<PAGE>

                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                For the quarterly period ended November 23, 2002

Commission file number  1-11250

                           GTECH Holdings Corporation
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

          Delaware                                          05-0450121
--------------------------------                 -------------------------------
(State or other jurisdiction of                  (I.R.S. Employer Identification
 incorporation or organization)                               Number)

55 Technology Way, West Greenwich, Rhode Island                02817
--------------------------------------------------------------------------------
(Address of principal executive offices)                     (Zip Code)

Registrant's telephone number, including area code: (401) 392-1000

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

Yes  X    No

At December 28, 2002, there were 56,522,801 shares of the registrant's Common
Stock outstanding.
<PAGE>
INDEX

GTECH HOLDINGS CORPORATION AND SUBSIDIARIES

<TABLE>
<CAPTION>
                                                                                          Page
                                                                                         Number
                                                                                         ------
<S>                                                                                     <C>
PART I. FINANCIAL INFORMATION

Item 1.     Financial Statements

            Consolidated Balance Sheets                                                     3

            Consolidated Income Statements                                                4-5

            Consolidated Statements of Cash Flows                                           6

            Consolidated Statements of Shareholders' Equity                                 7

            Notes to Consolidated Financial Statements                                   8-23

Item 2.     Management's Discussion and Analysis of Financial Condition                 24-37
            and Results of Operations

Item 3.     Quantitative and Qualitative Disclosures about Market Risk                     38

Item 4.     Controls and Procedures                                                        38

PART II. OTHER INFORMATION

Item 1.     Legal Proceedings                                                              38

Item 6.     Exhibits and Reports on Form 8-K                                               39

SIGNATURES                                                                                 40

CERTIFICATIONS                                                                          41-42

EXHIBITS
</TABLE>
<PAGE>
PART 1.   FINANCIAL INFORMATION

Item 1.   FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS

GTECH HOLDINGS CORPORATION AND SUBSIDIARIES

<TABLE>
<CAPTION>
                                                                                                (Unaudited)
                                                                                                November 23,      February 23,
                                                                                                    2002              2002
                                                                                               -------------     -------------
                                                                                                    (Dollars in thousands)
<S>                                                                                            <C>               <C>
ASSETS
CURRENT ASSETS:
  Cash and cash equivalents                                                                    $      97,509     $      35,095
  Trade accounts receivable                                                                           82,815           100,361
  Sales-type lease receivables                                                                         4,454             4,894
  Inventories                                                                                         71,685            86,629
  Deferred income taxes                                                                               28,321            28,321
  Other current assets                                                                                18,369            22,730
                                                                                               -------------     -------------
              TOTAL CURRENT ASSETS                                                                   303,153           278,030

SYSTEMS, EQUIPMENT AND OTHER ASSETS RELATING TO CONTRACTS                                            398,157           369,595

GOODWILL                                                                                             115,498           116,828

OTHER ASSETS                                                                                          74,716            89,376
                                                                                               -------------     -------------
              TOTAL ASSETS                                                                     $     891,524     $     853,829
                                                                                               =============     =============

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
  Short term borrowings                                                                        $       3,624     $       2,358
  Accounts payable                                                                                    51,905            43,430
  Accrued expenses                                                                                    68,947            75,666
  Employee compensation                                                                               29,911            37,941
  Advance payments from customers                                                                     74,665            72,645
  Income taxes payable                                                                                47,306            53,928
  Current portion of long-term debt                                                                    6,600             3,510
                                                                                               -------------     -------------
              TOTAL CURRENT LIABILITIES                                                              282,958           289,478

LONG-TERM DEBT, less current portion                                                                 287,974           329,715

OTHER LIABILITIES                                                                                     41,255            27,986

DEFERRED INCOME TAXES                                                                                  4,825             3,695

COMMITMENTS AND CONTINGENCIES                                                                              -                 -

SHAREHOLDERS' EQUITY:
  Preferred Stock, par value $.01 per share--20,000,000 shares authorized, none issued                     -                 -
  Common Stock, par value $.01 per share--150,000,000 shares authorized,
     92,296,404 and 92,297,404 shares issued; 56,739,848 and 57,491,256 shares
     outstanding at November 23, 2002 and February 23, 2002, respectively (shares adjusted
     to reflect May 2002 two-for-one stock split)                                                        923               461
  Additional paid-in capital                                                                         241,536           234,247
  Equity carryover basis adjustment                                                                   (7,008)           (7,008)
  Accumulated other comprehensive loss                                                               (97,155)         (100,815)
  Retained earnings                                                                                  641,934           542,878
                                                                                               -------------     -------------
                                                                                                     780,230           669,763
  Less cost of 35,556,556 and 34,806,148 shares in treasury at
     November 23, 2002 and February 23, 2002, respectively (shares adjusted to reflect
     May 2002 two-for-one stock split)                                                              (505,718)         (466,808)
                                                                                               -------------     -------------
                                                                                                     274,512           202,955
                                                                                               -------------     -------------
              TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                       $     891,524     $     853,829
                                                                                               =============     =============
</TABLE>

See Notes to Consolidated Financial Statements

                                      -3-
<PAGE>
CONSOLIDATED INCOME STATEMENTS

GTECH HOLDINGS CORPORATION AND SUBSIDIARIES

<TABLE>
<CAPTION>
                                                                   (Unaudited)
                                                                Three Months Ended
                                                           -----------------------------
                                                           November 23,     November 24,
                                                               2002             2001
                                                           ------------     ------------
                                                              (Dollars in thousands,
                                                             except per share amounts)
<S>                                                        <C>              <C>
Revenues:
  Services                                                 $    207,784     $    196,427
  Sales of products                                              48,682           67,152
                                                           ------------     ------------
                                                                256,466          263,579
Costs and expenses:
  Costs of services                                             129,122          138,346
  Costs of sales                                                 39,070           51,147
                                                           ------------     ------------
                                                                168,192          189,493
                                                           ------------     ------------

Gross profit                                                     88,274           74,086

Selling, general and administrative                              24,358           26,692
Research and development                                         10,903            7,980
Goodwill amortization                                                 -            1,493
                                                           ------------     ------------
  Operating expenses                                             35,261           36,165
                                                           ------------     ------------

Operating income                                                 53,013           37,921

Other income (expense):
  Interest income                                                 1,028            1,070
  Equity in earnings of unconsolidated affiliates                 1,406            1,255
  Other income                                                      234              250
  Interest expense                                               (2,728)          (5,624)
                                                           ------------     ------------
                                                                    (60)          (3,049)
                                                           ------------     ------------

Income before income taxes                                       52,953           34,872

Income taxes                                                     20,122           13,251
                                                           ------------     ------------

Net income                                                 $     32,831     $     21,621
                                                           ============     ============

Basic earnings per share                                   $       0.58     $       0.37
                                                           ============     ============

Diluted earnings per share                                 $       0.57     $       0.37
                                                           ============     ============
</TABLE>

See Notes to Consolidated Financial Statements

                                      -4-
<PAGE>
CONSOLIDATED INCOME STATEMENTS

GTECH HOLDINGS CORPORATION AND SUBSIDIARIES

<TABLE>
<CAPTION>
                                                                    (Unaudited)
                                                                 Nine Months Ended
                                                           -----------------------------
                                                           November 23,     November 24,
                                                               2002             2001
                                                           ------------     ------------
                                                              (Dollars in thousands,
                                                             except per share amounts)
<S>                                                        <C>              <C>
Revenues:
  Services                                                 $    643,119     $    616,597
  Sales of products                                              65,717          118,531
                                                           ------------     ------------
                                                                708,836          735,128
Costs and expenses:
  Costs of services                                             402,999          426,430
  Costs of sales                                                 49,426           94,747
                                                           ------------     ------------
                                                                452,425          521,177
                                                           ------------     ------------

Gross profit                                                    256,411          213,951

Selling, general and administrative                              70,168           83,343
Research and development                                         24,575           23,949
Goodwill amortization                                                 -            4,556
                                                           ------------     ------------
  Operating expenses                                             94,743          111,848
                                                           ------------     ------------

Operating income                                                161,668          102,103

Other income (expense):
  Interest income                                                 2,847            4,324
  Equity in earnings of unconsolidated affiliates                 3,363            3,830
  Other income                                                    1,912              743
  Interest expense                                               (8,371)         (18,475)
                                                           ------------     ------------
                                                                   (249)          (9,578)
                                                           ------------     ------------

Income before income taxes                                      161,419           92,525

Income taxes                                                     61,340           35,159
                                                           ------------     ------------

Net income                                                 $    100,079     $     57,366
                                                           ============     ============

Basic earnings per share                                   $       1.75     $       0.96
                                                           ============     ============

Diluted earnings per share                                 $       1.71     $       0.94
                                                           ============     ============
</TABLE>

See Notes to Consolidated Financial Statements

                                      -5-
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS

GTECH HOLDINGS CORPORATION AND SUBSIDIARIES

<TABLE>
<CAPTION>
                                                                                                (Unaudited)
                                                                                             Nine Months Ended
                                                                                       -----------------------------
                                                                                       November 23,     November 24,
                                                                                           2002             2001
                                                                                       ------------     ------------
                                                                                           (Dollars in thousands)
<S>                                                                                    <C>              <C>
OPERATING ACTIVITIES
Net income                                                                             $    100,079     $     57,366
Adjustments to reconcile net income to net cash provided by
  operating activities:
    Depreciation                                                                            101,858          118,483
    Intangibles amortization                                                                  4,051            6,356
    Goodwill amortization                                                                         -            4,556
    Termination of interest rate swaps                                                       11,357                -
    Tax benefit related to stock award plans                                                  7,299                -
    Deferred income taxes provision                                                           1,130                -
    Asset impairment charges                                                                      -            9,313
    Equity in earnings of unconsolidated affiliates, net of dividends received                  559             (588)
    Other                                                                                     4,568           (2,145)
    Changes in operating assets and liabilities:
      Trade accounts receivable                                                              11,723           27,332
      Inventories                                                                            14,944           12,055
      Special charge                                                                           (364)          (6,272)
      Other assets and liabilities                                                           23,760           26,865
                                                                                       ------------     ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES                                                   280,964          253,321

INVESTING ACTIVITIES
Purchases of systems, equipment and other assets relating to contracts                     (131,221)        (146,117)
Investments in and advances to unconsolidated subsidiaries                                        -            3,786
Proceeds from the sale of majority interest in a subsidiary                                       -           10,000
Proceeds from sale of investments                                                                 -            2,098
Other                                                                                        (1,350)          (3,556)
                                                                                       ------------     ------------
NET CASH USED FOR INVESTING ACTIVITIES                                                     (132,571)        (133,789)

FINANCING ACTIVITIES
Net proceeds from issuance of long-term debt                                                      -          186,000
Principal payments on long-term debt                                                        (46,408)        (182,298)
Purchases of treasury stock                                                                 (57,424)        (194,389)
Proceeds from stock options                                                                  15,842           40,968
Tender premiums and fees                                                                     (3,434)               -
Other                                                                                         2,926           (1,056)
                                                                                       ------------     ------------
NET CASH USED FOR FINANCING ACTIVITIES                                                      (88,498)        (150,775)

Effect of exchange rate changes on cash                                                       2,519           (4,272)
                                                                                       ------------     ------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                             62,414          (35,515)

Cash and cash equivalents at beginning of period                                             35,095           46,948
                                                                                       ------------     ------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                                             $     97,509     $     11,433
                                                                                       ============     ============
</TABLE>

See Notes to Consolidated Financial Statements

                                      -6-
<PAGE>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - (Unaudited)

GTECH HOLDINGS CORPORATION AND SUBSIDIARIES

<TABLE>
<CAPTION>
                                                                    Equity      Accumulated
                                                      Additional   Carryover       Other
                                Outstanding   Common    Paid-in      Basis      Comprehensive   Retained     Treasury
                                   Shares      Stock    Capital    Adjustment   Income (Loss)   Earnings      Stock        Total
                                -----------   ------  ----------   ----------   -------------   ---------   ----------   ---------
                                                                     (Dollars in thousands)
<S>                             <C>           <C>     <C>          <C>          <C>             <C>         <C>          <C>
Balance at February 23, 2002     57,491,256   $  461  $  234,247   $   (7,008)  $    (100,815)  $ 542,878   $ (466,808)  $ 202,955

Comprehensive income:
 Net income                               -        -           -            -               -     100,079            -     100,079
 Other comprehensive income
   (loss), net of tax:
  Foreign currency translation,
    net of tax benefits of
    $13 million                           -        -           -            -           4,907           -            -       4,907
  Net loss on derivative
    instruments                           -        -           -            -          (1,143)          -            -      (1,143)
  Unrealized loss on
    investments                           -        -           -            -            (104)          -            -        (104)
                                                                                                                         ---------
Comprehensive income                                                                                                       103,739
Treasury shares purchased        (2,101,100)       -           -            -               -           -      (57,424)    (57,424)
Shares issued under employee
  stock purchase and stock
  award plans                       144,992        -           -            -               -         104        1,997       2,101
Shares issued upon exercise
  of stock options                1,204,700        -         (10)           -               -        (665)      16,517      15,842
Tax benefits related to stock
  award plans                             -        -       7,299            -               -           -            -       7,299
May 2002 two-for-one stock
  split                                   -      462           -            -               -        (462)           -           -
                                -----------   ------  ----------   ----------   -------------   ---------   ----------   ---------
Balance at November 23, 2002     56,739,848   $  923  $  241,536   $   (7,008)  $     (97,155)  $ 641,934   $ (505,718)  $ 274,512
                                ===========   ======  ==========   ==========   =============   =========   ==========   =========
</TABLE>

See Notes to Consolidated Financial Statements

                                      -7-
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

GTECH HOLDINGS CORPORATION AND SUBSIDIARIES

NOTE A - BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements of GTECH Holdings
Corporation, the parent of GTECH Corporation ("GTECH"), have been prepared in
accordance with generally accepted accounting principles ("GAAP") for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. They do not include all of the information and notes required by
GAAP for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the three and nine
month periods ended November 23, 2002 are not necessarily indicative of the
results that may be expected for the full fiscal year ending February 22, 2003.
The balance sheet at February 23, 2002 has been derived from the audited
financial statements at that date. For further information refer to the
Consolidated Financial Statements and footnotes included in our fiscal 2002
Annual Report on Form 10-K.

