>
<CAPTION>
                                                                     Weighted
                                           Options       Shares       Average
                                           Available     Under       Exercise
                                          for Grant       Plan        Price
                                          ------------------------------------
<S>                                        <C>          <C>          <C>
Outstanding at May 31, 1994                 265,500       309,500    $  11.27
                                                                              
     Granted                                (36,500)       36,500       13.41
     Canceled                                42,250       (42,250)      11.25
     Exercised                                    -             -           -
                                          ------------------------------------                                 
                                                                              
Outstanding at May 31, 1995                 271,250       303,750       11.53
                                                                              
     Granted                               (326,000)      326,000        8.66
     Canceled                               306,750      (306,750)      11.49
     Exercised                                    -             -           -
                                          ------------------------------------                                 
                                                                              
Outstanding at May 31, 1996                 252,000       323,000    $   8.71
                                                                              
     Additional shares reserved             500,000             -           -
     Granted                               (715,000)      715,000        8.95
     Canceled                                35,000       (35,000)       8.15
     Exercised                               93,000       (93,000)       8.30
                                          ------------------------------------                                 
Outstanding at May 31, 1997                 165,000       910,000    $   8.96
                                          ====================================
</TABLE>

                               45
<PAGE>

PAUL-SON GAMING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

                                                          1997       1996
                                                         ------     ------
The weighted average fair value of options granted       $4.27      $4.21
                                                                    
The following table summarizes information concerning currently
outstanding and exercisable options:

<TABLE>
<CAPTION>
                ---------------------------------------------------------------------
                            Options Outstanding               Options Exercisable
                ---------------------------------------------------------------------
                                     Weighted
                                      Average     Weighted                  Weighted
      Range of                      Remaining      Average                   Average
      Exercise          Number    Contractual     Exercise       Number     Exercise
        Prices     Outstanding           Life        Price  Exercisable        Price
 ------------------------------------------------------------------------------------
 <S>                   <C>               <C>     <C>            <C>         <C>
 $ 6.5 to  9.0         680,000           9.41    $    8.21      162,500     $   8.21
 $ 9.0 to 13.0         230,000           9.68    $   11.17        3,000     $  13.00
 ------------------------------------------------------------------------------------
                       910,000                                  165,500
 ------------------------------------------------------------------------------------
</TABLE>

The  Company accounts for these plans under APB Opinion  No.  25,
under  which  no  compensation cost  has  been  recognized.   Had
compensation cost for these plans been determined consistent with
SFAS  No.  123,  "Accounting for Stock Based  Compensation",  the
Company's  net  income  and earning per  share  would  have  been
reduced to the following pro forma amounts:

<TABLE>
<CAPTION>
                                              1997              1996
     <S>                 <C>              <C>               <C>       
     Net income:         As reported:     $ 1,372,183       $  336,840
                         Pro forma:            11,115          177,812

     Earnings per share: As reported:
                           Primary        $      0.41       $     0.10
                           Fully diluted  $      0.38       $     0.10

                         Pro forma:
                           Primary        $         0       $     0.05
                           Fully diluted  $         0       $     0.05

Pro forma earnings reflect only options granted in 1997 and 1996.
Therefore, the full impact of calculating compensation  cost  for
stock  options under SFAS No. 123 is not reflected in  pro  forma
net  income because  compensation costs are  reflected  over  the
option-vesting period and compensation costs for options  granted
prior to fiscal 1996 is not considered.

The  fair value of each option is estimated on the date of  grant
using  the Black-Scholes option pricing model with  the following
assumptions  used  for 1997 and 1996 grants;  risk-free  interest
rate  at  the  date  of grant which ranged  from  5.6%  to  6.7%;
expected  dividend yield of 0.0%; expected life of 5  years;  and
expected violatility of 43.79%.

As of May 31, 1997, a maximum of 1,075,000 shares of common stock
have  been reserved for issuance under these plans. None  of  the
options can be granted at less than the fair market value of  the
Company's common stock on the date of grant.

                               46
<PAGE>

PAUL-SON GAMING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 10.  CASH FLOW INFORMATION

There   were  no  significant  noncash  investing  or   financing
activities during the years ended May 31,  1997, 1996, and 1995.


                               47
<PAGE>

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
          ACCOUNTING AND FINANCIAL DISCLOSURE
       
     None

PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     This  information  is  incorporated by  reference  from  the
Company's  Proxy  Statement to be filed with the  Securities  and
Exchange  Commission  (the "Commission") in connection  with  the
Annual Meeting of Stockholders on October 13, 1997.

