<PAGE>   1
                                    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 August 26, 2000



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 September 30, 2000 there were 34,596,033  shares of the  registrant's  Common
Stock outstanding.
<PAGE>   2
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 Statement of Shareholders' Equity                                                         6

              Consolidated Statements of Cash Flows                                                                  7

              Notes to Consolidated Financial Statements                                                           8-11

Item 2.       Management's Discussion and Analysis of Financial Condition                                          12-18
              and Results of Operations

Item 3.       Quantitative and Qualitative Disclosures about Market Risk                                            18

PART II.  OTHER INFORMATION

Item 1.       Legal Proceedings                                                                                    19-20

Item 2.       Changes in Securities                                                                                 21

Item 6.       Exhibits and Reports on Form 8-K                                                                      21

SIGNATURES                                                                                                          22

EXHIBITS
</TABLE>
<PAGE>   3
PART 1. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS

GTECH HOLDINGS CORPORATION AND SUBSIDIARIES

<TABLE>
<CAPTION>
                                                                                                (Unaudited)
                                                                                                 August 26,          February 26,
                                                                                                    2000                 2000
                                                                                                -----------          ------------
                                                                                              (In thousands, except share amounts)
<S>                                                                                            <C>                   <C>
ASSETS
CURRENT ASSETS
      Cash and cash equivalents                                                                 $     9,958          $    11,115
      Trade accounts receivable                                                                     105,058              115,358
      Sales-type lease receivables                                                                   10,032               10,110
      Inventories                                                                                    72,961               67,418
      Deferred income taxes                                                                          15,853               15,853
      Other current assets                                                                           20,141               19,346
                                                                                                -----------          -----------
                             TOTAL CURRENT ASSETS                                                   234,003              239,200

SYSTEMS, EQUIPMENT AND OTHER ASSETS RELATING TO CONTRACTS                                         1,265,197            1,231,755
Less: Accumulated Depreciation                                                                     (899,835)            (855,837)
                                                                                                -----------          -----------
                                                                                                    365,362              375,918

GOODWILL, net                                                                                       125,271              130,710

INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED AFFILIATES                                             35,208               25,898

OTHER ASSETS                                                                                        103,792              119,297
                                                                                                -----------          -----------
                                                                                                $   863,636          $   891,023
                                                                                                ===========          ===========

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
      Accounts payable                                                                          $    40,435          $    53,103
      Accrued expenses                                                                               54,383               44,898
      Special charge                                                                                 21,557                   --
      Employee compensation                                                                          24,070               30,057
      Advance payments from customers                                                                35,591               33,438
      Income taxes payable                                                                           30,651               49,382
      Current portion of long-term debt                                                                  --                   69
                                                                                                -----------          -----------
                             TOTAL CURRENT LIABILITIES                                              206,687              210,947

LONG-TERM DEBT, less current portion                                                                331,000              349,400

OTHER LIABILITIES                                                                                    28,265               27,363

DEFERRED INCOME TAXES                                                                                 6,737                6,737

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,
         44,183,315 and 44,171,315 shares issued, 34,906,389 and 34,804,004 shares
         outstanding at August 26, 2000 and February 26, 2000, respectively                             442                  442
      Additional paid-in capital                                                                    176,953              176,750
      Equity carryover basis adjustment                                                              (7,008)              (7,008)
      Accumulated other comprehensive income                                                        (75,838)             (69,493)
      Retained earnings                                                                             435,755              437,830
                                                                                                -----------          -----------
                                                                                                    530,304              538,521
      Less cost of 9,276,926 and 9,367,311 shares in treasury at
         August 26, 2000 and February 26, 2000, respectively                                       (239,357)            (241,945)
                                                                                                -----------          -----------
                                                                                                    290,947              296,576
                                                                                                -----------          -----------
                                                                                                $   863,636          $   891,023
                                                                                                ===========          ===========
</TABLE>

See Notes to Consolidated Financial Statements


                                       -3-
<PAGE>   4
CONSOLIDATED INCOME STATEMENTS

GTECH HOLDINGS CORPORATION AND SUBSIDIARIES

<TABLE>
<CAPTION>
                                                                       (Unaudited)
                                                                    Three Months Ended
                                                              -----------------------------
                                                              August 26,         August 28,
                                                                2000                1999
                                                              ----------         ----------
                                                                 (Dollars in thousands,
                                                                except per share amounts)
<S>                                                           <C>                <C>
Revenues:
      Services                                                $ 204,209          $ 209,843
      Sales of products                                          23,399             45,546
                                                              ---------          ---------
                                                                227,608            255,389
Costs and expenses:
      Costs of services                                         142,622            138,351
      Costs of sales                                             29,615             34,374
                                                              ---------          ---------
                                                                172,237            172,725
                                                              ---------          ---------

Gross profit                                                     55,371             82,664

Selling, general and administrative                              32,237             29,780
Research and development                                         13,351             11,290
Goodwill amortization                                             1,609              1,563
                                                              ---------          ---------
      Operating expenses                                         47,197             42,633
                                                              ---------          ---------

Special charge                                                   40,018                 --

Operating income (loss)                                         (31,844)            40,031

Other income (expense):
      Interest income                                             1,044                864
      Equity in earnings of unconsolidated affiliates               838                793
      Other income                                                1,754              2,332
      Interest expense                                           (6,653)            (7,149)
                                                              ---------          ---------

Income (loss) before income taxes                               (34,861)            36,871

Income taxes (benefit)                                          (13,595)            15,117
                                                              ---------          ---------

Net income (loss)                                             $ (21,266)         $  21,754
                                                              =========          =========

Basic and diluted earnings (loss) per share                   $    (.61)         $     .58
                                                              =========          =========
</TABLE>


See Notes to Consolidated Financial Statements


                                       -4-
<PAGE>   5
CONSOLIDATED INCOME STATEMENTS

GTECH HOLDINGS CORPORATION AND SUBSIDIARIES

<TABLE>
<CAPTION>
                                                                      (Unaudited)
                                                                    Six Months Ended
                                                              -----------------------------
                                                              August 26,         August 28,
                                                                2000               1999
                                                              ----------         ----------
                                                                 (Dollars in thousands,
                                                               except per share amounts)
<S>                                                           <C>                <C>
Revenues:
      Services                                                $ 426,840          $ 421,001
      Sales of products                                          42,766             73,048
                                                              ---------          ---------
                                                                469,606            494,049
Costs and expenses:
      Costs of services                                         285,385            278,263
      Costs of sales                                             45,426             52,492
                                                              ---------          ---------
                                                                330,811            330,755
                                                              ---------          ---------