The terms "Holdings", "the Company", "we", "our", and "us" refer to GTECH
Holdings Corporation and its consolidated subsidiaries, unless otherwise
specified.

Certain amounts in our prior period financial statements have been reclassified
to conform to the current period presentation.

NOTE B - COMMON STOCK SPLIT

In the first quarter of this fiscal year, our Board of Directors approved a
2-for-1 common stock split that was distributed in the form of a stock dividend
on May 23, 2002 to shareholders of record on May 16, 2002. All references to
common shares and per share amounts have been restated to reflect the stock
split for all periods presented.

NOTE C - INVENTORIES

<TABLE>
<CAPTION>
                                             November 23,     February 23,
                                                 2002             2002
                                             ------------     ------------
                                                 (Dollars in thousands)
<S>                                          <C>              <C>
Inventories consist of:
       Raw materials                         $      9,991     $     12,310
       Work in progress                            56,512           72,847
       Finished goods                               5,182            1,472
                                             ------------     ------------
                                             $     71,685     $     86,629
                                             ============     ============
</TABLE>

Inventories include amounts related to our long-term service contracts and
product sales contracts and are stated at the lower of cost (first-in, first-out
method) or market. Work in progress is primarily comprised of inventory related
to product sales contracts, certain of which we are awaiting final customer
acceptance.

                                      -8-
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE D - LONG-TERM DEBT

<TABLE>
<CAPTION>
                                                       November 23,       February 23,
                                                           2002               2002
                                                      --------------     --------------
                                                           (Dollars in thousands)
<S>                                                   <C>                <C>
Long-term debt consists of:
       1.75% Convertible Debentures due 2021          $      175,000     $      175,000
       7.75% Series A Senior Notes due 2004                        -             40,000
       7.87% Series B Senior Notes due 2007                   95,000             95,000
       Interest rate swaps                                    15,602             12,089
       Other                                                   8,972             11,136
                                                      --------------     --------------
                                                             294,574            333,225
       Less current portion                                    6,600              3,510
                                                      --------------     --------------
                                                      $      287,974     $      329,715
                                                      ==============     ==============
</TABLE>

During the third quarter of fiscal 2003, we used cash on hand to repurchase $40
million of our 2004 Series A Senior Notes. In connection with this repurchase,
we paid tender premiums to the holders of the notes and incurred associated fees
totaling $3.4 million. This amount, along with the write-off of $0.1 million of
debt issuance costs, net of $1.2 million in proceeds from the sale, as noted
below, of certain interest rate swaps associated with these notes, are netted
against other income in our Consolidated Income Statements.

During the third quarter of fiscal 2003, we sold $135 million of interest rate
swaps for $13.1 million, the proceeds of which were applied as follows:

<TABLE>
<CAPTION>
                                Sale of interest rate swaps related to:
                             ---------------------------------------------
                              2004 Senior     2007 Senior
                                 Notes           Notes           Total
                             -------------   -------------   -------------
                                       (Dollars in thousands)
<S>                          <C>             <C>             <C>
Long-term debt                 $  ---           $10,023         $10,023
Accounts receivable               364             1,413           1,777
Other income                    1,264               ---           1,264
Interest expense                   70               ---              70
                               ------           -------         -------
                               $1,698           $11,436         $13,134
                               ======           =======         =======
</TABLE>

In accordance with Financial Accounting Standards Board Statement 133, the $10.0
million addition to long-term debt will be amortized as a reduction of interest
expense through the due date of the Series B Senior Notes (May 2007). The $1.8
million applied to accounts receivable represents receivables from banks for
interest rate resets that were effective on May 15, 2002 and August 15, 2002.

We have an unsecured revolving credit facility of $300 million expiring in June
2006 (the "Credit Facility"). There were no outstanding borrowings under the
Credit Facility at November 23, 2002 or February 23, 2002.

NOTE E - INCOME TAXES

Our effective income tax rate is greater than the statutory rate primarily due
to state income taxes and certain expenses that are not deductible for income
tax purposes.

                                      -9-
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE F - COMMITMENTS AND CONTINGENCIES

See "Legal Proceedings" in Part II, Item 1 and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in Part I, Item 2 of
this report.

NOTE G - EARNINGS PER SHARE

The computation of basic and diluted earnings per share is as follows:

<TABLE>
<CAPTION>
                                                    Three Months Ended                  Nine Months Ended
                                               -----------------------------      -----------------------------
                                               November 23,     November 24,      November 23,     November 24,
                                                   2002             2001              2002             2001
                                               ------------     ------------      ------------     ------------
                                                 (Dollars and shares in thousands, except per share amounts)
<S>                                            <C>              <C>               <C>              <C>
Numerator:
       Net income                              $     32,831     $     21,621      $    100,079     $     57,366
                                               ============     ============      ============     ============

Denominator:
       Weighted average shares-Basic                 56,981           57,790            57,252           59,462

Effect of dilutive securities:
       Employee stock options and
         unvested restricted shares                   1,081            1,398             1,277            1,266
                                               ------------     ------------      ------------     ------------
       Weighted average shares-Diluted               58,062           59,188            58,529           60,728
                                               ============     ============      ============     ============

Basic earnings per share                       $        .58     $        .37      $       1.75     $        .96
                                               ============     ============      ============     ============

Diluted earnings per share                     $        .57     $        .37      $       1.71     $        .94
                                               ============     ============      ============     ============
</TABLE>

NOTE H - COMPREHENSIVE INCOME

The components of comprehensive income are as follows:

<TABLE>
<CAPTION>
                                                    Three Months Ended                  Nine Months Ended
                                               -----------------------------      -----------------------------
                                               November 23,     November 24,      November 23,     November 24,
                                                   2002             2001              2002             2001
                                               ------------     ------------      ------------     ------------
                                                                    (Dollars in thousands)
<S>                                            <C>              <C>               <C>              <C>
Net income                                     $     32,831     $     21,621      $    100,079     $     57,366

Other comprehensive income (loss),
  net of tax
   Foreign currency translation                      10,814           (1,598)            4,907          (14,929)
   Net gain (loss) on derivative instruments            129            2,413            (1,143)             281
   Unrealized loss on investments                       (32)              (6)             (104)             (42)
                                               ------------     ------------      ------------     ------------
Comprehensive income                           $     43,742     $     22,430      $    103,739     $     42,676
                                               ============     ============      ============     ============
</TABLE>

                                      -10-
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE I - SEGMENT INFORMATION

We presently have one reportable business segment, the Lottery segment, which
provides online, high speed, highly secure transaction processing systems to the
worldwide lottery industry. Executive management of the Company evaluates
segment performance based on net operating profit after income taxes. The "All
Other" category (as reported below) is comprised of our Transactive subsidiary,
which provides electronic benefit transfer services over our dedicated network
infrastructure. The composition of the "All Other" category for the three months
and nine months ended November 24, 2001 has been revised to include our
IGI/Europrint business unit in the Lottery segment because management considers
it a component of the Lottery segment.

Our business segment data is summarized below:

<TABLE>
<CAPTION>
                                                     Three Months Ended                   Nine Months Ended
                                            ----------------------------------    ---------------------------------
                                              November 23,       November 24,      November 23,       November 24,
                                                  2002               2001              2002               2001
                                            ---------------     --------------    --------------     --------------
                                                                  (Dollars in thousands)
<S>                                         <C>                 <C>               <C>                <C>
Revenues from external sources:
    Lottery                                 $       255,624     $      261,497    $      706,549     $      726,172
    All other                                           842              2,082             2,287              8,956
                                            ---------------     --------------    --------------     --------------
    Consolidated                            $       256,466     $      263,579    $      708,836     $      735,128
                                            ===============     ==============    ==============     ==============

Net operating profit after income taxes:
    Lottery                                 $        34,730     $       25,594    $      105,755     $       71,032
    All other                                           139                431               167                 65
                                            ---------------     --------------    --------------     --------------
    Consolidated                            $        34,869     $       26,025    $      105,922     $       71,097
                                            ===============     ==============    ==============     ==============
</TABLE>

A reconciliation of net operating profit after income taxes to net income as
reported on the Consolidated Income Statements is as follows:

<TABLE>
<CAPTION>
                                                      Three Months Ended                  Nine Months Ended
                                            ----------------------------------    ---------------------------------
                                              November 23,       November 24,      November 23,       November 24,
                                                  2002               2001              2002               2001
                                            ---------------     --------------    --------------     --------------
                                                                    (Dollars in thousands)
<S>                                         <C>                 <C>               <C>                <C>
Net operating profit after income taxes     $        34,869     $       26,025    $      105,922     $       71,097
    Reconciling items, net of tax:
    Interest expense                                 (1,691)            (3,486)           (5,190)           (11,454)
    Other                                              (347)              (918)             (653)            (2,277)
                                            ---------------     --------------    --------------     --------------
       Net income                           $        32,831     $       21,621    $      100,079     $       57,366
                                            ===============     ==============    ==============     ==============
</TABLE>

<TABLE>
<CAPTION>
                                              November 23,        February 23,
                                                  2002                2002
                                            ---------------     --------------
                                                  (Dollars in thousands)
<S>                                         <C>                 <C>
Segment assets:
    Lottery                                 $       887,544     $      848,162
    All other                                         3,980              5,667
                                            ---------------     --------------
    Consolidated                            $       891,524     $      853,829
                                            ===============     ==============
</TABLE>

                                      -11-
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE J - SPECIAL CHARGES

In fiscal 2001, we recorded special charges of $42.3 million in connection with
certain contractual obligations and a value assessment of our business
operations. See Note P to the Consolidated Financial Statements in our fiscal
2002 Annual Report on Form 10-K for further information.

A summary of the special charge activity, which is included in accrued expenses
in our Consolidated Balance Sheets, is as follows:

<TABLE>
<CAPTION>
                                                                       Exit of Certain
                                     Worldwide         Executive           Business
                                     Workforce        Contractual       Strategies and
                                     Reduction        Obligations       Product Lines         Other           Total
                                   -------------     -------------     ---------------     -----------     -----------
                                                                    (Dollars in thousands)
<S>                                <C>               <C>               <C>                 <C>             <C>
Special charges                    $      13,958     $      11,518     $         8,536     $     8,258     $    42,270
Cash expenditures                         (6,032)           (9,965)             (4,140)         (3,289)        (23,426)
Noncash charges                                -                 -              (4,396)         (4,017)         (8,413)
                                   -------------     -------------     ---------------     -----------     -----------
Balance at February 24, 2001               7,926             1,553                   -             952          10,431

Change in estimate                          (438)              (71)                  -             509               -
Cash expenditures                         (5,880)             (678)                  -          (1,437)         (7,995)
                                   -------------     -------------     ---------------     -----------        --------
Balance at February 23, 2002               1,608               804                   -              24           2,436

Cash expenditures                           (140)             (279)                  -              55            (364)
                                   -------------     -------------     ---------------     -----------     -----------
Balance at November 23, 2002       $       1,468     $         525     $             -     $        79     $     2,072
                                   =============     =============     ===============     ===========     ===========
</TABLE>

NOTE K - GOODWILL AND OTHER INTANGIBLE ASSETS

During the first quarter of this fiscal year, we adopted Statement of Financial
Accounting Standards No. 142 ("SFAS 142"), "Goodwill and Other Intangible
Assets", which requires, among other things, that we no longer amortize goodwill
and certain other indefinite-lived intangible assets, but instead test them at
least annually for impairment. In connection with the adoption of the new
standard, we determined that goodwill with a net book value of $1.3 million
(within the Lottery segment) met the standards' intangible asset recognition
criteria. Accordingly, we reclassified this amount into intangible assets and we
will continue to amortize it over its remaining useful life.