ITEM 11.  EXECUTIVE COMPENSATION

     This  information  is  incorporated by  reference  from  the
Company's  Proxy  Statement to be filed with  the  Commission  in
connection with the Annual Meeting of Stockholders on October 13,
1997.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT

     This  information  is  incorporated by  reference  from  the
Company's  Proxy  Statement to be filed with  the  Commission  in
connection with the Annual Meeting of Stockholders on October 13,
1997.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     This  information is incorporated by reference the Company's
Proxy  Statement  to be filed with the Commission  in  connection
with the Annual Meeting of Stockholders on October 13, 1997.

PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
          FORM 8-K

     (a)  1.   FINANCIAL STATEMENTS

               Included in Part II of this report:
               
               Consolidated  Balance Sheets at May 31,  1997  and
               1996.
               
               Consolidated  Statements  of  Operations  for  the
               Years Ended May 31, 1997, 1996 and 1995.
               
               Consolidated  Statements of  Stockholders'  Equity
               for the Years Ended May 31, 1997, 1996 and 1995.
               
                               48
   
<PAGE>

               Consolidated  Statements of  Cash  Flows  for  the
               Years Ended May 31, 1997, 1996 and 1995.
               
               Notes to Consolidated Financial Statements
               
          2.   FINANCIAL STATEMENT SCHEDULES

               Schedule II - Valuation and Qualifying Account
               
               Other schedules are omitted because of the absence
               of  conditions  under which they are  required  or
               because the required information is given  in  the
               financial statements or notes thereto.
               
     (b)  REPORTS ON FORM 8-K

          None.
          
     (c)  EXHIBITS

          3.01   Articles  of  Incorporation of Paul-Son  Gaming
                 Corporation  and  Certificate of  Amendment  of
                 Articles  of  Incorporation of Paul-Son  Gaming
                 Corporation  incorporated herein  by  reference
                 from  the  Company's registration statement  on
                 Form S-1 (SEC No. 33-74758), Part II, Item  16,
                 Exhibit 3.01.

          3.02   Bylaws    of    Paul-Son   Gaming   Corporation
                 incorporated  herein  by  reference  from   the
                 Company's  registration statement on  Form  S-1
                 (SEC  No. 33-74758), Part II, Item 16,  Exhibit
                 3.02.

          4.01   Plan and Agreement of Merger and Exchange dated
                 March  25, 1994 between Paul-Son Playing Cards,
                 Inc.,  Paul-Son Casino Supplies of New  Jersey,
                 Inc.,  Paul-Son  Dice and Card, Inc.,  Paul-Son
                 Gaming  Corporation, Paul S. Endy, and Eric  P.
                 Endy, incorporated herein by reference from the
                 Company's  annual report on Form 10-K  for  the
                 year  ended May 31, 1994, Part IV, Item  14(c),
                 Exhibit 4.01.

          4.02   Specimen  Common  Stock  Certificate  for   the
                 Common  Stock  of  Paul-Son Gaming  Corporation
                 incorporated  herein  by  reference  from   the
                 Company's  registration statement on  Form  S-1
                 (SEC  No. 33-74758), Part II, Item 16,  Exhibit
                 4.01.

                               49

<PAGE>

          10.01  Loan  Agreement dated January 9,  1996  by  and
                 between  Paul-Son  Gaming  Supplies,  Inc.,  as
                 borrower, and First Interstate Bank of  Nevada,
                 N.A.,  as lender; Promissory Note dated January
                 9,  1996, executed by Paul-Son Gaming Supplies,
                 Inc.,  payable to the order of First Interstate
                 Bank   of  Nevada,  N.A.;  Commercial  Security
                 Agreement  dated January 9, 1996,  executed  by
                 Paul-Son  Gaming Supplies, Inc., as debtor,  in
                 favor of First Interstate Bank of Nevada, N.A.,
                 as  secured  party; Commercial  Guaranty  dated
                 January 9, 1996, by and between Paul-Son Gaming
                 Supplies, Inc. As borrower and Paul-Son  Gaming
                 Corporation  as guarantor and First  Interstate
                 Bank  of  Nevada, N.A., as lender, incorporated
                 herein  by reference from the Company's  annual
                 report on Form 10-K for the year ended May  31,
                 1996, Part IV, Item 14(c), Exhibit 10.02.