Gross profit                                                    138,795            163,294

Selling, general and administrative                              64,798             60,218
Research and development                                         26,277             21,966
Goodwill amortization                                             3,218              3,126
                                                              ---------          ---------
      Operating expenses                                         94,293             85,310
                                                              ---------          ---------

Special charge                                                   40,018                 --

Operating income                                                  4,484             77,984

Other income (expense):
      Interest income                                             2,969              1,701
      Equity in earnings of unconsolidated affiliates             2,094              1,936
      Other income                                                2,441              1,278
      Interest expense                                          (13,688)           (13,934)
                                                              ---------          ---------

Income (loss) before income taxes                                (1,700)            68,965

Income taxes (benefit)                                             (663)            28,276
                                                              ---------          ---------

Net income (loss)                                             $  (1,037)         $  40,689
                                                              =========          =========

Basic and diluted earnings (loss) per share                   $    (.03)         $    1.08
                                                              =========          =========
</TABLE>


See Notes to Consolidated Financial Statements


                                       -5-
<PAGE>   6
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY-(Unaudited)

GTECH HOLDINGS CORPORATION AND SUBSIDIARIES


<TABLE>
<CAPTION>
                                                                               Equity     Accumulated
                                                                Additional   Carryover      Other
                                          Outstanding   Common    Paid-in      Basis     Comprehensive
                                             Shares     Stock     Capital    Adjustment     Income
                                          -----------   ------  ----------   ----------  -------------
                                                           (Dollars in thousands)
<S>                                       <C>           <C>     <C>          <C>         <C>
Balance at February 26, 2000               34,804,004   $442      $176,750    $(7,008)     $(69,493)
Comprehensive loss:
  Net loss                                         --     --            --         --            --
  Other comprehensive income (loss),
    net of tax:
     Foreign currency translation                  --     --            --         --        (6,371)
     Net gain on derivative instruments            --     --            --         --            26

Comprehensive loss
Treasury shares repurchased                   (69,100)    --            --         --            --
Shares reissued under employee stock
  purchase and stock award plans              159,485     --            --         --            --
Shares issued upon exercise of stock
  options                                      12,000     --           203         --            --
                                          -----------   ----      --------    -------      --------
Balance at August 26, 2000                 34,906,389   $442      $176,953    $(7,008)     $(75,838)
                                          ===========   ====      ========    =======      ========
</TABLE>

<TABLE>
<CAPTION>
                                           Retained   Treasury
                                           Earnings     Stock        Total
                                          ---------   ---------    ---------
                                               (Dollars in thousands)
<S>                                       <C>         <C>          <C>
Balance at February 26, 2000              $ 437,830   $(241,945)   $ 296,576
Comprehensive loss:
  Net loss                                   (1,037)         --       (1,037)
  Other comprehensive income (loss),
    net of tax:
     Foreign currency translation                --          --       (6,371)
     Net gain on derivative instruments          --          --           26
                                                                   ---------
Comprehensive loss                                                    (7,382)
Treasury shares repurchased                      --      (1,530)      (1,530)
Shares reissued under employee stock
  purchase and stock award plans             (1,038)      4,118        3,080
Shares issued upon exercise of stock
  options                                        --          --          203
                                          ---------   ---------    ---------
Balance at August 26, 2000                $ 435,755   $(239,357)   $ 290,947
                                          =========   =========    =========
</TABLE>


See Notes to Consolidated Financial Statements


                                       -6-
<PAGE>   7
CONSOLIDATED STATEMENTS OF CASH FLOWS

GTECH HOLDINGS CORPORATION AND SUBSIDIARIES

<TABLE>
<CAPTION>
                                                                                       (Unaudited)
                                                                                     Six Months Ended
                                                                               -----------------------------
                                                                               August 26,         August 28,
                                                                                 2000               1999
                                                                               ----------         ----------
                                                                                  (Dollars in thousands)
<S>                                                                            <C>                <C>
OPERATING ACTIVITIES
Net income (loss)                                                              $  (1,037)         $ 40,689
Adjustments to reconcile net income (loss) to net cash provided
  by operating activities:
      Depreciation and other intangibles amortization                             87,575            88,129
      Goodwill amortization                                                        3,218             3,126
      Special charge                                                              40,018                --
      Equity in earnings of unconsolidated affiliates,
         net of dividends received                                                (1,130)              138
      Other                                                                          998            (2,224)
      Changes in operating assets and liabilities:
         Trade accounts receivable                                                12,087           (24,091)
         Inventories                                                              (5,541)            9,361
         Special charge                                                          (11,628)           (3,904)
         Other assets and liabilities                                            (17,951)          (15,396)
                                                                               ---------          --------
NET CASH PROVIDED BY OPERATING ACTIVITIES                                        106,609            95,828

INVESTING ACTIVITIES
Purchases of systems, equipment and other assets relating to contracts           (66,641)          (62,549)
Investments in and advances to unconsolidated subsidiaries                       (11,688)          (10,586)
Other                                                                             (7,593)          (10,236)
                                                                               ---------          --------
NET CASH USED FOR INVESTING ACTIVITIES                                           (85,922)          (83,371)

FINANCING ACTIVITIES
Net proceeds from issuance of long-term debt                                      38,000            97,200
Principal payments on long-term debt                                             (56,466)          (39,235)
Purchases of treasury stock                                                       (1,530)          (70,327)
Other                                                                              1,269               207
                                                                               ---------          --------
NET CASH USED FOR FINANCING ACTIVITIES                                           (18,727)          (12,155)

Effect of exchange rate changes on cash                                           (3,117)              715
                                                                               ---------          --------
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                                  (1,157)            1,017

Cash and cash equivalents at beginning of period                                  11,115             7,733
                                                                               ---------          --------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                                     $   9,958          $  8,750
                                                                               =========          ========
</TABLE>


See Notes to Consolidated Financial Statements


                                      -7-
<PAGE>   8
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 "Company"), the parent of GTECH Corporation, 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.  Accordingly,  they do not include all of the  information  and
footnotes 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
six-month  period ended August 26, 2000 are not  necessarily  indicative  of the
results that may be expected for the full fiscal year ending  February 24, 2001.
The  balance  sheet at  February  26,  2000 has been  derived  from the  audited
financial  statements  at  that  date.  For  further  information  refer  to the
consolidated   financial  statements  and  footnotes  thereto  included  in  the
Company's fiscal 2000 Annual Report on Form 10-K.