                                      -12-
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE K - GOODWILL AND OTHER INTANGIBLE ASSETS (continued)

The following table presents the impact of SFAS 142 on net income and earnings
per share had the standard been in effect for the three and nine month periods
ended November 24, 2001:

<TABLE>
<CAPTION>
                                                         Three                  Nine
                                                     Months Ended           Months Ended
                                                     November 24,           November 24,
                                                         2001                   2001
                                                   ----------------       ----------------
                                                (Dollars in thousands, except per share data)
<S>                                                <C>                     <C>
Net income as reported                             $         21,621       $         57,366
  Add back amortization                                       1,427                  4,282
                                                   ----------------       ----------------
    Adjusted net income                            $         23,048       $         61,648
                                                   ================       ================

Basic earnings per share as reported               $            .37       $            .96
  Add back amortization                                         .03                    .08
                                                   ----------------       ----------------
    Adjusted earnings per share - basic            $            .40       $           1.04
                                                   ================       ================

Diluted earnings per share as reported             $            .37       $            .94
  Add back amortization                                         .02                    .08
                                                   ----------------       ----------------
    Adjusted earnings per share - diluted          $            .39       $           1.02
                                                   ================       ================
</TABLE>

Intangible assets, which are included in other assets in our Consolidated
Balance Sheets, are comprised of the following:

<TABLE>
<CAPTION>
                                                                As of November 23, 2002
                                            --------------------------------------------------------------
                                              Gross Carrying          Accumulated            Net Carrying
                                                  Amount              Amortization              Amount
                                            -----------------         ------------          --------------
                                                                 (Dollars in thousands)
<S>                                         <C>                      <C>                    <C>
Capitalized software                        $          13,255        $        11,517        $        1,738
Other                                                   1,853                    719                 1,134
                                            -----------------         --------------        --------------
     Total intangible assets                $          15,108        $        12,236        $        2,872
                                            =================        ===============        ==============
</TABLE>

<TABLE>
<CAPTION>
                                                                As of February 23, 2002
                                            --------------------------------------------------------------
                                              Gross Carrying          Accumulated            Net Carrying
                                                  Amount              Amortization              Amount
                                            -----------------         ------------          --------------
                                                                (Dollars in thousands)
<S>                                         <C>                       <C>                   <C>
Contract based                              $          22,038         $       20,034        $        2,004
Capitalized software                                   13,255                  9,667                 3,588
Other                                                   1,489                  1,489                     -
                                            -----------------         --------------        --------------
     Total intangible assets                $          36,782         $       31,190        $        5,592
                                            =================         ==============        ==============
</TABLE>

                                      -13-
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE K - GOODWILL AND OTHER INTANGIBLE ASSETS (continued)

A reconciliation of the net carrying amount of intangible assets as of February
23, 2002 to November 23, 2002 is as follows (in thousands):

<TABLE>
<CAPTION>
                                                      Net Carrying
                                                         Amount
                                                     --------------
<S>                                                  <C>
Balance as of February 23, 2002                      $        5,592
Reclassification from goodwill, net                           1,331
Amortization expense                                         (4,051)
                                                     --------------
Balance as of November 23, 2002                      $        2,872
                                                     ==============
</TABLE>

Amortization expense for the nine months ended November 23, 2002 and the fiscal
year ended February 23, 2002 is as follows:

<TABLE>
<CAPTION>
                                             Nine Months Ended     Fiscal Year Ended
                                                November 23,          February 23,
                                                   2002                  2002
                                             ----------------      ----------------
                                                     (Dollars in thousands)
<S>                                          <C>                   <C>
Contract based                               $          2,004      $          4,007
Capitalized software                                    1,850                 4,223
Other                                                     197                   193
                                             ----------------      ----------------
       Total amortization                    $          4,051      $          8,423
                                             ================      ================
</TABLE>

Amortization expense for the next five fiscal years is estimated to be as
follows (in thousands):

<TABLE>
<CAPTION>
  Fiscal          Amortization
   Year              Expense
----------       --------------
<S>              <C>
   2003          $        4,733
   2004                   1,383
   2005                     262
   2006                     262
   2007                     262
</TABLE>

                                      -14-
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE L - NEW ACCOUNTING PRONOUNCEMENTS

In April 2002, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 145 ("SFAS 145"), "Rescission of
FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and
Technical Corrections". Among other things, SFAS 145 rescinds Statement of
Financial Accounting Standards No. 4 ("SFAS 4"), "Reporting Gains and Losses
from Extinguishment of Debt" and eliminates the requirement that gains and
losses from the extinguishment of debt be classified as an extraordinary item,
net of related income tax effects, unless the criteria in Accounting Principles
Board Opinion No. 30, "Reporting the Results of Operations - Reporting the
Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions" are met. We are required to
adopt the standard beginning on February 23, 2003 (the first day of fiscal
2004). We early adopted SFAS 145 on August 25, 2002 (the first day of our fiscal
2003 third quarter) and will reclassify, in the fourth quarter of fiscal 2003,
the $12.5 million ($7.8 million after-tax) extraordinary charge we recorded in
the fourth quarter of the prior fiscal year into other expense in our
Consolidated Income Statements.

In June 2002, the FASB issued Statement of Financial Accounting Standards
No. 146 ("SFAS 146"), "Accounting for Costs Associated With Exit or Disposal
Activities". SFAS 146 nullifies Emerging Issues Task Force Issue No. 94-3 ("EITF
94-3"), "Liability Recognition for Certain Employee Termination Benefits and
Other Costs to Exit an Activity (Including Certain Costs Incurred in a
Restructuring)". SFAS 146 requires that a liability for a cost associated with
an exit or disposal activity be recognized when the liability is incurred.
Therefore, SFAS 146 eliminates the definition and requirements for recognition
of exit costs in EITF 94-3. The provisions of SFAS 146 are effective for exit or
disposal activities that are initiated after December 31, 2002. We do not expect
the adoption of this statement to have a material impact on our consolidated
financial statements.

In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting
and Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others", which requires certain guarantees to be recorded at
fair value as opposed to the current practice of recording a liability only when
a loss is probable and reasonably estimable and also requires a guarantor to
make significant new guaranty disclosures, even when the likelihood of making
any payments under the guarantee is remote. The Interpretation's initial
recognition and initial measurement provisions are applicable on a prospective
basis to guarantees issued or modified after December 31, 2002. We are required
to adopt the disclosure requirements beginning on November 24, 2002 (the first
day of our fiscal 2003 fourth quarter). We are currently evaluating the effects
this Interpretation may have on our consolidated financial statements.

In November 2002, the Emerging Issues Task Force ("EITF") reached a consensus on
EITF Issue No. 00-21, "Multiple-Deliverable Revenue Arrangements", which
provides guidance on how to account for arrangements that may involve the
delivery or performance of multiple products, services, and/or rights to use
assets. The final consensus is applicable to agreements entered into in fiscal
periods beginning after June 15, 2003 with early adoption permitted.
Additionally, companies will be allowed to apply the guidance to all existing
arrangements as the cumulative effect of a change in accounting principle in
accordance with Accounting Principles Board Opinion No. 20, "Accounting
Changes". We are required to adopt the provisions of this EITF beginning on
September 27, 2003 (the first day of our fiscal 2004 third quarter). We are
currently evaluating the effects this EITF may have on our consolidated
financial statements.

                                      -15-
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE M - SUPPLEMENTAL GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION

On December 18, 2001, Holdings (the "Parent Company") issued $175 million
principal amount of 1.75% Convertible Debentures due 2021 (the "Convertible
Debentures"). The Convertible Debentures are unsecured and unsubordinated
obligations of the Parent Company that are jointly and severally, fully and
unconditionally guaranteed by GTECH and two of its wholly-owned subsidiaries:
GTECH Rhode Island Corporation and GTECH Latin America Corporation (collectively
with GTECH, the "Guarantor Subsidiaries"). Condensed consolidating financial
information is presented below.

Selling, general and administrative costs and research and development costs are
allocated to each subsidiary based on the ratio of the subsidiaries combined
service revenue and sales of products to consolidated revenues.

The Parent Company conducts business through its consolidated subsidiaries and
unconsolidated affiliates and has, as its only asset, an investment in GTECH.
Equity in earnings of consolidated affiliates recorded by the Parent Company
includes the Parent Company's 100% share of the after-tax earnings of GTECH.
Taxes payable and deferred income taxes are obligations of the subsidiaries.
Income tax expense related to both current and deferred income taxes are
allocated to each subsidiary based on our consolidated effective income tax
rates.

                                      -16-
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE M - SUPPLEMENTAL GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION
(continued)

Condensed Consolidating Balance Sheets
November 23, 2002

<TABLE>
<CAPTION>
                                              Parent           Guarantor      Non-Guarantor      Eliminating
                                             Company         Subsidiaries     Subsidiaries         Entries         Consolidated
                                          -------------     --------------    -------------     -------------     --------------
                                                                          (Dollars in thousands)
<S>                                       <C>               <C>               <C>               <C>               <C>
Assets
Current Assets:
   Cash and cash equivalents              $           -     $      80,067     $      17,442     $           -     $       97,509
   Trade accounts receivable                          -            62,711            20,104                 -             82,815
   Due from subsidiaries and
     affiliates                                       -            42,879                 -           (42,879)                 -
   Sales-type lease receivables                       -             2,334             2,120                 -              4,454
   Inventories                                        -            46,705            52,813           (27,833)            71,685
   Deferred income taxes                              -            25,264             3,057                 -             28,321
   Other current assets                               -             7,032            11,337                 -             18,369
                                          -------------     -------------     -------------      ------------     --------------
     Total Current Assets                             -           266,992           106,873           (70,712)           303,153

Systems, Equipment and Other
   Assets Relating to Contracts                       -           335,985            87,706           (25,534)           398,157
Investment in Subsidiaries and
   Affiliates                                   274,512            89,660                 -          (364,172)                 -
Goodwill                                              -            70,605            44,893                 -            115,498
Other Assets                                          -            58,395            16,321                 -             74,716
                                          -------------     -------------     -------------     -------------     --------------
     Total Assets                         $     274,512     $     821,637     $     255,793     $    (460,418)    $      891,524
                                          =============     =============     =============     =============     ==============

Liabilities and Shareholders' Equity
Current Liabilities:
   Short term borrowings                  $           -     $           -     $       3,624     $           -     $        3,624
   Accounts payable                                   -            41,781            10,124                 -             51,905
   Due to subsidiaries and affiliates                 -                 -            42,879           (42,879)                 -
   Accrued expenses                                   -            51,894            17,053                 -             68,947
   Employee compensation                              -            24,453             5,458                 -             29,911
   Advance payments from
     customers                                        -            12,876            61,789                 -             74,665
   Income taxes payable                               -            42,353             4,953                 -             47,306
   Current portion of long-term debt                  -             3,524             3,076                 -              6,600
                                          -------------     -------------     -------------     -------------     --------------
     Total Current Liabilities                        -           176,881           148,956           (42,879)           282,958

Long-Term Debt, less current
   portion                                            -           282,078             5,896                 -            287,974
Other Liabilities                                     -            26,052            15,203                 -             41,255
Deferred Income Taxes                                 -             8,747            (3,922)                -              4,825
Shareholders' Equity                            274,512           327,879            89,660          (417,539)           274,512
                                          -------------     -------------     -------------     -------------     --------------
     Total Liabilities and
       Shareholders' Equity               $     274,512     $     821,637     $     255,793     $    (460,418)    $      891,524
                                          =============     =============     =============     =============     ==============
</TABLE>

                                      -17-
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE M - SUPPLEMENTAL GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION
(continued)

Condensed Consolidating Income Statements
Three Months Ended November 23, 2002

<TABLE>
<CAPTION>
                                              Parent           Guarantor      Non-Guarantor      Eliminating
                                             Company         Subsidiaries     Subsidiaries         Entries         Consolidated
                                          -------------     --------------    -------------     -------------     --------------
                                                                          (Dollars in thousands)
<S>                                       <C>               <C>               <C>               <C>               <C>
Revenues:
   Services                               $           -     $     156,069     $      51,715     $           -     $      207,784
   Sales of products                                  -            43,266             5,416                 -             48,682
   Intercompany sales and fees                        -            19,858            11,956           (31,814)                 -
                                          -------------     -------------     -------------     -------------     --------------
                                                      -           219,193            69,087           (31,814)           256,466
Costs and expenses:
   Costs of services                                  -            93,275            38,846            (2,999)           129,122
   Costs of sales                                     -            35,222             3,968              (120)            39,070
   Intercompany cost of sales
     and fees                                         -            14,835             5,739           (20,574)                 -
                                          -------------     -------------     -------------     -------------     --------------
                                                      -           143,332            48,553           (23,693)           168,192
                                          -------------     -------------     -------------     -------------     --------------