          10.02  Paul-Son  Gaming  Corporation  1994  Directors'
                 Stock  Option Plan (as amended July 29,  1996),
                 incorporated  herein  by  reference  from   the
                 Company's  annual report on Form 10-K  for  the
                 year  ended May 31, 1996, Part IV, Item  14(c),
                 Exhibit 10.03.

          10.03  Paul-Son   Gaming  Corporation  1994  Long-Term
                 Incentive  Plan  (as amended  July  29,  1996),
                 incorporated  herein  by  reference  from   the
                 Company's  annual report on Form 10-K  for  the
                 year  ended May 31, 1996, Part IV, Item  14(c),
                 Exhibit 10.04.

          10.04  Lease  dated  May  17,  1993,  by  and  between
                 Paul-Son Mexicana S.A. de C.V., as lessee,  and
                 Coprodiedad   Arte   Y   Diseno,   as    lessor
                 incorporated  herein  by  reference  from   the
                 Company's  registration statement on  Form  S-1
                 (SEC  No. 33-74758), Part II, Item 16,  Exhibit
                 10.05.

          10.05  Exclusive    Distributor    Agreement     dated
                 November  1, 1993, by and between Jones  Casino
                 Supplies, Inc. and Paul-Son Supplies and  Card,
                 Inc. incorporated herein by reference from  the
                 Company's  registration statement on  Form  S-1
                 (SEC  No. 33-74758), Part II, Item 16,  Exhibit
                 10.13.

          10.06  Consulting  Agreement dated July 29,  1996,  by
                 and  between  Paul-Son Gaming  Corporation  and
                 Martin   S.   Winick;  Addendum  to  Consulting
                 Agreement  by and between Martin S. Winick  and
                 Paul-Son Gaming Corporation dated November  19,
                 1996,    by   and   between   Paul-Son   Gaming
                 Corporation  and Martin S. Winick, incorporated
                 herein  by reference from the company's  report
                 on Form 10-Q for the quarter ended November 30,
                 1996, Part II, Item 6(a), Exhibit 10.01.

                               50

<PAGE>

          10.07  Line  of  Credit Agreement dated  November  19,
                 1996,    by   and   between   Paul-Son   Gaming
                 Corporation  and  Martin  S.  Winick,  Line  of
                 Credit Promissory Note, dated November 1996, by
                 Martin  S. Winick, in favor of Paul-Son  Gaming
                 Corporation; Security Agreement dated  November
                 19, 1996, by Martin S. Winick, in favor of Paul-
                 Son  Gaming  Corporation; Assignment  Agreement
                 dated November 19, 1996, by Martin S. Winick to
                 Paul-Son  Gaming  Corporation;  and  Collateral
                 Undertaking Agreement dated November 19,  1996,
                 by  and between Paul S. Endy, Jr., individually
                 and  as trustee of the Paul S. Endy, Jr. Living
                 Trust,   and   Paul-Son   Gaming   Corporation,
                 incorporated  herein  by  reference  from   the
                 Company's  report on Form 10-Q for the  quarter
                 ended  November 30, 1996, Part II,  Item  6(a),
                 Exhibit 10.02.

          10.08  Master  Agreement dated July 30, 1997,  by  and
                 between  Authentic Products, Inc. and  Gridiron
                 Marketing, LLC, which includes as Exhibit C the
                 form  of  Operating  Agreement  of  Brand   One
                 Marketing,  LLC dated August 4,  1997,  by  and
                 between  Gridiron Marketing, LLC, and Authentic
                 Products, Inc.

          21.01  List   of   subsidiaries  of  Paul-Son   Gaming
                 Corporation.

          23.01  Consent of Deloitte & Touche LLP.

          23.02  Consent of McGladrey & Pullen, LLP.

          27.01  Financial Data Schedule

                               51

<PAGE>

             [Letterhead of McGladrey & Pullen, LLP]
                                
                  INDEPENDENT AUDITOR'S REPORT
                         ON THE SCHEDULE
                                
To the Board of Directors
PAUL-SON GAMING CORPORATION
Las Vegas, Nevada

Our  audit  of the consolidated financial statements of  Paul-Son
Gaming   Corporation  and  Subsidiaries  included   Schedule   II
contained herein, for the year ended May 31, 1995.