Certain   reclassifications  have  been  made  to  the  prior  years'  financial
statements to conform to the current year presentation.



<TABLE>
<CAPTION>
NOTE B--INVENTORIES                               August 26       February 26,
                                                    2000              2000
                                                  ---------      ------------
                                                    (Dollars in thousands)
<S>                                                 <C>             <C>
Inventories consist of:
       Raw materials                               $36,775          $23,623
       Work in progress                             34,167           42,701
       Finished goods                                2,019            1,094
                                                   -------          -------
                                                   $72,961          $67,418
                                                   =======          =======
</TABLE>


<TABLE>
<CAPTION>
NOTE C--LONG-TERM DEBT                            August 26,     February 26,
                                                     2000           2000
                                                  ----------     ------------
                                                    (Dollars in thousands)
<S>                                                <C>              <C>
Long-term debt consists of:
       7.75% Series A Senior Notes due 2004       $150,000         $150,000
       7.87% Series B Senior Notes due 2007        150,000          150,000
       Revolving credit facility                    31,000           45,000
       Other                                            --            4,469
                                                  --------         --------
                                                   331,000          349,469
       Less current portion                             --               69
                                                  --------         --------
                                                  $331,000         $349,400
                                                  ========         ========
</TABLE>

The Company has an unsecured revolving credit facility of $400,000,000  expiring
in June 2002 (the "Credit  Facility").  At August 26, 2000, the weighted average
interest rate for outstanding borrowings under the Credit Facility was 6.87%.


                                      -8-
<PAGE>   9
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(continued)


NOTE D--INCOME TAXES

The  Company's  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.


NOTE E--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
herein.


NOTE F--EARNINGS PER SHARE

The following  table sets forth the  computation  of basic and diluted  earnings
(loss) per share:

<TABLE>
<CAPTION>
                                                        Three Months Ended                 Six Months Ended
                                                   ----------------------------      ----------------------------
                                                   August 26,        August 28,      August 26,        August 28,
                                                      2000              1999            2000              1999
                                                   ----------        ----------      ----------        ----------
                                                    (Dollars and shares in thousands, except per share amounts)
<S>                                                 <C>               <C>             <C>               <C>
Numerator:
       Net income (loss)                            $(21,266)         $21,754         $ (1,037)         $40,689

Denominator:
       Weighted average shares-Basic                  34,840           37,193           34,835           37,507

Effect of dilutive securities:
       Employee stock options and unvested
         restricted shares                                --               51               --               54
                                                    --------          -------         --------          -------
       Weighted average shares-Diluted                34,840           37,244           34,835           37,561
                                                    ========          =======         ========          =======

Basic and diluted earnings (loss) per share         $   (.61)         $   .58         $   (.03)         $  1.08
                                                    ========          =======         ========          =======
</TABLE>


The diluted share base for the three months and six months ended August 26, 2000
excludes  64,000 and 85,000  shares,  respectively, related  to  employee  stock
options and unvested restricted shares.   These shares are excluded due to their
antidilutive effect as a result of the Company's net loss during those  periods.


                                      -9-
<PAGE>   10
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(continued)


NOTE G -- COMPREHENSIVE INCOME

The following table sets forth the components of comprehensive income (loss):

<TABLE>
<CAPTION>
                                                           Three Months Ended                  Six Months Ended
                                                      ----------------------------       ---------------------------
                                                      August 26,        August 28,       August 26,       August 28,
                                                         2000              1999             2000             1999
                                                      ----------        ----------       ---------        ----------
                                                                        (Dollars in thousands)
<S>                                                    <C>               <C>             <C>              <C>
Net income (loss)                                      $(21,266)         $ 21,754          $(1,037)         $ 40,689

Other comprehensive income (loss), net of tax:
   Foreign currency translation                           1,728            (9,608)          (6,371)            6,734
   Net gain (loss) on derivative instruments               (321)             (242)              26              (337)
                                                       --------          --------          -------          --------
Comprehensive income (loss)                            $(19,859)         $ 11,904          $(7,382)         $ 47,086
                                                       ========          ========          =======          ========
</TABLE>


NOTE H -- SEGMENT INFORMATION

The Company  presently has one reportable  segment,  the Lottery segment,  which
provides online, high speed,  highly secured  transaction  processing systems to
the worldwide  lottery industry.  Executive  management of the Company evaluates
segment  performance based on net operating profit after income taxes.  Revenues
from the  Company's  Transactive  and Dreamport  subsidiaries  are the principal
components of all other revenues reported below.

The Company's business segment data is summarized below:

<TABLE>
<CAPTION>
                                                      Three Months Ended                      Six Months Ended
                                                 -----------------------------         -----------------------------
                                                 August 26,         August 28,         August 26,         August 28,
                                                    2000               1999              2000                1999
                                                 ----------         ----------         ----------         ----------
                                                                       (Dollars in thousands)
<S>                                              <C>                <C>                <C>                <C>
Revenues from external sources:
    Lottery                                      $ 211,535          $ 236,448          $ 434,880          $ 456,620
    All other                                       16,073             18,941             34,726             37,429
                                                 ---------          ---------          ---------          ---------
    Consolidated                                 $ 227,608          $ 255,389          $ 469,606          $ 494,049
                                                 =========          =========          =========          =========

Net operating profit after income taxes:
    Lottery                                      $  13,862          $  28,196          $  39,588          $  51,166
    All other                                       (2,494)            (1,168)            (2,758)              (167)
                                                 ---------          ---------          ---------          ---------
    Consolidated                                 $  11,368          $  27,028          $  36,830          $  50,999
                                                 =========          =========          =========          =========
</TABLE>