Gross profit                                          -            75,861            20,534            (8,121)            88,274

Selling, general & administrative                     -            18,958             5,400                 -             24,358
Research and development                              -             8,421             2,482                 -             10,903
                                          -------------     -------------     -------------     -------------     --------------
     Operating expenses                               -            27,379             7,882                 -             35,261
                                          -------------     -------------     -------------     -------------     --------------

Operating income                                      -            48,482            12,652            (8,121)            53,013

Other income (expense):
     Interest income                                  -               514               514                 -              1,028
     Equity in earnings of
       unconsolidated affiliates                      -               289             1,117                 -              1,406
     Equity in earnings of
       consolidated affiliates                   32,831            10,976                 -           (43,807)                 -
     Other income (expense)                           -            (3,562)            3,796                 -                234
     Interest expense                                 -            (2,351)             (377)                -             (2,728)
                                          -------------     -------------     -------------     -------------     --------------
                                                 32,831             5,866             5,050           (43,807)               (60)
                                          -------------     -------------     -------------     -------------     --------------

Income before income taxes                       32,831            54,348            17,702           (51,928)            52,953

Income taxes                                          -            20,652             6,726            (7,256)            20,122
                                          -------------     -------------     -------------     -------------     --------------

Net income                                $      32,831     $      33,696     $      10,976     $     (44,672)    $       32,831
                                          =============     =============     =============     =============     ==============
</TABLE>

                                      -18-
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE M - SUPPLEMENTAL GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION
(continued)

Condensed Consolidating Income Statements
Nine Months Ended November 23, 2002

<TABLE>
<CAPTION>
                                              Parent           Guarantor      Non-Guarantor      Eliminating
                                             Company         Subsidiaries     Subsidiaries         Entries         Consolidated
                                          -------------     --------------    -------------     -------------     --------------
                                                                          (Dollars in thousands)
<S>                                       <C>               <C>               <C>               <C>               <C>
Revenues:
   Services                               $           -     $     487,222     $     155,897     $           -     $      643,119
   Sales of products                                  -            53,401            12,316                 -             65,717
   Intercompany sales and fees                        -            68,642            36,866          (105,508)                 -
                                          -------------     -------------     -------------     -------------     --------------
                                                      -           609,265           205,079          (105,508)           708,836
Costs and expenses:
   Costs of services                                  -           287,529           123,885            (8,415)           402,999
   Costs of sales                                     -            41,078             8,783              (435)            49,426
   Intercompany cost of sales
     and fees                                         -            43,619            13,026           (56,645)                 -
                                          -------------     -------------     -------------     -------------     --------------
                                                      -           372,226           145,694           (65,495)           452,425
                                          -------------     -------------     -------------     -------------     --------------

Gross profit                                          -           237,039            59,385           (40,013)           256,411

Selling, general & administrative                     -            53,515            16,653                 -             70,168
Research and development                              -            18,738             5,837                 -             24,575
                                          -------------     -------------     -------------     -------------     --------------
     Operating expenses                               -            72,253            22,490                 -             94,743
                                          -------------     -------------     -------------     -------------     --------------

Operating income                                      -           164,786            36,895           (40,013)           161,668

Other income (expense):
     Interest income                                  -             1,263             1,584                 -              2,847
     Equity in earnings of
       unconsolidated affiliates                      -               585             2,778                 -              3,363
     Equity in earnings of
       consolidated affiliates                  100,079            29,206                 -          (129,285)                 -
     Other income (expense)                           -            (5,233)            7,145                 -              1,912
     Interest expense                                 -            (7,075)           (1,296)                -             (8,371)
                                          -------------     -------------     -------------     -------------     --------------
                                                100,079            18,746            10,211          (129,285)              (249)
                                          -------------     -------------     -------------     -------------     --------------

Income before income taxes                      100,079           183,532            47,106          (169,298)           161,419

Income taxes                                          -            69,742            17,900           (26,302)            61,340
                                          -------------     -------------     -------------     -------------     --------------

Net income                                $     100,079     $     113,790     $      29,206     $    (142,996)    $      100,079
                                          =============     =============     =============     =============     ==============
</TABLE>

                                      -19-
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE M - SUPPLEMENTAL GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION
(continued)

Condensed Consolidating Income Statements
Three Months Ended November 24, 2001

<TABLE>
<CAPTION>
                                              Parent           Guarantor      Non-Guarantor      Eliminating
                                             Company         Subsidiaries     Subsidiaries         Entries         Consolidated
                                          -------------     --------------    -------------     -------------     --------------
                                                                          (Dollars in thousands)
<S>                                       <C>               <C>               <C>               <C>               <C>
Revenues:
   Services                               $           -     $     153,573     $      42,854     $           -     $      196,427
   Sales of products                                  -            53,391            13,735                26             67,152
   Intercompany sales and fees                        -            38,283            33,938           (72,221)                 -
                                          -------------     -------------     -------------     -------------     --------------
                                                      -           245,247            90,527           (72,195)           263,579
Costs and expenses:
   Costs of services                                  -            96,676            44,164            (2,494)           138,346
   Costs of sales                                     -            44,529             6,613                 5             51,147
   Intercompany cost of sales
     and fees                                         -            35,486            16,872           (52,358)                 -
                                          -------------     -------------     -------------     -------------     --------------
                                                      -           176,691            67,649           (54,847)           189,493
                                          -------------     -------------     -------------     -------------     --------------

Gross profit                                          -            68,556            22,878           (17,348)            74,086

Selling, general & administrative                     -            21,065             5,627                 -             26,692
Research and development                              -             6,289             1,691                 -              7,980
Goodwill amortization                                 -               632               861                 -              1,493
                                          -------------     -------------     -------------     -------------     --------------
     Operating expenses                               -            27,986             8,179                 -             36,165
                                          -------------     -------------     -------------     -------------     --------------

Operating income                                      -            40,570            14,699           (17,348)            37,921

Other income (expense):
     Interest income                                  -               279               791                 -              1,070
     Equity in earnings of
       unconsolidated affiliates                      -               311               944                 -              1,255
     Equity in earnings of
       consolidated affiliates                   21,621            10,546                 -           (32,167)                 -
     Other income (expense)                           -              (723)              973                 -                250
     Interest expense                                 -            (5,226)             (398)                -             (5,624)
                                          -------------     -------------     -------------     -------------     --------------
                                                 21,621             5,187             2,310           (32,167)            (3,049)
                                          -------------     -------------     -------------     -------------     --------------

Income before income taxes                       21,621            45,757            17,009           (49,515)            34,872

Income taxes                                          -            17,388             6,463           (10,600)            13,251
                                          -------------     -------------     -------------     -------------     --------------

Net income                                $      21,621     $      28,369     $      10,546     $     (38,915)    $       21,621
                                          =============     =============     =============     =============     ==============
</TABLE>

                                      -20-
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE M - SUPPLEMENTAL GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION
(continued)

Condensed Consolidating Income Statements
Nine Months Ended November 24, 2001

<TABLE>
<CAPTION>
                                              Parent           Guarantor      Non-Guarantor      Eliminating
                                             Company         Subsidiaries     Subsidiaries         Entries         Consolidated
                                          -------------     --------------    -------------     -------------     --------------
                                                                          (Dollars in thousands)
<S>                                       <C>               <C>               <C>               <C>               <C>
Revenues:
   Services                               $           -     $     469,721     $     146,876     $           -     $      616,597
   Sales of products                                  -            90,985            27,546                              118,531
   Intercompany sales and fees                        -           100,770            69,408          (170,178)                 -
                                          -------------     -------------     -------------     -------------     --------------
                                                      -           661,476           243,830          (170,178)           735,128
Costs and expenses:
   Costs of services                                  -           299,052           134,704            (7,326)           426,430
   Costs of sales                                     -            79,895            15,158              (306)            94,747
   Intercompany cost of sales
     and fees                                         -            81,609            35,087          (116,696)                 -
                                          -------------     -------------     -------------     --------------    --------------
                                                      -           460,556           184,949          (124,328)           521,177
                                          -------------     -------------     -------------     -------------     --------------

Gross profit                                          -           200,920            58,881           (45,850)           213,951

Selling, general & administrative                     -            63,564            19,779                 -             83,343
Research and development                              -            18,263             5,686                 -             23,949
Goodwill amortization                                 -             1,897             2,659                 -              4,556
                                          -------------     -------------     -------------     -------------     --------------
     Operating expenses                               -            83,724            28,124                 -            111,848
                                          -------------     -------------     -------------     -------------     --------------

Operating income                                      -           117,196            30,757           (45,850)           102,103

Other income (expense):
     Interest income                                  -             1,707             2,617                 -              4,324
     Equity in earnings of
       unconsolidated affiliates                      -               850             2,980                 -              3,830
     Equity in earnings of
       consolidated affiliates                   57,366            25,924                 -           (83,290)                 -
     Other income (expense)                           -            (6,350)            7,093                 -                743
     Interest expense                                 -           (16,841)           (1,634)                -            (18,475)
                                          -------------     -------------     -------------     -------------     --------------
                                                 57,366             5,290            11,056           (83,290)            (9,578)
                                          -------------     -------------     -------------     -------------     --------------

Income before income taxes                       57,366           122,486            41,813          (129,140)            92,525

Income taxes                                          -            46,545            15,889           (27,275)            35,159
                                          -------------     -------------     -------------     -------------     --------------

Net income                                $      57,366     $      75,941     $      25,924     $    (101,865)    $       57,366
                                          =============     =============     =============     =============     ==============
</TABLE>

                                      -21-
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE M - SUPPLEMENTAL GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION
(continued)

Condensed Consolidating Statements of Cash Flows
Nine Months Ended November 23, 2002

<TABLE>
<CAPTION>
                                              Parent           Guarantor      Non-Guarantor      Eliminating
                                             Company         Subsidiaries     Subsidiaries         Entries         Consolidated
                                          -------------     --------------    -------------     -------------     --------------
                                                                          (Dollars in thousands)
<S>                                       <C>               <C>               <C>               <C>               <C>
Net cash provided by operating
   activities                             $           -     $     252,905     $      27,973     $          86     $      280,964

Investing Activities
   Purchases of systems, equipment
     and other assets relating to
     contracts                                        -          (121,396)           (9,739)              (86)          (131,221)
   Other                                              -            (1,350)                -                 -             (1,350)
                                          -------------     -------------     -------------     -------------     --------------
Net cash used for investing
     activities                                       -          (122,746)           (9,739)              (86)          (132,571)

Financing Activities
   Principal payments on long-term
     debt                                             -           (42,989)           (3,419)                -            (46,408)
   Purchases of treasury stock                  (57,424)                -                 -                 -            (57,424)
   Proceeds from stock options                   15,842                 -                 -                 -             15,842
   Tender premiums and fees                           -            (3,434)                -                 -             (3,434)
   Intercompany capital transactions             40,698           (27,647)          (13,051)                -                  -
   Other                                            884              (120)            2,162                 -              2,926
                                          -------------     -------------     -------------     -------------     --------------
Net cash used for financing
     activities                                       -           (74,190)          (14,308)                -            (88,498)

Effect of exchange rate changes
     on cash                                          -            (1,767)            4,286                 -              2,519
                                          -------------     -------------     -------------     -------------     --------------
Increase in cash and
     cash equivalents                                 -            54,202             8,212                 -             62,414
Cash and cash equivalents at
     beginning of period                              -            25,865             9,230                 -             35,095
                                          -------------     -------------     -------------     -------------     --------------
Cash and cash equivalents at end
     of period                            $           -     $      80,067     $      17,442     $           -     $       97,509
                                          =============     =============     =============     =============     ==============
</TABLE>

                                      -22-
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE M - SUPPLEMENTAL GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION
(continued)

Condensed Consolidating Statements of Cash Flows
Nine Months Ended November 24, 2001

<TABLE>
<CAPTION>
                                              Parent           Guarantor      Non-Guarantor      Eliminating
                                             Company         Subsidiaries     Subsidiaries         Entries         Consolidated
                                          -------------     --------------    -------------     -------------     --------------
                                                                          (Dollars in thousands)
<S>                                       <C>               <C>               <C>               <C>               <C>

Net cash provided by operating
   activities                             $           -     $     210,127     $      53,935     $     (10,741)    $      253,321

Investing Activities
   Purchases of systems, equipment
     and other assets relating to
     contracts                                        -          (111,900)          (44,958)           10,741           (146,117)
   Investments in and advances to
     unconsolidated subsidiaries                      -                 -             3,786                 -              3,786
   Proceeds from the sale of majority
     interest in subsidiary                           -            10,000                 -                 -             10,000
   Proceeds from sale of investments                  -                 -             2,098                 -              2,098
   Other                                              -            (2,919)             (637)                -             (3,556)
                                          -------------     -------------     -------------     -------------     --------------
Net cash used for investing
     activities                                       -          (101,033)          (43,497)           10,741           (133,789)

Financing Activities
   Net proceeds from issuance of
     long-term debt                                   -           186,000                 -                 -            186,000
   Principal payments on long-term
     debt                                             -          (178,003)           (4,295)                -           (182,298)
   Purchases of treasury stock                 (194,389)                -                 -                 -           (194,389)
   Proceeds from stock options                   40,968                 -                 -                 -             40,968
   Intercompany capital transactions            151,701          (151,701)                -                 -                  -
   Other                                          1,720            (1,428)           (1,348)                -             (1,056)
                                          -------------     -------------     -------------     -------------     --------------
Net cash used for financing
     activities                                       -          (145,132)           (5,643)                -           (150,775)

Effect of exchange rate changes
     on cash                                          -              (124)           (4,148)                -             (4,272)
                                          -------------     -------------     -------------     -------------     --------------
(Decrease) increase in cash and
     cash equivalents                                 -           (36,162)              647                 -            (35,515)
Cash and cash equivalents at
     beginning of period                              -            37,068             9,880                 -             46,948
                                          -------------     -------------     -------------     -------------     --------------
Cash and cash equivalents at end
     of period                            $           -     $         906     $      10,527     $           -     $       11,433
                                          =============     =============     =============     =============     ==============
</TABLE>

                                      -23-
<PAGE>
Item 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS

The terms "Holdings", "the Company", "we", "our" and "us" refer to GTECH
Holdings Corporation and its consolidated subsidiaries, unless otherwise
specified.