In  our  opinion,  the schedule presents fairly  the  information
required  to  be  set forth therein in conformity with  generally
accepted accounting principles,

/s/ McGladrey & Pullen, LLP

Las Vegas, Nevada
August 25, 1995
                                
                               52
                                
<PAGE>

PAUL-SON GAMING CORPORATION AND SUBSIDIARIES

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED MAY 31, 1997, 1996 AND 1995


</TABLE>
<TABLE>
<CAPTION>

                                 BALANCE AT       PROVISIONS                       BALANCE AT
                                  BEGINNING       CHARGED TO                         END OF
   YEARS ENDED MAY 31,             OF YEAR         EXPENSES       CHARGE-OFFS         YEAR
-----------------------------------------------------------------------------------------------
<S>                              <C>              <C>             <C>              <C>
Allowance for doubtful accounts
                                                                                          
           1997                  $  281,712       $   96,000      $   108,572      $  269,140
                                 =============================================================
           1996                  $  214,000       $   96,000      $    28,288      $  281,712
                                 =============================================================
           1995                  $   20,000       $  912,697      $   718,697      $  214,000
                                 =============================================================
</TABLE>

                               53
                                
<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.

                                 PAUL-SON GAMING CORPORATION
                                 
August 28, 1997                  By:  /s/ Paul S. Endy, Jr.
                                      Paul S. Endy, Jr.
                                      Chief Executive Officer
                                      (Principal Executive Officer)

<TABLE>
<CAPTION>

     Pursuant to the requirements of the Securities Exchange  Act
of  1934,  this  report has been signed below  by  the  following
persons on behalf of the registrant and in the capacities and  on
the dates indicated.
<S>                                   <C>
August 28, 1997                       /s/ Paul S. Endy, Jr.
                                      Paul S. Endy, Jr.
                                      Chairman of the Board and
                                      Chief Executive Officer

                                      /s/ Eric P. Endy
                                      Eric P. Endy
                                      President and Director
                                     
                                      /s/ Kirk Scherer
                                      Kirk Scherer, Treasurer and Chief
                                         Financial Officer
                                      (Principal Financial and Accounting Officer)

                               54
                                
<PAGE>

                                      /s/ Laurence A. Speiser
                                      Laurence A. Speiser, Secretary and
                                      Director
                                     
                                      /s/ Jerry G. West
                                      Jerry G. West, Director
                                     
                                      /s/ Richard W. Scott
                                      Richard W. Scott, Director
                                     
                                      /s/ Martin S. Winick
                                      Martin S. Winick, Director
                                     
                               55
                                
<PAGE>

                          EXHIBIT INDEX

EXHIBIT NO.  DESCRIPTION                                PAGE NO.

3.01        Articles of Incorporation of Paul-Son Gaming
            Corporation and Certificate of Amendment  of
            Articles of Incorporation of Paul-Son Gaming
            Corporation incorporated herein by reference
            from the Company's registration statement on
            Form  S-1  (SEC  No.  33-74758),  Part   II,
            Item 16, Exhibit 3.01.

3.02        Bylaws   of   Paul-Son  Gaming   Corporation
            incorporated  herein by reference  from  the
            Company's registration statement on Form S-1
            (SEC  No.  33-74758),  Part  II,  Item   16,
            Exhibit 3.02.

4.01        Plan  and  Agreement of Merger and  Exchange
            dated   March  25,  1994  between   Paul-Son
            Playing   Cards,   Inc.,   Paul-Son   Casino
            Supplies of New Jersey, Inc., Paul-Son  Dice
            and Card, Inc., Paul-Son Gaming Corporation,
            Paul S. Endy, and Eric P. Endy, incorporated
            herein   by  reference  from  the  Company's
            annual  report  on Form 10-K  for  the  year
            ended  May  31, 1994, Part IV,  Item  14(c),
            Exhibit 4.01.

4.02        Specimen  Common Stock Certificate  for  the
            Common  Stock of Paul-Son Gaming Corporation
            incorporated  herein by reference  from  the
            Company's registration statement on Form S-1
            (SEC  No.  33-74758),  Part  II,  Item   16,
            Exhibit 4.01.