                                      -10-
<PAGE>   11
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(continued)


A reconciliation of net operating profit after income taxes to net income (loss)
as reported on the consolidated income statements is as follows:

<TABLE>
<CAPTION>
                                                     Three Months Ended                   Six Months Ended
                                               -----------------------------        ---------------------------
                                               August 26,         August 28,        August 26,       August 28,
                                                  2000              1999              2000              1999
                                               ----------         ----------        ----------       ----------
                                                                  (Dollars in thousands)
<S>                                            <C>                <C>               <C>              <C>
Net operating profit after income taxes         $ 11,368          $ 27,028          $ 36,830          $ 50,999
    Reconciling items, net of tax:
    Special charge                               (24,411)               --           (24,411)               --
    Interest expense                              (4,058)           (4,218)           (8,350)           (8,221)
    Other                                         (4,165)           (1,056)           (5,106)           (2,089)
                                                --------          --------          --------          --------
       Net income (loss)                        $(21,266)         $ 21,754          $ (1,037)         $ 40,689
                                                ========          ========          ========          ========
</TABLE>


NOTE I -- SPECIAL AND ADDITIONAL CHARGES

In the second quarter of fiscal 2001, the Company recorded a $40,018,000 special
charge  ($24,411,000  after-tax,  or $0.70 per share) in connection with certain
contractual  obligations  and a  value  assessment  of  the  Company's  business
operations.  The major  components of the special  charge consist of $11,556,000
for  contractual  obligations in connection with the departures in July, 2000 of
the Company's  former Chairman and Chief Executive  Officer and former President
and  Chief  Operating  Officer,  $10,378,000  for  a  workforce  reduction  that
eliminated  approximately 175 Company positions  worldwide,  $8,415,000 of legal
expenses and other costs for the exit of certain business strategies and product
lines,  $6,130,000 for the termination of consulting agreements,  and $4,567,000
of facility exit costs and other miscellaneous  charges. The latter charges were
offset by net gains of $1,028,000 on the disposition of Company aircraft.

A summary of the special charge activity is as follows:

<TABLE>
<CAPTION>
                                                                 Exit of
                                                                 Certain
                                   Executive      Worldwide      Business       Terminate
                                  Contractual     Workforce     Strategies &   Consulting
                                  Obligations     Reduction    Product Lines    Contracts      Other         Total
                                  -----------     ---------    --------------  ----------     -------       --------
                                                                  (Dollars in thousands)
<S>                               <C>             <C>            <C>           <C>            <C>           <C>
Special charge                     $ 11,556       $ 10,378       $ 8,415       $ 6,130       $ 3,539       $ 40,018
Cash expenditures                    (9,477)           (87)       (1,384)         (460)         (220)       (11,628)
Noncash charges                          --             --        (4,396)           --        (2,437)        (6,833)
                                   --------       --------       -------       -------       -------       --------
Balance at August 26, 2000         $  2,079       $ 10,291       $ 2,635       $ 5,670       $   882       $ 21,557
                                   ========       ========       =======       =======       =======       ========
</TABLE>


The Company also recorded $5,108,000 ($3,116,000 after-tax,  or $0.09 per share)
of  additional  charges  in  the  second  quarter  of  fiscal  2001  principally
associated with the Company's recently implemented  Restricted Stock Plan. These
charges  are  included  in  selling,  general &  administrative  expenses in the
Company's consolidated income statements.


                                      -11-
<PAGE>   12
Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

Certain statements contained in this section and elsewhere in this report are
forward-looking statements within the meaning of Section 27A of the Securities
Act and Section 21E of the Securities Exchange Act of 1934. Such statements
include, without limitation, statements relating to (i) the future prospects for
and stability of the lottery industry and other businesses in which the Company
is engaged or expects to be engaged, (ii) the future operating and financial
performance of the Company, (iii) the ability of the Company to retain existing
business and to obtain and retain new business, and (iv) 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 those contemplated in the forward-looking
statements. These risks and uncertainties include, but are not limited to, those
set forth below and elsewhere in this report, in the Company's fiscal 2000 Form
10-K, and in the Company's subsequent press releases and Form 10-Q's and other
reports and filings with the Securities and Exchange Commission ("SEC").

General

The Company's fiscal year ends on the last Saturday in February each year and
fiscal 2001 ends on February 24, 2001.

The Company has derived substantially all of its revenues from the rendering of
services and the sale or supply of computerized online lottery systems and
components to government-authorized lotteries. Service revenues have been
derived primarily from lottery service contracts. These contracts are typically
at least five years in duration, and are generally 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. Product
sale revenues have been derived 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. The size
and timing of these transactions have resulted in variability in product sale
revenues from period to period. The Company currently anticipates that product
sales during fiscal 2001 will be in a range of $120.0 million to $125.0 million.

The Company has taken steps to broaden its offerings of high-volume transaction
processing services outside of its core business of providing online lottery
services. For example, the Company's IGI subsidiary has pioneered the
development of interactive, televised lottery games. In addition, the Company's
UWin! subsidiary offers secure Internet gaming solutions for
government-authorized wagering, where permitted.

The Company's business is highly regulated, and the competition to secure new
government contracts is often intense. Awards of contracts to the Company are,
from time to time, challenged by competitors. Further, 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, the Company would not
necessarily know of the existence of an investigation which might involve the
Company. Because the Company's reputation for integrity is an important factor
in its business dealings with lottery and other government agencies, if
government authorities were to make an allegation of, or if there were to be a
finding of, improper conduct on the part of or attributable to the Company in
any matter, such an allegation or finding could have a material adverse effect
on the Company's business, including its 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


                                      -12-
<PAGE>   13
"Legal Proceedings" in Part II, Item 1 herein; Part I, Item 1 - "Certain Factors
That May Affect Future Performance - Maintenance of Business Relationships and
Certain Legal Matters" and Part I, Item 3 - "Legal Proceedings" in the Company's
fiscal 2000 Annual Report on Form 10-K; and Note G to the consolidated financial
statements in the Company's fiscal 2000 Annual Report on Form 10-K for further
information concerning these matters and other contingencies.