Statements contained in this section and elsewhere in this report which are not
historical statements constitute "forward-looking statements" within the meaning
of Section 27A of the Securities Act and Section 21E of the Securities Exchange
Act of 1934. Generally, the words "believe", "expect", "intend", "estimate",
"anticipate", "project", "will" and similar expressions identify forward-looking
statements. Such statements may include, without limitation, statements relating
to:

    -     the future prospects for and stability of the lottery industry and
          other businesses in which we are engaged or expect to be engaged;

    -     our future operating and financial performance (including, without
          limitation, expected future growth in revenues, profit margins and
          earnings per share);

    -     our ability to retain existing business and to obtain and retain new
          business;

    -     the future performance of comparable investment opportunities; and

    -     the results and effects of legal proceedings and investigations.

Such forward-looking statements reflect management's assessment based on
information currently available, but are not guarantees and are subject to risks
and uncertainties that could cause actual results to differ materially from
results contemplated in the forward-looking statements. These risks and
uncertainties include the following:

    -     governmental regulations and other actions affecting the online
          lottery industry could have a negative effect on our business;

    -     our lottery operations are dependent upon our continued ability to
          retain and extend our existing contracts (including with respect to
          several of our significant online lottery service contracts which are
          the subject of competitive procurement procedures over the next
          several months) and win new contracts;

    -     slow growth or declines in sales of online lottery goods and services
          could adversely affect our future revenues and profitability;

    -     we have significant foreign exchange exposure;

    -     we are subject to the economic, political and social instability risks
          of doing business in foreign jurisdictions;

    -     we have a concentrated customer base, and the loss of any of our
          larger customers could harm our results;

    -     our quarterly operating results may fluctuate significantly;

    -     we operate in a highly competitive environment;

    -     we are subject to substantial penalties for failure to perform under
          our contracts;

    -     we may not be able to respond to technological changes or satisfy
          future technological demands of our customers;

    -     expansion of the gaming industry faces opposition which may limit the
          legalization, or expansion, of online gaming to the detriment of our
          business, financial condition, results and prospects;

    -     our business prospects and future success depend upon our ability to
          attract and retain qualified employees;

    -     we may be subject to adverse determinations in pending legal
          proceedings; and

                                      -24-
<PAGE>
    -     other risks and uncertainties set forth below and elsewhere in this
          report, in our fiscal 2002 Form 10-K, and in our subsequent press
          releases and Form 10-Q's and other reports and filings with the
          Securities and Exchange Commission.

The foregoing list of important factors is not all-inclusive.

General

We operate on a 52- to 53-week fiscal year ending on the last Saturday in
February and fiscal 2003 ends on February 22, 2003. Fiscal 2004 is a 53-week
year and we will include the extra week in our fourth quarter ending February
28, 2004.

We have derived substantially all of our revenues from the rendering of services
and the sale or supply of computerized online lottery systems and components to
government-authorized lotteries. Our service revenues are derived primarily from
lottery service contracts which are typically at least five years in duration,
and generally provide compensation to us based upon a percentage of a lottery's
gross online lottery sales. These percentages vary depending on the size of the
lottery and the scope of services provided to the lottery. We derive product
sale revenues primarily from the installation of new online lottery systems,
installation of new software and sales of lottery terminals and equipment in
connection with the expansion of existing lottery systems. Our product margins
fluctuate depending on the mix, volume and timing of product sales contracts.
The size and timing of these transactions have resulted in variability in
product sale revenues from period to period. We currently anticipate that
product sales during fiscal 2003 will be in a range of $100 million to $110
million.

We continue to evaluate a variety of opportunities to broaden our offerings of
high-volume transaction processing services outside of our core business of
providing online lottery services, such as the processing and transmitting of
commercial, non-lottery transactions including bill payments, electronic tax
payments, utility payments and retail-based programs such as gift cards.
Currently, our networks in Brazil and Chile process bill payments and other
commercial service transactions. In the near term, we expect to concentrate our
efforts to grow commercial services revenues in Brazil, Poland and Mexico. While
our goal is to leverage our technology, infrastructure and relationships to
drive growth in our commercial services, if, in the course of pursuing these
opportunities, we see a chance to gain access to certain markets through the
acquisition of existing infrastructure, we may consider making such
acquisitions.

Our business is highly regulated, and the competition to secure new government
contracts is often intense. From time to time, competitors challenge our
contract awards and there have been and may continue to be investigations of
various types, including grand jury investigations, conducted by governmental
authorities into possible improprieties and wrongdoing in connection with
efforts to obtain and/or the awarding of lottery contracts and related matters.
In light of the fact that such investigations frequently are conducted in
secret, we would not necessarily know of the existence of an investigation that
might involve us. Because our reputation for integrity is an important factor in
our business dealings with lottery and other government agencies, if government
authorities made an allegation of, or if there was a finding of improper conduct
on our part in any matter, such an allegation or finding could have a material
adverse effect on our business, including our ability to retain existing
contracts and to obtain new or renewal contracts. In addition, continuing
adverse publicity resulting from these investigations and related matters could
have such a material adverse effect. See "Legal Proceedings" in Part II, Item 1
in this report; and Part I, Item 1 - "Certain Factors That May Affect Future
Performance - Government regulations and other actions affecting the online
lottery industry could have a negative effect on the Company's business", Part
I, Item 3 - "Legal Proceedings" and Note F to the Consolidated Financial
Statements in our fiscal 2002 Annual Report on Form 10-K, for further
information concerning these matters and other contingencies.

                                      -25-
<PAGE>
We are a global business and we derive a substantial portion of our revenues
from operations outside of the United States. In particular, in fiscal 2002, we
derived approximately 51% of our revenues from international operations and
11.5% of our revenues from our Brazilian operations alone (including 10.7% of
our revenues from the National Lottery of Brazil, one of our largest customers).
In addition, a substantial portion of our assets, primarily consisting of
equipment we use to operate online lottery systems for our customers, are held
outside of the United States.

Significant Contract Rebids

A majority of our revenues and cash flow is derived from our portfolio of
long-term online lottery services contracts, each of which in the ordinary
course of our business is periodically the subject of competitive procurement or
renegotiation. Through fiscal 2003 (which ends in February 2003), the National
Lottery of Brazil, our second largest contract in fiscal 2002 (based on annual
revenues), will be the subject of a competitive procurement to select
contractors to supply lottery goods and services upon the termination of our
current contract.

Upon the expiration of our current contract, Caixa Economica Federal ("CEF"),
the operator of Brazil's National Lottery, will attempt to handle internally
some non-lottery operations that we currently perform under our contract and,
with regard to the remaining lottery operations, is seeking to proceed with a
competitive procurement process calculated to result in multiple vendors to
administer Brazil's National Lottery, which is presently administered solely by
us. On July 24, 2002, CEF published four Requests for Proposals in connection
with this procurement process, the validity of which we are challenging in
court. See Part II, Item 1 - "Legal Proceedings". CEF has indicated that it
plans to request that we extend the term of our current contract with CEF, which
is scheduled to end in January 2003, for an additional six months.

The California lottery contract, which was our fourth largest contract in fiscal
2002 (based on annual revenues), expires in October 2003. On October 4, 2002,
following a competitive procurement process, we entered into a facilities
management agreement to provide online lottery technology, equipment and
services to the California Lottery for a period of six years beginning on
October 14, 2003, with four additional one year options to extend the agreement
at the discretion of the California Lottery. After the exercise of any extension
options, the agreement will remain in effect until either party gives notice of
termination at least two years in advance.

In addition, the Georgia lottery contract, which was our fifth largest contract
in fiscal 2002 (based on annual revenues), expires in September 2003. On
November 15, 2002, following a competitive bidding process, we were awarded a
contract by the Georgia Lottery Corporation to provide equipment for an online
gaming system and related services, including a new wireless telecommunications
network, for a seven-year period which is expected to commence on September 10,
2003.

Critical Accounting Policies

In December 2001, the Securities and Exchange Commission issued advice regarding
disclosure of critical accounting policies. In response to this advice, we have
identified the accounting policies listed below that we believe are most
critical to our financial condition and results of operations, and that require
management's most difficult, subjective and complex judgments in estimating the
effect of inherent uncertainties. This section should be read in conjunction
with Note A to the Consolidated Financial Statements in our fiscal 2002 Annual
Report on Form 10-K, which includes other significant accounting policies.

                                      -26-
<PAGE>
REVENUE RECOGNITION

We recognize service revenues as the services are performed. Liquidated damages
(which equaled 0.40% of our total revenues in the first nine months of fiscal
2003 and 0.14%, 0.47% and 0.56% of our total revenues in fiscal 2002, 2001 and
2000, respectively) are recorded as a reduction in revenue in the period when
they are determined to be probable and estimable. Revenues from product sales or
sales-type leases are recognized when installation is complete and the customer
accepts the product (when acceptance is a stipulated contractual term). In those
instances where we are not responsible for installation, revenue is recognized
when the product is shipped. Amounts received from customers in advance of
revenue recognition are recorded in advance payments from customers in our
Consolidated Balance Sheets.

Generally, we record product sales under long-term contracts over the
contractual period under the percentage of completion method of accounting.
Under the percentage of completion method of accounting, sales and estimated
gross profit are recognized as work is completed and accepted by the customer
and are adjusted prospectively for revisions in estimated total contract costs
in the period when the information necessary to make the adjustment becomes
available. Provision for contract losses are made when the loss is known and
quantifiable. The completed contract method of accounting is used for long-term
contracts whenever we cannot estimate the costs to complete the delivery or when
the contract stipulates the entire balance due under the contract is refundable
if the customer does not accept the product. Under the completed contract method
of accounting, product sales are recorded when we have substantially completed
our obligations under the contract.

RECEIVABLES AND INVENTORY RESERVES

We evaluate the collectibility of trade accounts and sales-type lease
receivables on a customer-by-customer basis and we believe our reserves are
adequate; however, if economic circumstances change significantly resulting in a
major customer's inability to meet its financial obligations to us, original
estimates of the recoverability of amounts due to us could be reduced by
significant amounts requiring additional reserves.

Inventories include amounts related to our long-term service contracts and
product sales contracts, including product sales under long-term contracts, and
are stated at the lower of cost (first-in, first-out method) or market. We make
provisions for potentially obsolete or slow-moving inventory based on
management's analysis of inventory levels and future sales forecasts. We believe
our reserves are adequate; however, should future sales forecasts change, our
original estimates of obsolescence could increase by a significant amount
requiring additional reserves.

IMPAIRMENT OF GOODWILL AND OTHER INTANGIBLE AND LONG-LIVED ASSETS

We periodically evaluate the recoverability of goodwill and other intangible and
long-lived assets whenever events or changes in circumstances, such as declines
in revenues, earnings or cash flows or material adverse changes in the economic
stability of a particular country indicate that the carrying amount of an asset
may not be recoverable. We would write-down our long-lived assets to fair value,
calculated using future undiscounted cash flows, if facts and circumstances
indicated that they were impaired.