10.01       Loan Agreement dated January 9, 1996 by  and
            between  Paul-Son Gaming Supplies, Inc.,  as
            borrower,  and  First  Interstate  Bank   of
            Nevada,  N.A.,  as lender;  Promissory  Note
            dated  January 9, 1996, executed by Paul-Son
            Gaming Supplies, Inc., payable to the  order
            of  First  Interstate Bank of Nevada,  N.A.;
            Commercial Security Agreement dated  January
            9,   1996,   executed  by  Paul-Son   Gaming
            Supplies, Inc., as debtor, in favor of First
            Interstate Bank of Nevada, N.A., as  secured
            party; Commercial Guaranty dated January  9,
            1996,   by   and  between  Paul-Son   Gaming
            Supplies,  Inc.  As  borrower  and  Paul-Son
            Gaming  Corporation as guarantor  and  First
            Interstate Bank of Nevada, N.A., as  lender,
            incorporated  herein by reference  from  the
            Company's annual report on Form 10-K for the
            year  ended  May  31, 1996,  Part  IV,  Item
            14(c), Exhibit 10.02.

10.02       Paul-Son  Gaming Corporation 1994 Directors'
            Stock  Option  Plan  (as  amended  July  29,
            1996), incorporated herein by reference from
            the Company's annual report on Form 10-K for
            the  year ended May 31, 1996, Part IV,  Item
            14(c), Exhibit 10.03.

10.03       Paul-Son  Gaming Corporation 1994  Long-Term
            Incentive  Plan (as amended July 29,  1996),
            incorporated  herein by reference  from  the
            Company's annual report on Form 10-K for the
            year  ended  May  31, 1996,  Part  IV,  Item
            14(c), Exhibit 10.04.

                               56

<PAGE>

10.04       Lease  dated  May 17, 1993, by  and  between
            Paul-Son  Mexicana S.A. de C.V., as  lessee,
            and  Coprodiedad  Arte Y Diseno,  as  lessor
            incorporated  herein by reference  from  the
            Company's registration statement on Form S-1
            (SEC  No.  33-74758),  Part  II,  Item   16,
            Exhibit 10.05.

10.05       Exclusive   Distributor   Agreement    dated
            November  1,  1993,  by  and  between  Jones
            Casino  Supplies, Inc. and Paul-Son Supplies
            and   Card,  Inc.  incorporated  herein   by
            reference  from  the Company's  registration
            statement  on  Form S-1 (SEC No.  33-74758),
            Part II, Item 16, Exhibit 10.13.

10.06       Consulting Agreement dated July 29, 1996, by
            and  between Paul-Son Gaming Corporation and
            Martin  S.  Winick; Addendum  to  Consulting
            Agreement  by and between Martin  S.  Winick
            and   Paul-Son   Gaming  Corporation   dated
            November  19, 1996, by and between  Paul-Son
            Gaming  Corporation and  Martin  S.  Winick,
            incorporated  herein by reference  from  the
            company's  report  on  Form  10-Q  for   the
            quarter  ended November 30, 1996,  Part  II,
            Item 6(a), Exhibit 10.01.

10.07       Line of Credit Agreement dated November  19,
            1996,   by   and  between  Paul-Son   Gaming
            Corporation  and Martin S. Winick,  Line  of
            Credit Promissory Note, dated November 1996,
            by  Martin  S. Winick, in favor of  Paul-Son
            Gaming Corporation; Security Agreement dated
            November  19, 1996, by Martin S. Winick,  in
            favor   of   Paul-Son  Gaming   Corporation;
            Assignment  Agreement  dated  November   19,
            1996, by Martin S. Winick to Paul-Son Gaming
            Corporation;   and  Collateral   Undertaking
            Agreement  dated November 19, 1996,  by  and
            between Paul S. Endy, Jr., individually  and
            as  trustee of the Paul S. Endy, Jr.  Living
            Trust,   and  Paul-Son  Gaming  Corporation,
            incorporated  herein by reference  from  the
            Company's  report  on  Form  10-Q  for   the
            quarter  ended November 30, 1996,  Part  II,
            Item 6(a), Exhibit 10.02.

10.08       Master Agreement dated July 30, 1997, by and     58
            between   Authentic   Products,   Inc.   and
            Gridiron  Marketing, LLC, which includes  as
            Exhibit C the form of Operating Agreement of
            Brand  One  Marketing, LLC dated  August  4,
            1997,  by  and  between Gridiron  Marketing,
            LLC, and Authentic Products, Inc.

21.01       List  of  subsidiaries  of  Paul-Son  Gaming    120
            Corporation.

23.01       Consent of Deloitte & Touche LLP.               122

23.02       Consent of McGladrey & Pullen, LLP.             124

27.01       Financial Data Schedule                         126

                               57

</TABLE>