Special Charge

On August 25, 2000, the Company's Board of Directors approved a plan of
repositioning and restructuring of the Company's operations (the "Plan") upon
the completion of a previously announced value assessment of the Company's
business operations. The Company estimated and recorded a $40.0 million special
charge ($24.4 million after-tax or $0.70 per share) in the second quarter of
fiscal 2001 in connection with certain contractual obligations and the execution
of the Plan. The major components of the special charge consist of $11.6 million
for contractual obligations in connection with the departures in July, 2000 of
the Company's former Chairman and Chief Executive Officer and former President
and Chief Operating Officer, $10.4 million for a workforce reduction that
eliminated approximately 175 Company positions worldwide, $8.4 million of legal
expenses and other costs for the exit of certain business strategies and product
lines, $6.1 million for the termination of consulting agreements, and $4.5
million of facility exit costs and other miscellaneous charges. The latter
charges were offset by net gains of $1.0 million on the disposition of Company
aircraft.

As a result of the value assessment, the Company has taken a number of steps to
strengthen its focus on its core lottery operations and has implemented a
Company-wide resizing to better position itself for future business
opportunities. Dreamport, the Company's gaming and entertainment subsidiary,
will concentrate its efforts towards assisting lotteries to expand their
offerings in the area of video-machine gaming and central systems. The Company
plans to consolidate and/or divest activities and assets of Dreamport, which are
peripheral to the Company's core lottery business, and to relocate remaining
operations from Florida to Rhode Island. UWin!, the Company's Internet-gaming
subsidiary, will continue to pursue Internet-based lottery applications in
government authorized jurisdictions. Gamescape and other marketing-based
organizations within the Company will be consolidated and singularly focused on
driving value to customers in the area of retail network optimization, game
development, and research and management of new product initiatives into the
lottery industry. The Company will continue its product development efforts
respecting new product offerings in its core lottery business, including
PC-based terminals, central system software, and other point-of-sale devices
designed to enhance retail sales. The Company plans to make the majority of
these products and services available for eventual sale and delivery, but has
decided not to continue the additional development of two peripheral products.
In addition, the Company has terminated a number of consulting agreements, will
close an office in the United Kingdom, and will dispose of corporate aircraft
and related facilities.

Beginning in fiscal 2002, the Company expects total annual pre-tax savings in
the range of $24.0 to $26.0 million resulting from the Plan.


Results of Operations

Second Quarter

Revenues for the second quarter of fiscal 2001 were $227.6 million, representing
a $27.8 million, or 10.9%, decrease from revenues of $255.4 million in the
second quarter of fiscal 2000.


                                      -13-
<PAGE>   14
Service revenues, including lottery and other services, in the fiscal 2001
second quarter were $204.2 million, representing a $5.6 million, or 2.7%,
decrease from service revenues of $209.8 million in the second quarter of fiscal
2000. This decrease reflects an 11.7% decrease in domestic lottery service
revenues offset by a 12.7% increase in international lottery service revenues.

In the fiscal 2001 second quarter, lottery sales by the Company's domestic
customers decreased 3% compared with the second quarter of fiscal 2000,
primarily driven by lower jackpot activity in Powerball and Big Game states.
This decrease, along with a contractual rate reduction in Texas and the impact
of four lost contracts, resulted in an 11.7% decrease in the Company's domestic
service revenues.

Lottery sales by the Company's international customers increased 5.6% in the
fiscal 2001 second quarter compared with the second quarter of fiscal 2000,
primarily driven by growth in Brazil. This increase, coupled with the launch of
the national lotteries in South Africa and Morocco, was partially offset by the
impact of the reduction in the dollar value of foreign currencies resulting in a
12.7% increase in the Company's international lottery service revenues.

Product sales in the second quarter of fiscal 2001 were $23.4 million, a
decrease of $22.1 million from the $45.5 million of product sales in the second
quarter of fiscal 2000. In the second quarter of last year, the Company recorded
a significant sale of an online lottery system to Israel. The Company did not
sell any lottery terminals during the second quarter of fiscal 2001, as compared
to the sale of approximately 2,700 lottery terminals during the fiscal 2000
second quarter.

Gross margins on service revenues were 30.2% in the fiscal 2001 second quarter
compared to 34.1% in the second quarter of fiscal 2000. This decrease was
primarily driven by lower margins on new system start-ups in South Africa and
Morocco, coupled with lower jackpot activity.

Gross margins on product sales fluctuate depending on the mix, volume and timing
of product sales contracts. Gross margins on product sales in the second quarter
of fiscal 2001 were negative (26.6%) compared to 24.5% in the second quarter of
fiscal 2000, primarily due to the previously announced cost over-runs on
projects the Company is currently implementing in New South Wales, Australia and
Israel.

Operating expenses in the second quarter of fiscal 2001 were $47.2 million,
representing a $4.6 million, or 10.7%, increase over operating expenses of $42.6
million in the second quarter of fiscal 2000. This increase was principally due
to costs associated with the Company's recently implemented Restricted Stock
Plan. As a percentage of revenues, operating expenses were 20.7% and 16.7%
during the second quarters of fiscal 2001 and 2000, respectively.

The Company's effective income tax rate decreased from 41% in the second quarter
of fiscal 2000 to 39% in the second quarter of fiscal 2001 principally due to
lower state taxes and increased research and development tax credits.


Year to Date

Revenues for the first six months of fiscal 2001 were $469.6 million,
representing a $24.4 million, or 4.9%, decrease from revenues of $494.0 million
in the first six months of fiscal 2000.

Service revenues, including lottery and other services, in the first six months
of fiscal 2001 were $426.8 million, representing a $5.8 million, or 1.4%,
increase over the $421.0 million of service revenues in the first six months of
fiscal 2000. This increase reflects an 11.9% increase in international lottery
service revenues, partially offset by a 4.7% decline in domestic lottery service
revenues.


                                      -14-
<PAGE>   15
Lottery sales by the Company's international customers increased approximately
7.2% in the first six months of fiscal 2001 compared with the first six months
of fiscal 2000, primarily driven by growth in Brazil and Mexico. This increase,
coupled with a contractual rate increase in Brazil and the launch of the
national lotteries in South Africa and Morocco, was partially offset by the
impact of the reduction in the dollar value of foreign currencies resulting in
an 11.9% increase in the Company's international lottery service revenues.