                                      -27-
<PAGE>
Effect of New Accounting Pronouncements

During the first quarter of this fiscal year, we adopted Statement of Financial
Accounting Standards No. 142 ("SFAS 142"), "Goodwill and Other Intangible
Assets", which requires, among other things, that we no longer amortize goodwill
and certain other indefinite-lived intangible assets, but instead test them at
least annually for impairment. In connection with the adoption of the new
standard, we determined that goodwill with a net book value of $1.3 million
(within the Lottery segment) met the standards' intangible asset recognition
criteria. Accordingly, we reclassified this amount into intangible assets and we
will continue to amortize it over its remaining useful life. Prior year net
income and diluted earnings per share for the nine-months ended November 24,
2001, excluding amortization of goodwill, was $61.6 million, or $1.02 per
diluted share.

In April 2002, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 145 ("SFAS 145"), "Rescission of
FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and
Technical Corrections". Among other things, SFAS 145 rescinds Statement of
Financial Accounting Standards No. 4 ("SFAS 4"), "Reporting Gains and Losses
from Extinguishment of Debt" and eliminates the requirement that gains and
losses from the extinguishment of debt be classified as an extraordinary item,
net of related income tax effects, unless the criteria in Accounting Principles
Board Opinion No. 30, "Reporting the Results of Operations - Reporting the
Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions" are met. We are required to
adopt the standard beginning on February 23, 2003 (the first day of fiscal
2004). We early adopted SFAS 145 on August 25, 2002 (the first day of our fiscal
2003 third quarter) and will reclassify, in the fourth quarter of fiscal 2003,
the $12.5 million ($7.8 million after-tax) extraordinary charge we recorded in
the fourth quarter of the prior fiscal year into other expense in our
Consolidated Income Statements.

In June 2002, the FASB issued Statement of Financial Accounting Standards No.
146 ("SFAS 146"), "Accounting for Costs Associated With Exit or Disposal
Activities". SFAS 146 nullifies Emerging Issues Task Force Issue No. 94-3 ("EITF
94-3"), "Liability Recognition for Certain Employee Termination Benefits and
Other Costs to Exit an Activity (Including Certain Costs Incurred in a
Restructuring)". SFAS 146 requires that a liability for a cost associated with
an exit or disposal activity be recognized when the liability is incurred.
Therefore, SFAS 146 eliminates the definition and requirements for recognition
of exit costs in EITF 94-3. The provisions of SFAS 146 are effective for exit or
disposal activities that are initiated after December 31, 2002. We do not expect
the adoption of this statement to have a material impact on our consolidated
financial statements.

In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting
and Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others", which requires certain guarantees to be recorded at
fair value as opposed to the current practice of recording a liability only when
a loss is probable and reasonably estimable and also requires a guarantor to
make significant new guaranty disclosures, even when the likelihood of making
any payments under the guarantee is remote. The Interpretation's initial
recognition and initial measurement provisions are applicable on a prospective
basis to guarantees issued or modified after December 31, 2002. We are required
to adopt the disclosure requirements beginning on November 24, 2002 (the first
day of our fiscal 2003 fourth quarter). We are currently evaluating the effects
this Interpretation may have on our consolidated financial statements.

In November 2002, the Emerging Issues Task Force ("EITF") reached a consensus on
EITF Issue No. 00-21, "Multiple-Deliverable Revenue Arrangements", which
provides guidance on how to account for arrangements that may involve the
delivery or performance of multiple products, services, and/or rights to use
assets. The final consensus is applicable to agreements entered into in fiscal
periods beginning after June 15, 2003 with early adoption permitted.
Additionally, companies will be allowed to apply the

                                      -28-
<PAGE>
guidance to all existing arrangements as the cumulative effect of a change in
accounting principle in accordance with Accounting Principles Board Opinion No.
20, "Accounting Changes". We are required to adopt the provisions of this EITF
beginning on September 27, 2003 (the first day of our fiscal 2004 third
quarter). We are currently evaluating the effects this EITF may have on our
consolidated financial statements.

Results of Operations

Three months ended November 23, 2002 versus Three months ended November 24, 2001

Revenues were $256.5 million in the third quarter of fiscal 2003, compared to
$263.6 million in the third quarter of fiscal 2002, down $7.1 million, or 2.7%.

The following discussion on service revenues should be read in conjunction with
the table below:

<TABLE>
<CAPTION>
                                               Three Months Ended
                                   ---------------------------------------------
                                                                      Change
                                   November 23,   November 24,  ----------------
Service revenues                      2002           2001          $         %
----------------                   -----------    ----------    -------    -----
<S>                                <C>            <C>           <C>        <C>
Domestic                           $     116.2    $    112.0    $   4.2      3.8
International                             90.8          82.3        8.5     10.4
Other                                      0.8           2.1       (1.3)   (65.9)
                                   -----------    ----------    -------    -----
                                   $     207.8    $    196.4    $  11.4      5.8
                                   ===========    ==========    =======    =====
</TABLE>

Service revenues, including lottery and other services, were $207.8 million in
the third quarter of fiscal 2003, compared to $196.4 million in the third
quarter of fiscal 2002, up $11.4 million, or 5.8%. This increase was primarily
driven by an $8.5 million increase in international lottery service revenues and
a $4.2 million increase in domestic lottery services revenues, partially offset
by the expiration of certain electronic benefit transfer contracts. Had last
year's average exchange rates prevailed throughout the most recent quarter, we
estimate that service revenues would have increased by approximately 10%
compared to the third quarter of last year.

Our international lottery service revenues were $90.8 million in the third
quarter of fiscal 2003, compared to $82.3 million in the third quarter of fiscal
2002, up $8.5 million, or 10.4%. This increase was primarily driven by several
new international contracts, along with higher service revenues from Colombia.
These positive factors were partially offset by lower service revenues from the
weakening of the Brazilian real against the U.S. dollar. International lottery
service revenues in the third quarter of fiscal 2003 include approximately $10.2
million from commercial transaction processing services, (primarily in Brazil),
which on a constant currency basis increased approximately 19% over the third
quarter of the prior year.

Our domestic lottery service revenues were $116.2 million in the third quarter
of fiscal 2003, compared to $112.0 million in the third quarter of fiscal 2002,
up $4.2 million, or 3.8%. This increase was primarily due to same store sales
growth of approximately 7% and the impact of new contract wins, partially offset
by contractual rate changes.

Product sales were $48.7 million in the third quarter of fiscal 2003, compared
to $67.2 million in the third quarter of fiscal 2002, down $18.5 million, or
27.5%. Product sales in the third quarter of the prior year included sales of
terminals and software to our customer in the United Kingdom, which were
partially offset by sales in the third quarter of the current fiscal year of a
turnkey system to our customer in France and terminals to our customer in Spain.

                                      -29-
<PAGE>
Our service margins improved from 29.6% in the third quarter of fiscal 2002 to
37.9% in the third quarter of fiscal 2003, primarily driven by new contracts
that generated incrementally higher gross margins, lower depreciation
(principally related to contract extensions and fully depreciated assets
associated with existing contracts), and improved operational and service
delivery efficiencies.

Our product margins fluctuate depending on the mix, volume and timing of product
sales contracts. Product sale margins declined to 19.7% in the third quarter of
fiscal 2003 compared to 23.8% in the third quarter of last year, reflecting
sales of a turnkey system to our customer in France and terminals to our
customer in Spain, partially offset by the absence of inventory reserves
recorded in the prior fiscal year in connection with a product sale contract
with a customer in Italy.

Operating expenses were $35.3 million in the third quarter of fiscal 2003,
compared to $36.2 million in the third quarter of fiscal 2002, down $0.9
million, or 2.5%. This decrease was primarily driven by our continued execution
of cost savings initiatives and emphasis on improving operating efficiencies,
along with the benefit of the adoption of the new accounting standard on
goodwill, which eliminated approximately $1.4 million of goodwill amortization
in the third quarter of the current year. These declines in operating expenses
were partially offset by increased spending on research and development in an
effort to accelerate deployment of Enterprise Series (our open platform based
lottery management system) in the marketplace. As a percentage of revenues,
operating expenses were 13.7% and 13.7% (13.2% in the third quarter of the prior
year adjusted for the change in goodwill accounting) during the third quarters
of fiscal 2003 and 2002, respectively.

Other income was $0.2 million and $0.3 million in the third quarters of fiscal
2003 and fiscal 2002, respectively. The components of other income are as
follows (in millions):

<TABLE>
<CAPTION>
                                                                                Three Months Ended
                                                                            ---------------------------
                                                                            November 23,   November 24,
                                                                                2002           2001
                                                                            ------------   ------------
<S>                                                                         <C>            <C>
Foreign exchange gains (losses)                                             $       2.8    $       (0.7)
Tender premiums and fees associated with the early retirement
   of our 2004 Senior Notes, net of $1.2 million in proceeds from the
   sale of certain interest rate swaps associated with these notes                 (2.3)              -
Amortization of the gain on the 1998 sale of our 22.5% equity
   interest in Camelot Group plc                                                      -             0.7
Other                                                                              (0.3)            0.3
                                                                            -----------    ------------
   Total other income                                                       $       0.2    $        0.3
                                                                            ===========    ============
</TABLE>

Interest expense was $2.7 million in the third quarter of fiscal 2003, compared
to $5.6 million in the third quarter of fiscal 2002, down $2.9 million, or
51.5%. This decrease was primarily due to our debt restructuring in the fourth
quarter of last fiscal year and the third quarter of this fiscal year, resulting
in lower debt balances and lower interest rates. In the fourth quarter of the
prior fiscal year, we issued $175 million principal amount of 1.75% Convertible
Debentures. We used a portion of the proceeds from the Convertible Debentures to
retire $55 million of 7.87% Senior Notes and $110 million of 7.75% Senior Notes
in the fourth quarter of fiscal 2002 and we used cash on hand to retire $40
million of 7.75% Senior Notes in the third quarter of fiscal 2003.

Weighted average diluted shares in the third quarter of fiscal 2003 declined 1.1
million shares to 58.1 million shares as a result of our share repurchase
programs, resulting in an improvement to diluted earnings per share of $0.02.

                                      -30-
<PAGE>
Nine months ended November 23, 2002 versus Nine months ended November 24, 2001

Revenues were $708.8 million in the first nine months of fiscal 2003, compared
to $735.1 million in the first nine months of fiscal 2002, down $26.3 million,
or 3.6%.

The following discussion on service revenues should be read in conjunction with
the table below:

<TABLE>
<CAPTION>
                                                     Nine Months Ended
                                    ---------------------------------------------------
                                                                           Change
                                    November 23,     November 24,    ------------------
Service revenues                        2002             2001           $           %
----------------                    ------------     ------------    --------     -----
<S>                                 <C>              <C>             <C>          <C>
Domestic                            $      363.1     $      357.4    $    5.7       1.6
International                              277.9            250.4        27.5      11.0
Other                                        2.1              8.8        (6.7)    (76.1)
                                    ------------     ------------    --------     -----
                                    $      643.1     $      616.6    $   26.5       4.3
                                    ============     ============    ========     =====
</TABLE>

Service revenues, including lottery and other services, were $643.1 million in
the first nine months of fiscal 2003, compared to $616.6 million in the first
nine months of fiscal 2002, up $26.5 million, or 4.3%. This increase was
primarily driven by a $27.5 million increase in international lottery service
revenues and a $5.7 million increase in domestic lottery services revenues,
partially offset by the expiration of certain electronic benefit transfer
contracts. Had last year's average exchange rates prevailed throughout the first
nine months of this fiscal year, we estimate that service revenues would have
increased by approximately 6.6% compared to the same period last year.

Our international lottery service revenues were $277.9 million in the first nine
months of fiscal 2003, compared to $250.4 million in the first nine months of
fiscal 2002, up $27.5 million, or 11.0%. This increase was primarily driven by
several new international contracts, along with higher service revenues from
Colombia. These positive factors were partially offset by lower service revenues
from the weakening of the Brazilian real against the U.S. dollar.

Our domestic lottery service revenues were $363.1 million in the first nine
months of fiscal 2003, compared to $357.4 million in the first nine months of
fiscal 2002, up $5.7 million, or 1.6%. This increase was primarily due to higher
lottery sales generated by a number of our existing domestic customers,
including Texas and New York, partially offset by lower jackpot activity in the
Powerball states and contractual rate changes.

Product sales were $65.7 million in the first nine months of fiscal 2003,
compared to $118.5 million in the first nine months of fiscal 2002, down $52.8
million, or 44.6%. Prior year product sales included one-time sales of terminals
and software to our customer in the United Kingdom, which were partially offset
by sales in the third quarter of the current fiscal year of a turnkey system to
our customer in France and terminals to our customer in Spain.

Our service margins improved from 30.8% in the first nine months of fiscal 2002
to 37.3% in the first nine months of fiscal 2003, primarily driven by new
contracts that generated incrementally higher gross margins, lower depreciation
(principally related to contract extensions and fully depreciated assets
associated with existing contracts), and improved operational and service
delivery efficiencies.