The Company's domestic service revenues declined 4.7% in the first six months of
fiscal 2001 compared with the same period of fiscal 2000, primarily due to a
contractual rate reduction in Texas, along with the impact of four lost
contracts. These decreases were partially offset by a 2.4% increase in lottery
sales by the Company's domestic customers, primarily driven by higher sales in
Texas, New Jersey and New York.

Product sales in the first six months of fiscal 2001 were $42.8 million, a
decrease of $30.2 million from the $73.0 million of product sales in the first
six months of fiscal 2000. The first six months of fiscal 2000 included the
significant sale of an online lottery system to Israel. The Company sold
approximately 400 lottery terminals during the first six months of fiscal 2001,
as compared to approximately 3,700 lottery terminals during the first six months
of fiscal 2000.

Gross margins on service revenues were 33.1% in the first six months of fiscal
2001 compared to 33.9% in the first six months of fiscal 2000, primarily driven
by lower margins on a new system start-up in Morocco.

Gross margins on product sales fluctuate depending on the mix, volume and timing
of product sales contracts. Gross margins on product sales decreased from 28.1%
in the first six months of fiscal 2000 to negative (6.2%) in the first six
months of fiscal 2001, primarily due to the previously announced cost over-runs
on projects the Company is currently implementing in New South Wales, Australia
and Israel.

Operating expenses in the first six months of fiscal 2001 were $94.3 million,
representing a $9.0 million, or 10.5%, increase over the $85.3 million incurred
in the first six months of fiscal 2000. This increase was primarily attributable
to costs associated with the Company's recently implemented Restricted Stock
Plan along with increased development activity on interactive media. As a
percentage of revenues, operating expenses were 20.1% and 17.3% during the first
six months of fiscal 2001 and 2000, respectively.

The Company's effective income tax rate decreased from 41% in the first six
months of fiscal 2000 to 39% in the first six months of fiscal 2001 principally
due to lower state taxes and the increased recognition of the research and
development tax credit. The Company's effective income tax rate was greater than
the statutory rate primarily due to state income taxes and certain expenses that
are not deductible for income tax purposes.


Recent Developments

As previously announced, the scheduled start-up of Colombia's National Lottery
has been postponed by the Colombian government. This delay is expected to impact
fiscal 2001 revenues by approximately $13.0 million. While the Company currently
expects to launch the system during the Company's fourth quarter of fiscal 2001,
there cannot be any assurance that the system launch will not be indefinitely
delayed or cancelled as a result of political uncertainties in Colombia. In the
event of further delays or cancellations, some or all of the Company's $14.8
million investment may be at risk.

See "Legal Proceedings" in Part II, Item 1 herein for a discussion of certain
recent developments respecting the United Kingdom National Lottery.


                                      -15-
<PAGE>   16
Changes in Financial Position, Liquidity and Capital Resources

During the first six months of fiscal 2001, the Company generated $106.6 million
of cash from operations. This cash was primarily used to fund the purchase of
$66.6 million of systems, equipment and other assets relating to contracts and
to repay $18.5 million of long-term debt.

Trade accounts receivable decreased by $10.3 million, from $115.4 million at
February 26, 2000 to $105.1 million at August 26, 2000, primarily due to
collections on product sales recorded in fiscal 2000.

Inventories increased by $5.6 million, from $67.4 million at February 26, 2000
to $73.0 million at August 26, 2000, primarily due to spending related to the
Company's product sale contract in France, expected to be recorded in the fourth
quarter of next fiscal year.

The cost of systems, equipment and other assets relating to contracts increased
by $33.4 million, from $1,231.8 million at February 26, 2000 to $1,265.2 million
at August 26, 2000. This increase reflects the continuing installation of a new
lottery system in Illinois and the expansion of a lottery system in Brazil.

Investments in and advances to unconsolidated affiliates increased by $9.3
million, from $25.9 million at February 26, 2000 to $35.2 million at August 26,
2000, primarily due to the Company's previously announced investment in Indicii
Salus, a leading Internet security company.

Other assets decreased by $15.5 million, from $119.3 million at February 26,
2000 to $103.8 million at August 26, 2000, primarily due to the return of
deposits on corporate aircraft that was disposed of in August 2000.

Accounts payable decreased by $12.7 million, from $53.1 million at February 26,
2000 to $40.4 million at August 26, 2000, primarily due to the timing of
payments relating to ongoing lottery system installations.

Accrued expenses increased by $9.5 million, from $44.9 million at February 26,
2000 to $54.4 million at August 26, 2000, primarily due to the estimated loss
provision on the project the Company is currently implementing in New South
Wales, Australia.

As previously discussed, the Company recorded a $40.0 million special charge in
the second quarter of fiscal 2001. The remaining current liability balance at
August 26, 2000 was $21.6 million, primarily consisting of severance payments to
be made to terminated employees and costs associated with the termination of
consulting contracts.

Income taxes payable (which are reported net of income tax refunds receivable)
decreased by $18.7 million, from $49.4 million at February 26, 2000 to $30.7
million at August 26, 2000, primarily due to foreign taxes paid on current and
prior year foreign earnings.

The Company's business is capital-intensive. Although it is not possible to
estimate precisely due to the nature of the business, the Company currently
anticipates that the level of capital expenditures for systems, equipment and
other assets relating to contracts required during fiscal 2001 will be in a
range of $155.0 million to $165.0 million. The principal sources of liquidity
for the Company are expected to be cash generated from operations and borrowings
under the Company's Credit Facility. As of August 26, 2000 the Company had
utilized approximately $31.0 million of its $400 million Credit Facility. The
Company currently expects that its cash flow from operations and available
borrowings under its Credit Facility will be sufficient to fund its anticipated
working capital and ordinary capital expenditure needs, to service its debt
obligations and to fund anticipated internal growth in the foreseeable future.