Product margins improved to 24.8% in the first nine months of fiscal 2003
compared to 20.1% in the first nine months of last year, primarily due to the
absence of prior year inventory reserves recorded in connection with a product
sale contract with a customer in Italy, partially offset by lower margins
associated with sales of a turnkey system to our customer in France and
terminals to our customer in Spain, which were recorded in the current fiscal
year.

                                      -31-
<PAGE>
Operating expenses were $94.7 million in the first nine months of fiscal 2003,
compared to $111.8 million in the first nine months of fiscal 2002, down $17.1
million, or 15.3%. This decrease was primarily driven by our continued execution
of cost savings initiatives and emphasis on improving operating efficiencies. We
also benefited from the adoption of the new accounting standard on goodwill,
which eliminated approximately $4.3 million of goodwill amortization in the
first nine months of the current year. These declines in operating expenses were
partially offset by the cost of contractual obligations associated with the
departure in August 2002 of our former President and Chief Executive Officer. As
a percentage of revenues, operating expenses were 13.4% and 15.2% (14.6%
adjusted for the change in goodwill accounting) during the first nine months of
fiscal 2003 and 2002, respectively.

Other income was $1.9 million and $0.7 million in the first nine months of
fiscal 2003 and fiscal 2002, respectively. The components of other income are as
follows (in millions):

<TABLE>
<CAPTION>
                                                                                    Nine Months Ended
                                                                             --------------------------------
                                                                             November 23,        November 24,
                                                                                 2002                2001
                                                                             ------------        ------------
<S>                                                                          <C>                 <C>
Foreign exchange gains                                                       $        5.4        $        1.1
Tender premiums and fees associated with the early retirement
   of our 2004 Senior Notes, net of $1.2 million in proceeds from the
   sale of certain interest rate swaps associated with these notes                   (2.3)                  -
Gain on the sale of a majority interest in our subsidiary in the
   Czech Republic                                                                       -                 3.9
Amortization of the gain on the 1998 sale of our 22.5% equity
   interest in Camelot Group plc                                                        -                 5.0
Write-off of our cost method investment in the common stock of an
   Internet security developer                                                          -                (9.3)
Other                                                                                (1.2)                  -
                                                                             ------------        ------------
   Total other income                                                        $        1.9        $        0.7
                                                                             ============        ============
</TABLE>

Interest expense was $8.4 million in the first nine months of fiscal 2003,
compared to $18.5 million in the first nine months of fiscal 2002, down $10.1
million, or 54.7%. This decrease was primarily due to our debt restructuring in
the fourth quarter of last fiscal year and the third quarter of this fiscal
year, resulting in lower debt balances and lower interest rates. In the fourth
quarter of the prior fiscal year, we issued $175 million principal amount of
1.75% Convertible Debentures. We used a portion of the proceeds from the
Convertible Debentures to retire $55 million of 7.87% Senior Notes and $110
million of 7.75% Senior Notes in the fourth quarter of fiscal 2002 and we used
cash on hand to retire $40 million of 7.75% Senior Notes in the third quarter of
fiscal 2003.

Weighted average diluted shares in the first nine months of fiscal 2003 declined
1.1 million shares to 58.1 million shares as a result of our share repurchase
programs, resulting in an improvement to diluted earnings per share of $0.06.

                                      -32-
<PAGE>
Third Quarter and Recent Developments

We have a 44% interest in Lottery Technology Services Investment Corporation
("LTSIC"), which is accounted for using the equity method. LTSIC's wholly owned
subsidiary, Lottery Technology Services Corporation ("LTSC"), provides equipment
and services, (which we supplied to LTSC), to the Bank of Taipei, who holds the
license to operate the Taiwan Public Welfare Lottery (the "Lottery").

In November 2002, the Lottery announced a voluntary recall of previously issued
instant tickets distributed by LTSC, in response to concerns about potential
operational and technical issues related to the instant ticket games. A small
portion of the tickets in the field were returned by the retail agents before
new tickets were issued and made available for play on November 22, 2002. We
have conducted a thorough review of all instant ticket game design, distribution
and sales techniques across the jurisdictions we serve. We believe the issues
addressed in Taiwan were the product of unique circumstances that are not
present in other jurisdictions.

On December 5, 2002, after the close of our fiscal 2003 third quarter, we
announced that our Board of Directors authorized a new open market share
repurchase program for up to an aggregate of $100 million of our outstanding
common stock through March 31, 2004. This new program is in addition to the
unused capacity of approximately $2 million remaining in our existing program,
which is scheduled to expire in February 2003. We plan to periodically
repurchase the shares in the open market based on market conditions and
corporate considerations.

Changes in Financial Position, Liquidity and Capital Resources

During the first nine months of fiscal 2003, we generated $281 million of cash
from operations, which we used to purchase $131.2 million of systems, equipment
and other assets relating to contracts, to repurchase $57.4 million of our
common stock and to early retire $40 million of Senior Notes. At November 23,
2002, we had $97.5 million of cash and cash equivalents on hand, of which
approximately 84% was invested with two financial institutions. At the end of
the fiscal 2003 third quarter, we had no borrowings under our $300 million
credit facility.

Trade accounts receivable decreased by $17.6 million, from $100.4 million at
February 23, 2002 to $82.8 million at November 23, 2002, primarily due to
collections related to product sales we recorded in the prior fiscal year, along
with the collection of certain domestic service receivables.

Inventories decreased by $14.9 million, from $86.6 million at February 23, 2002
to $71.7 million at November 23, 2002, primarily due to the recording of product
sales in the third quarter of this fiscal year of a turnkey system to our
customer in France and terminals to our customer in Spain, partially offset by
spending related to product sales expected to be delivered during fiscal 2004.

Other current assets decreased by $4.3 million, from $22.7 million at February
23, 2002 to $18.4 million at November 23, 2002. The February 23, 2002 balance
included $5.9 million of prepaid inventory that was shipped to us during the
first half of this fiscal year.

Other assets decreased by $14.7 million, from $89.4 million at February 23, 2002
to $74.7 million at November 23, 2002, primarily due to the sale of interest
rate swaps in the third quarter of this fiscal year.

Accounts payable increased by $8.5 million, from $43.4 million at February 23,
2002 to $51.9 million at November 23, 2002, primarily due to the timing of
payments related to ongoing lottery system installations.

                                      -33-
<PAGE>
Accrued expenses decreased by $6.8 million, from $75.7 million at February 23,
2002 to $68.9 million at November 23, 2002, primarily due to the payment of
costs accrued in connection with cost savings initiatives and operating
efficiency programs.

Employee compensation decreased by $8.0 million, from $37.9 million at February
23, 2002 to $29.9 million at November 23, 2002, primarily due to the payment of
fiscal 2002 management incentive compensation and employee profit sharing.

Income taxes payable decreased by $6.6 million, from $53.9 million at February
23, 2002 to $47.3 million at November 23, 2002, primarily due to tax benefits
related to foreign currency translation and stock award plans which were
recorded through other comprehensive income, partially offset by the timing of
income tax payments.

Other liabilities increased by $13.3 million, from $28.0 million at February 23,
2002 to $41.3 million at November 23, 2002, primarily due to the deferral of
revenue related to our joint venture in Taiwan. See "Guarantees" below and Note
K to the Consolidated Financial Statements in our fiscal 2002 Annual Report on
Form 10-K for further information.

Our business is capital-intensive. Although it is not possible to estimate
precisely, we currently anticipate that net cash used for investing activities
in fiscal 2003 will be in a range of $170 million to $180 million. We expect our
principal sources of liquidity to be existing cash balances, along with cash
generated from operations and borrowings under our credit facility. Our credit
facility provides for an unsecured revolving line of credit of $300 million and
matures in June 2006. As of November 23, 2002, there were no borrowings under
the credit facility. We currently expect that our cash flow from operations and
available borrowings under our credit facility will be sufficient for the
foreseeable future to fund our anticipated working capital and ordinary capital
expenditure needs, to service our debt obligations, to fund anticipated internal
growth, to fund potential acquisitions and to repurchase shares of our common
stock, from time to time, under our share repurchase programs.

Off-Balance Sheet Arrangements

We have a 50% limited partnership interest in West Greenwich Technology
Associates, L.P. (the "Partnership"), which owns our World Headquarters
facilities and leases them to us. The general partner of the Partnership is an
unrelated third party. We account for the Partnership using the equity method.
The following is a summary of certain unaudited financial information of the
Partnership, along with the results of operations at November 23, 2002, used as
the basis for applying the equity method of accounting (in thousands):

<TABLE>
<CAPTION>
                                  (Unaudited)
                                  -----------
<S>                               <C>
NOVEMBER 23, 2002
EARNINGS DATA:
  Net loss                        $      (639)
BALANCE SHEET DATA:
  Assets                          $    17,162
  Liabilities                          27,266
</TABLE>

In the first nine months of fiscal 2003, we made lease payments of $0.3 million
to the Partnership, which is included in selling, general and administrative
expense in our Consolidated Income Statements. See Note K to the Consolidated
Financial Statements in our fiscal 2002 Annual Report on Form 10-K for further
information.

                                      -34-
<PAGE>
Guarantees

Taiwan

We have a 44% interest in Lottery Technology Services Investment Corporation
("LTSIC"), which is accounted for using the equity method. LTSIC's wholly owned
subsidiary, Lottery Technology Services Corporation ("LTSC"), provides equipment
and services, (which we supplied to LTSC), to the Bank of Taipei, who holds the
license to operate the Taiwan Public Welfare Lottery.

At November 23, 2002, we have guaranteed approximately $4.4 million, or 44%, of
$10.1 million of loans made by an unrelated commercial lender to LTSC. The loans
have a maturity date of January 2007 and our guarantee expires in July 2007.

We are recognizing 56% of product sales and service revenue from LTSC. The
remaining 44% of product sales and service revenue has been deferred and is
included in other liabilities in our Consolidated Balance Sheets at November 23,
2002 and February 23, 2002. Sales of products and services to LTSC were $5.6
million during the first nine months of fiscal 2003. See Notes F and K to the
Consolidated Financial Statements in our fiscal 2002 Annual Report on Form 10-K
for further information.

Times Squared

At November 23, 2002, we have guaranteed $2.6 million of lease obligations of
Times Squared Incorporated. The guarantee expires in December 2013. See Note F
to the Consolidated Financial Statements in our fiscal 2002 Annual Report on
Form 10-K for further information.

Market Risk Disclosures

The primary market risk inherent in our financial instruments and exposures is
the potential loss arising from adverse changes in interest rates and foreign
currency rates. Our exposure to commodity price changes is not considered
material and is managed through our procurement and sales practices. We did not
own any marketable equity securities during the first nine months of fiscal
2003.

Interest rates

Interest rate market risk is estimated as the potential change in the fair value
of our total debt or current earnings resulting from a hypothetical 10% adverse
change in interest rates. At November 23, 2002, the estimated fair value of our
$95 million of fixed rate Senior Notes approximated $104.1 million (as
determined by an independent investment banker). A hypothetical 10% adverse or
favorable change in interest rates applied to the fixed rate Senior Notes would
not have a material effect on current earnings.

At November 23, 2002, the estimated fair value of our $175 million principal
amount of 1.75% Convertible Debentures was $205.4 million (as determined by an
independent investment banker). At November 23, 2002, a hypothetical 10%
increase in interest rates would reduce the estimated fair value of the
Convertible Debentures to $203.7 million and a hypothetical 10% decrease in
interest rates would increase the estimated fair value of the Convertible
Debentures to $207.2 million.

A hypothetical 10% adverse or favorable change in interest rates applied to
variable rate debt would not have a material effect on current earnings.

                                      -35-
<PAGE>
We use various techniques to mitigate the risk associated with future changes in
interest rates, including entering into interest rate swaps. As of the second
quarter of this fiscal year, we had $135 million of interest rate swap
agreements in place on our fixed rate Series A and Series B Senior Notes, which
effectively entitled us to exchange fixed rate payments for variable rate
payments until May 2007. During the third quarter of fiscal 2003, we sold these
interest rate swaps for $13.1 million, the proceeds of which were applied as
follows:

<TABLE>
<CAPTION>
                                Sale of interest rate swaps related to:
                             ---------------------------------------------
                              2004 Senior     2007 Senior
                                 Notes           Notes           Total
                             -------------   -------------   -------------
<S>                          <C>             <C>             <C>
Long-term debt               $           -   $        10.0   $        10.0
Accounts receivable                    0.4             1.4             1.8
Other income                           1.2               -             1.2
Interest expense                       0.1               -             0.1
                             -------------   -------------   -------------
                             $         1.7   $        11.4   $        13.1
                             =============   =============   =============
</TABLE>

In accordance with Financial Accounting Standards Board Statement 133, the $10.0
million addition to long-term debt will be amortized as a reduction of interest
expense through the due date of the Series B Senior Notes (May 2007). The $1.8
million applied to accounts receivable represents receivables from banks for
interest rate resets that were effective on May 15, 2002 and August 15, 2002.