                                      -16-
<PAGE>   17
Market Risk Disclosures

The primary market risk inherent in the Company's financial instruments and
exposures is the potential loss arising from adverse changes in interest rates
and foreign currency rates. The Company's exposure to commodity price changes is
not considered material and is managed through its procurement and sales
practices. The Company did not own any marketable equity securities during the
first six months of fiscal 2001.

Interest rates

Interest rate market risk is estimated as the potential change in the fair value
of the Company's total debt or current earnings resulting from a hypothetical
10% adverse change in interest rates. At August 26, 2000, after taking into
consideration $150.0 million of interest rate swaps, the estimated fair value of
the Company's fixed rate debt approximated $290.6 million. A hypothetical 10%
increase in interest rates would change the estimated fair value of the
Company's fixed rate debt to $288.2 million and a hypothetical 10% decrease in
interest rates would change the estimated fair value of the Company's fixed rate
debt to $293.2 million. An independent investment banker determined the
estimated fair value amounts.

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

The Company uses various techniques to adjust the risk associated with future
changes in interest rates, including entering into interest rate swaps and the
private placement of fixed rate debt.

Foreign Currency Exchange Rates

Foreign exchange exposures arise from current transactions and anticipated
transactions denominated in a currency other than an entity's functional
currency and from the translation of foreign currency balance sheet accounts
into United States dollar balance sheet accounts.

The Company seeks to manage its foreign exchange risk by attempting to secure
payment from its customers in United States dollars, by sharing risk with its
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 the
Company's foreign currency revenues are payable in the local currencies.
Whenever possible, the Company negotiates clauses into its contracts that allow
for price adjustments should a material change in foreign exchange rates occur.

The Company, from time to time, enters into foreign currency exchange and option
contracts to reduce the exposure associated with current transactions and
anticipated transactions denominated in foreign currencies. However, the Company
does not engage in currency speculation. At August 26, 2000, a hypothetical 10%
adverse change in foreign exchange rates would result in a translation loss of
$16.8 million that would be recorded in the equity section of the Company's
balance sheet.

At August 26, 2000, a hypothetical 10% adverse change in foreign exchange rates
would result in a net transaction loss of $2.7 million, which would be recorded
in current earnings after considering the effects of foreign exchange contracts
currently in place.

At August 26, 2000, a hypothetical 10% adverse change in foreign exchange rates
would result in a net reduction of cash flows from anticipated foreign currency
service revenues in fiscal 2001 by $5.8 million


                                      -17-
<PAGE>   18
after considering the effects of foreign exchange contracts currently in place.
The percentage of fiscal 2001 anticipated cash flows that were hedged varied
throughout the first six months of fiscal 2001, but averaged 18%.

As of August 26, 2000, the Company had contracts for the sale of foreign
currency of approximately $77.2 million (primarily South African rand, Spanish
pesetas and Australian dollars) and contracts for the purchase of foreign
currency of approximately $52.5 million (primarily pounds sterling, Mexican
pesos, and Irish punts).


Item 3.  Quantitative and Qualitative Disclosures about Market Risk

See "Management's Discussion and Analysis of Financial Condition and Results of
Operations - Market Risk Disclosures" in Part I, Item 2 herein.


                                      -18-
<PAGE>   19
PART II.  OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS

Since July 1994, the United Kingdom National Lottery has been operated under a
license held by Camelot Group Plc ("Camelot"). During the entire term of this
license, which expires in September 2001, the Company has provided lottery goods
and services to Camelot under technology supply and services agreements.
Responsibility for the award of a new license with effect from October 1, 2001
lies with the National Lottery Commission (the "NLC"), the United Kingdom
lottery regulatory authority. In 1999, the NLC established a competitive
procedure for the award of the new license, and two bidders, Camelot and The
People's Lottery ("TPL"), subsequently submitted bids for the new license.
Camelot's bid is supported by agreements with the Company pursuant to which the
Company has contracted to continue to supply lottery goods and services to
Camelot during the term of the new license in the event that Camelot is awarded
the new license.

As previously publicly reported, in or around April or May 2000, the NLC
commenced an investigation into a lottery terminal software malfunction in the
United Kingdom in which, under certain rare circumstances, a duplicate
transaction was recorded on the Company's central system while only one ticket
was presented to the retailer. The software malfunction resulted in what is
believed to be a relatively small amount of overcharges to lottery retailers
with respect to the duplicate transactions and overpayments or underpayments to
certain prizewinners. The Company first identified this software malfunction in
the United Kingdom in June 1998 and corrected the malfunction in July 1998, but
without notifying Camelot or the NLC, as it should have done. The Company, which
has fully cooperated with the NLC's investigation, has undertaken to implement a
number of measures respecting its corporate compliance and governance functions
and software development processes in the wake of the investigation and is
scheduled to review with the NLC in November 2000 the adequacy, and the status
of implementation, of its undertakings. The Company has also agreed to reimburse
players and retailers for any financial losses incurred by virtue of the
software malfunction. Payment by the Company of these reimbursement amounts will
not have a material adverse effect on the Company.

In late July 2000, the NLC sent a letter to the Company advising the Company
that, in light of the undertakings and other materials which it had received
from the Company and Camelot, the NLC had decided not to proceed with a possible
determination that the Company was not a "fit and proper person" to manage part
of the business of running the National Lottery. The statute governing operation
of the National Lottery provides that the NLC may not grant a license to run the
National Lottery if any person who would manage any part of the business of
running the National Lottery in connection with such license is not a "fit and
proper person". Moreover, the NLC has discretion to revoke any license granted
to run the National Lottery should any person involved in managing the Lottery,
or some part of it, be not fit and proper.