In addition, we used cash on hand to repurchase, during the third quarter of
fiscal 2003, $40 million of our 2004 Series A Senior Notes. In connection with
this repurchase, we paid tender premiums to the holders of the notes and
incurred associated fees totaling $3.4 million. This amount, along with the
write-off of debt issuance costs of $0.1 million, net of $1.2 million in
proceeds from the sale, as noted above, of certain interest rate swaps
associated with these notes, are included in other income in our Consolidated
Income Statements.

Equity price risk

At November 23, 2002, the estimated fair value of our $175 million principal
amount of 1.75% Convertible Debentures was $205.4 million (as determined by an
independent investment banker). At November 23, 2002, a hypothetical 10%
increase in the market price of our common stock would increase the estimated
fair value of the Convertible Debentures to $214.7 million and a hypothetical
10% decrease in the market price of our common stock would reduce the estimated
fair value of the Convertible Debentures to $196.7 million.

Foreign Currency Exchange Rates

We are subject to foreign exchange exposures arising from current and
anticipated transactions denominated in currencies other than our functional
currency (United States dollars) and from the translation of foreign currency
balance sheet accounts into United States dollar balance sheet accounts.

We seek to manage our foreign exchange risk by securing payment from our
customers in United States dollars, by sharing risk with our customers, by
utilizing foreign currency borrowings, by leading and lagging receipts and
payments, and by entering into foreign currency exchange and option contracts.
In addition, a significant portion of the costs attributable to our foreign
currency revenues are payable in the local currencies. Whenever possible, we
negotiate clauses into our contracts that allow for price adjustments should a
material change in foreign exchange rates occur.

                                      -36-
<PAGE>
From time to time, we enter into foreign currency exchange and option contracts
to reduce the exposure associated with current transactions and anticipated
transactions denominated in foreign currencies. However, we do not engage in
currency speculation. At November 23, 2002, a hypothetical 10% adverse change in
foreign exchange rates would result in a translation loss of $7.7 million that
would be recorded in the equity section of our balance sheet.

At November 23, 2002, a hypothetical 10% adverse change in foreign exchange
rates would result in a net transaction loss of $2.7 million that would be
recorded in current earnings after considering the effects of foreign exchange
contracts currently in place.

At November 23, 2002, a hypothetical 10% adverse change in foreign exchange
rates would result in a net reduction of cash flows from anticipatory
transactions during the remainder of fiscal 2003 of $1.9 million, after
considering the effects of foreign exchange contracts currently in place. The
percentage of fiscal 2003 anticipatory cash flows that were hedged varied
throughout the first nine months of fiscal 2003, but averaged 54%.

As of November 23, 2002, we had contracts for the sale of foreign currency of
approximately $46.5 million (primarily euro, pounds sterling and Brazilian real)
and the purchase of foreign currency of approximately $34.4 million (primarily
pounds sterling, Brazilian real and Swedish Krona).

                                      -37-
<PAGE>
Item 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

See "Market Risk Disclosures" above.

Item 4.   CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed in our Securities Exchange Act reports is
recorded, processed, summarized and reported within the time periods specified
in the Securities and Exchange Commission's rules and forms, and that such
information is accumulated and communicated to our management, including our
President and Chief Executive Officer ("CEO") and our Senior Vice President and
Chief Financial Officer ("CFO"), as appropriate, to allow timely decisions
regarding required disclosure. In designing and evaluating the disclosure
controls and procedures, management recognized that any controls and procedures,
no matter how well designed and operated, can provide only reasonable assurance
of achieving the desired control objectives and management was required to apply
its judgment in evaluating the cost-benefit relationship of possible controls
and procedures.

During the 90-day period prior to the date of this report, we carried out an
evaluation under the supervision and with the participation of our management,
including our CEO and our CFO, of the effectiveness of the design and operation
of our disclosure controls and procedures (as defined in Rule 13a-14(c) under
the Securities Exchange Act of 1934). Based upon that evaluation, the CEO and
CFO concluded that the Company's disclosure controls and procedures were
effective. Subsequent to the date of this evaluation, there have been no
significant changes in our internal controls or in other factors that could
significantly affect these controls, and no corrective actions have been taken
with regard to significant deficiencies or material weaknesses in such controls.

PART II.   OTHER INFORMATION

Item 1.   LEGAL PROCEEDINGS

As previously reported, on October 2, 2002, the Regional Appeals Court of
Dusseldorf, Public Procurement Division, ruled that the decision of Westdeutsche
Lotterie GmbH & Co. OHG ("WestLotto") to award its new online lottery system
contract to us was lawful and consistent with applicable legal authorities. This
ruling overturned the determination of the Public Procurement Tribunal of
Munster, announced on June 24, 2002 and served on June 26, 2002, which granted
the bid protest of Scientific Games Corporation under the aforementioned online
lottery procurement. On October 10, 2002, WestLotto announced that it would
award the new online lottery systems contract to us.

As previously reported, upon the expiration of our current contract, Caixa
Economica Federal ("CEF"), the operator of Brazil's National Lottery, will
attempt to handle internally some non-lottery operations that we currently
perform under our contract and, with regard to the remaining lottery operations,
is seeking to proceed with a competitive procurement process calculated to
result in multiple vendors to administer Brazil's National Lottery, which is
presently administered solely by us. See Part 1, Item 2 - "Significant Contract
Rebids". We continue to press in Brazilian courts our contention, which we
believe to have merit, that the CEF procurement process (detailed in previous
reports) violates a prior Brazilian judicial decision as well as other
applicable Brazilian law. We remain unable to predict the outcome of our legal
challenges to the CEF's procurement process. During our 2003 third quarter, CEF
indicated that it plans to request that we extend the term of our contract with
CEF, which is scheduled to end in January 2003, for an additional six months.

For information respecting these and certain other legal proceedings, refer to
Part I, Item 1 - "Certain Factors That May Affect Future Performance -
Government Regulations and Other Actions Affecting the Online Lottery Industry
Could Have a Negative Effect On the Company's Business", Part I, Item 3 - "Legal
Proceedings" and Note F to Consolidated Financial Statements, in our fiscal 2002
Annual Report on Form 10-K, and Part II, Item 1 - "Legal Proceedings" in our
Quarterly Report for the quarterly periods ended respectively, May 25, 2002 and
August 24, 2002.

                                      -38-
<PAGE>
Item 6.     EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits - The exhibits to this report are as follows:

    12.1     Computation of Ratio of Earnings to Fixed Charges

    99.1     Certification Pursuant to 18 United States Code Section 1350, as
             Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
             of W. Bruce Turner, President and Chief Executive Officer of the
             Company

    99.2     Certification Pursuant to 18 United States Code Section 1350, as
             Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
             of Jaymin B. Patel, Senior Vice President and Chief Financial
             Officer of the Company

(b) Reports on Form 8-K - We filed the following reports with the Securities
    and Exchange Commission on Form 8-K during the quarter to which this report
    relates:

    (i)      We filed a report on Form 8-K on September 13, 2002 incorporating
             by reference a press release we issued on September 13, 2002
             announcing our fiscal 2003 second quarter and year to date results.
             In addition, we revised our earnings guidance upward for the fiscal
             year ending February 22, 2003.

    (ii)     We filed a report on Form 8-K on October 2, 2002 incorporating by
             reference a press release we issued on October 2, 2002 announcing
             that we launched an offer to purchase up to $50 million of our
             7.75% Series A Guaranteed Senior Notes due 2004 and our 7.87%
             Series B Guaranteed Senior Notes due 2007.

    (iii)    We filed a report on Form 8-K on November 6, 2002 incorporating by
             reference a press release we issued on November 6, 2002 announcing
             that the Taiwan National Lottery recalled previously issued instant
             tickets distributed by a partnership in which we own a 44%
             interest.

                                      -39-
<PAGE>
                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                GTECH HOLDINGS CORPORATION

Date: January 2, 2003          By /s/ Jaymin B. Patel
                                ------------------------------------------------
                                Jaymin B. Patel, Senior Vice President and Chief
                                Financial Officer (Principal Financial Officer)

Date: January 2, 2003         By /s/ Robert J. Plourde
                                ------------------------------------------------
                                Robert J. Plourde, Vice President and Corporate
                                Controller (Principal Accounting Officer)

                                      -40-
<PAGE>
                                CERTIFICATIONS

I, W. Bruce Turner, President and Chief Executive Officer of GTECH Holdings
Corporation (the "Company"), certify that:

(1)      I have reviewed this quarterly report on Form 10-Q of the Company;

(2)      Based on my knowledge, this quarterly report does not contain any
         untrue statement of a material fact or omit to state a material fact
         necessary to make the statements made, in light of the circumstances
         under which such statements were made, not misleading with respect to
         the period covered by this quarterly report;

(3)      Based on my knowledge, the financial statements, and other financial
         information included in this quarterly report, fairly present in all
         material respects the financial condition, results of operations and
         cash flows of the Company as of, and for, the periods presented in this
         quarterly report;

(4)      The Company's other certifying officer and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the Company and we
         have:

         (a)  designed such disclosure controls and procedures to ensure that
              material information relating to the Company, including its
              consolidated subsidiaries, is made known to us by others within
              those entities, particularly during the period in which this
              quarterly report was being prepared;

         (b)  evaluated the effectiveness of the Company's disclosure controls
              and procedures as of a date within 90 days prior to the filing
              date of this quarterly report (the "Evaluation Date"); and

         (c)  presented in this quarterly report our conclusions about the
              effectiveness of the disclosure controls and procedures based on
              our evaluation as of the Evaluation Date;

(5)      The Company's other certifying officer and I have disclosed, based on
         our most recent evaluation, to the Company's auditors and the audit
         committee of the Company's board of directors:

         (a)  all significant deficiencies in the design or operation of
              internal controls which could adversely affect the Company's
              ability to record, process, summarize and report financial data
              and have identified for the Company's auditors any material
              weaknesses in internal controls; and

         (b)  any fraud, whether or not material, that involves management or
              other employees who have a significant role in the Company's
              internal controls; and

(6)      The Company's other certifying officer and I have indicated in this
         quarterly report whether or not there were any significant changes in
         internal controls or in other factors that could significantly affect
         internal controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.

                                           GTECH HOLDINGS CORPORATION

Date:  January 2, 2003                     By /s/ W. Bruce Turner
                                           -------------------------------------
                                           W. Bruce Turner
                                           President and Chief Executive Officer

                                      -41-
<PAGE>
I, Jaymin B. Patel, Senior Vice President and Chief Financial Officer of GTECH
Holdings Corporation (the "Company"), certify that:

(1)      I have reviewed this quarterly report on Form 10-Q of the Company;

(2)      Based on my knowledge, this quarterly report does not contain any
         untrue statement of a material fact or omit to state a material fact
         necessary to make the statements made, in light of the circumstances
         under which such statements were made, not misleading with respect to
         the period covered by this quarterly report;

(3)      Based on my knowledge, the financial statements, and other financial
         information included in this quarterly report, fairly present in all
         material respects the financial condition, results of operations and
         cash flows of the Company as of, and for, the periods presented in this
         quarterly report;

(4)      The Company's other certifying officer and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the Company and we
         have:

         (a)  designed such disclosure controls and procedures to ensure that
              material information relating to the Company, including its
              consolidated subsidiaries, is made known to us by others within
              those entities, particularly during the period in which this
              quarterly report was being prepared;

         (b)  evaluated the effectiveness of the Company's disclosure controls
              and procedures as of a date within 90 days prior to the filing
              date of this quarterly report (the "Evaluation Date"); and

         (c)  presented in this quarterly report our conclusions about the
              effectiveness of the disclosure controls and procedures based on
              our evaluation as of the Evaluation Date;

(5)      The Company's other certifying officer and I have disclosed, based on
         our most recent evaluation, to the Company's auditors and the audit
         committee of the Company's board of directors:

         (a)  all significant deficiencies in the design or operation of
              internal controls which could adversely affect the Company's
              ability to record, process, summarize and report financial data
              and have identified for the Company's auditors any material
              weaknesses in internal controls; and

         (b)  any fraud, whether or not material, that involves management or
              other employees who have a significant role in the Company's
              internal controls; and

(6)      The Company's other certifying officer and I have indicated in this
         quarterly report whether or not there were any significant changes in
         internal controls or in other factors that could significantly affect
         internal controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.

                                      GTECH HOLDINGS CORPORATION

Date: January 2, 2003                 By /s/ Jaymin B. Patel
                                      ------------------------------------------
                                      Jaymin B. Patel, Senior Vice President and
                                      Chief Financial Officer

                                      -42-