On August 23, 2000, the NLC announced that it had decided that: (i) neither
Camelot's bid nor the bid submitted by TPL was acceptable, and that,
accordingly, the competitive procedure for the new license was at an end; and
(ii) the NLC would proceed on the basis of a new procedure under which it would
negotiate exclusively with TPL for one month. In the Statement of Reasons which
accompanied the NLC's August 23, 2000 announcement, the NLC expressed its
unresolved concerns about the Company, largely as a result of the Company's
actions with respect to the software malfunction and its aftermath, and stated
that it is separately considering the issue of breaches by Camelot of the terms
of its existing license arising from the software incident. The NLC also pointed
out in the Statement of Reasons concerns that it had with TPL's bid, but noted
that TPL's bid might well have generated better returns for good causes than
Camelot's bid. Promptly after the NLC's announcement, Camelot initiated legal
proceedings in the United Kingdom challenging the legality of the NLC's decision
to initiate a new procedure of negotiation with TPL to the exclusion of Camelot.
On September 21, 2000, the High Court of Justice (Queen's Bench Division)
overturned the NLC's August 23, 2000 decision to negotiate exclusively with TPL
on the grounds that


                                      -19-
<PAGE>   20
the procedure decided on by the NLC was "conspicuously unfair" to Camelot and
directed that the Commission enter into an exclusive thirty-day negotiation
period commencing September 25, 2000 so as to afford Camelot the same
opportunity granted to TPL to improve its bid to address the Commission's
concerns. The Court's judgment makes clear that it is up to the NLC to decide
which bidder is to receive the new license at the end of the NLC's one-month
negotiation with Camelot. On October 4, 2000, Dame Helena Shovelton resigned as
chairman of the NLC in the wake of media coverage critical of her handling of
the competitive procedure for the new license.

It is uncertain whether Camelot or TPL will receive the award of the new
license. Moreover, the NLC is expected to issue a report respecting the software
incident, and it is uncertain what this report will contain or what actions, if
any, the NLC may take. In light of these uncertainties, there can be no
assurance that Camelot will not seek to assert claims against the Company with
respect to the software incident and the ultimate outcome of the new license
procedure. Nor can there be any assurance that the Company's ability to retain
existing contracts and to obtain new or renewal contracts will be unaffected by
these developments.

In August 2000, a shareholder class action lawsuit was brought against the
Company, the Company's former Chairman and Chief Executive Officer, William Y.
O'Connor, and the Company's current Chairman, W. Bruce Turner, in the U.S.
District Court of Rhode Island relating to various Company announcements made
between April 11, 2000 and July 25, 2000. The complaint filed in the case,
Sandra Kafenbaum, individually and on behalf of all others similarly situated,
v. GTECH Holdings Corporation, William Y. O'Connor and W. Bruce Turner,
generally alleges that the defendants violated federal securities laws
(including Section 10(b) of the Securities Exchange Act of 1934) by making
allegedly false and misleading statements (including statements alleged to be
overly optimistic respecting certain lottery contract awards to the Company and
respecting the Company's prospects in certain non-lottery business lines and
investments) while failing to disclose in a timely manner certain allegedly
material adverse information that it purportedly had a duty to disclose
(including as to an alleged inability to close certain contract awards and as to
certain alleged cost overruns). The complaint seeks to recover monetary damages
from the Company and the individual defendants. The Company believes that this
lawsuit is without merit and intends to vigorously defend itself and the other
defendants in this matter.

In September 2000, the Company's Brazilian subsidiary ("GTECH Brasil") received
a notice from the lottery authority of the Brazilian state of Minas Gerais
assessing penalties of approximately $16,000,000 stemming from certain alleged
breaches by GTECH Brasil of its contract with the Minas Gerais lottery
authority. GTECH Brasil has denied the substantive allegations of, and has
raised certain procedural objections to, the assessment notice. The Company
believes that the allegations made by the Minas Gerais lottery authority are
without merit and intends to defend itself in any proceedings resulting from
this notice.

The case captioned Rumsey Indian Rancheria v. Wilson, involving a suit by
several California Indian tribes against the State and Governor of California
under the federal Indian Gaming Regulatory Act in which the Company was
considering intervening, has now been remanded to the District Court, which has
vacated its former judgment and has entered a judgment declaring that Indian
tribes are authorized to operate slot machines, lotteries and certain other
forms of gaming on Indian lands in California. This effectively eliminates any
need for the Company to intervene in the case. See Part I, Item 3 - "Legal
Proceedings" and Note G to the consolidated financial statements, included in
the Company's fiscal 2000 Annual Report on Form 10-K for a description of the
background to this case.

For information respecting certain other legal proceedings, refer to Part I,
Item 1 - "Certain Factors That May Affect Future Performance - Maintenance of
Business Relationships and Certain Legal Matters" and Part I, Item 3 - "Legal
Proceedings" in the Company's fiscal 2000 Annual Report on Form 10-K; and Note G
to the consolidated financial statements included in the Company's fiscal 2000
Annual Report on Form 10-K; and Part II, Item 1 - "Legal Proceedings" included
in the Company's Quarterly Report on Form 10-Q for the quarterly period ended
May 27, 2000.


                                      -20-
<PAGE>   21
Item 2.  CHANGES IN SECURITIES

(c)For the six months ended August 26, 2000, 1,730 shares of the Company's
   unregistered common stock vested under stock award plans. Pursuant to the
   terms of these plans the shares were issued with no cash consideration to the
   Company. Registration of such shares was not required because the transaction
   did not constitute a "sale" under Section 2 (3) of the Securities Act of 1933
   or, alternatively, the transaction was exempt pursuant to the private
   offering provisions of the Act and the rules thereunder.


Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

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

               3    Amended and Restated By-Laws of the Company

               10.1 Severance Agreement and Release, dated as of July 5, 2000,
                    by and among the Company, GTECH Corporation and William Y.
                    O'Connor

               10.2 Resignation and Acceptance, dated as of July 5, 2000, by and
                    between Steven P. Nowick and the Company

               10.3 Agreement, dated as of August 9, 2000, by and between the
                    Company and W. Bruce Turner

               10.4 The Company's 2000 Restricted Stock Plan, and form of
                    Executive Restricted Stock Agreement

               27   Financial Data Schedule


         (b)   The Company did not file any reports on form 8-K during the
               quarter to which this report relates


                                      -21-
<PAGE>   22
                                   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:  October 6, 2000              By /s/ Jaymin B. Patel
                                    ------------------------------------------
                                    Jaymin B. Patel, Senior Vice President
                                    and Chief Financial Officer (Principal
                                    Financial Officer)



Date:  October 6, 2000              By /s/ Robert J. Plourde
                                    ------------------------------------------
                                    Robert J. Plourde, Vice President and
                                    Corporate Controller (Principal Accounting
                                    Officer)


                                      -22-