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                                                                      EXHIBIT 10








                           GTECH HOLDINGS CORPORATION
                                AND SUBSIDIARIES

                            INCOME DEFERRAL PLAN 1998
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                   GTECH HOLDINGS CORPORATION AND SUBSIDIARIES
                            INCOME DEFERRAL PLAN 1998

                           Effective December 15, 1998

                  1. PURPOSE. The purpose of this GTECH Holdings Corporation and
Subsidiaries Income Deferral Plan 1998 ("Plan") is to provide eligible key
employees of GTECH Holdings Corporation and its subsidiaries ("Company") with an
opportunity to defer compensation to be earned by them from the Company as a
means of saving for retirement or other future purposes. For purposes of the
Employee Retirement Income Security Act of 1974, as amended, the Company intends
that this Plan be considered an unfunded arrangement, maintained primarily to
provide deferred compensation benefits for members of a select group of
management or highly compensated employees of the Company.

                  2. DEFINITION OF TERMS. Certain words and phrases are defined
when first used in later paragraphs of this Plan. In addition, the following
words and phrases when used herein, unless the context clearly requires
otherwise, shall have the following respective meanings:

                     (a)  ACCRUED BENEFIT: The sum of all Deferred Amounts
                          credited to the Participant's Deferred Income Account
                          and due and owing to the Participant or his
                          beneficiaries pursuant to this Plan, together with
                          Investment Returns thereon calculated as set forth in
                          paragraph 4 hereof, minus any distributions hereunder.

                     (b)  AFFILIATE: Any corporation, partnership, joint
                          venture, association, or similar organization or
                          entity, the employees of which would be treated as
                          employed by the Company under Section 414(b) and
                          414(c) of the Code.

                     (c)  CODE: The Internal Revenue Code of 1986, as amended.

                     (d)  COMPENSATION COMMITTEE: The Compensation Committee of
                          the Board of Directors of the Company.

                     (e)  DEFERRED AMOUNTS: The amounts of Income actually
                          deferred less any and all deductions required to be
                          made by applicable law.

                     (f)  DEFERRED INCOME ACCOUNT: Book entries maintained by
                          the Company reflecting Deferred Amounts and Investment
                          Returns thereon; provided, however, that the existence
                          of such book entries and the Deferred Income Account
                          shall not create and shall not be deemed to create a
                          trust of any kind, or a fiduciary relationship between
                          the Company and the Participant, his designated
                          beneficiary, or other beneficiaries under this Plan.

                     (g)  EFFECTIVE DATE: December 15, 1998.

                     (h)  ELECTION OF DEFERRAL: A written notice filed by the
                          Participant with the Compensation Committee of the
                          Company in substantially

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                          the form attached hereto as Exhibit A, respecting
                          Income to be deferred in any Plan Year.

                     (i)  INCOME: Total salary, commissions and bonuses of the
                          Participant paid or accrued by the Company, exclusive
                          of Accrued Benefits and any employer contributions or
                          payments to any other trust, fund, agreement or plan
                          providing retirement, pension, profit sharing, health,
                          welfare, death, insurance or similar benefits.

                     (j)  PARTICIPANT: Each employee who:

                          (i)    is an executive officer, officer or key
                          employee of the Company or an Affiliate of the
                          Company;

                          (ii)   has been selected and approved by the
                          Compensation Committee to participate in the Plan, as
                          reported in the minutes of the Compensation
                          Committee; and

                          (iii)  has elected to defer payment of a percentage of
                          his Income under the Plan.

                     (k)  PLAN YEAR: Any fiscal year of the Company.

                  3. DEFERRED INCOME. Each Participant shall be entitled to
elect, in accordance with Section 5, to defer into his Deferred Income Account
from between five percent (5%) to one-hundred percent (100%), in whole
percentages, of the base salary that the Participant would otherwise be entitled
to receive from and after the date of election from the Company in any given
Plan Year. In addition, prior to the start of a Plan Year, the Participant shall
be entitled to elect to defer from between one percent (1%) to one-hundred
percent (100%), in whole percentages, of any commissions and/or bonuses that the
Participant would otherwise be entitled to receive from the Company with respect
to such Plan Year. The Participant's Deferred Amounts shall be credited to the
Participant's Deferred Income Account as of the dates such Deferred Amounts
would, but for such deferral, be payable to the Participant. Except as provided
in Section 9 hereof (with respect to certain financial hardships), an Election
of Deferral with respect to a Plan Year, once made, shall be irrevocable.

                  4. INVESTMENT RETURNS ON DEFERRED AMOUNTS. The Company hereby
agrees that it will credit Deferred Amounts in each Participant's Deferred
Income Account with investment gains thereon and debit Deferred Amounts in the
Participant's Deferred Income Account with investment losses thereon
(collectively, "Investment Returns") from and after the dates Deferred Amounts
are credited to the Deferred Income Account. Investments Returns on Deferred
Amounts shall accrue commencing on the date the Deferred Income Account first
has a positive balance. Investment Returns shall be calculated at a rate
computed as if such amounts had been invested in hypothetical investments
selected by the Participant from various investment options offered by the
Company in its sole discretion. An investment election shall remain effective
until a subsequent properly filed election becomes effective. If the Participant
fails to file an initial election, Investment Returns shall be calculated based
on the average rate


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earned by all the investment options offered by the Company under the Plan until
such time as an investment election by the Participant becomes effective.

                  5. ELECTION TO DEFER INCOME.

                     (a) ELECTION PROCEDURE. The Participant may elect to defer
Income hereunder by filing an Election of Deferral. With respect to base salary
to be earned by a Participant during a Plan Year, an Election of Deferral may be
filed prior to the start of, or at any time during, such Plan Year, provided
that if such an Election of Deferral is filed after the start of a Plan Year, it
shall only be effective with respect to base salary earned after the filing date
of the Election of Deferral. With respect to commissions and/or bonuses to be
earned by a Participant with respect to a Plan Year, an Election of Deferral may
only be filed prior to the start of the Plan Year to which such bonuses or
commissions relate. (For example, Participants may, prior to the start date of
the Plan Year next following the Effective Date of the Plan, [i.e. February 28,
1999], file an Election of Deferral with respect to any commissions and/or
bonuses to be earned with respect to the Company's fiscal year ending in
February 2000. Participants may not, however, file an Election of Deferral with
respect to any commissions and/or bonuses to be paid with respect to the
Company's fiscal year ending February 27, 1999). Each Election of Deferral shall
be effective only in the Plan Year to which such Election of Deferral applies
and, as provided above, shall generally be irrevocable once made.

                     (b) DURATION OF DEFERRAL. At the time each Election of
Deferral is filed, the Participant must elect the period of deferral for Income
deferred pursuant to such Election of Deferral. With respect to each Election of
Deferral, the Participant may elect to defer Income earned in the Plan Year to
which such Election of Deferral applies for one of the following time periods
("Deferral Period"):

                         (1) Five (5) years;

                         (2) Eight (8) years;

                         (3) Ten (10) years;

                         (4) Until attainment of age fifty-five (55); provided
that the Participant is under age 50 at the time of such election; or

                         (5) Until attainment of age sixty-five (65); provided
that the Participant is under age 60 at the time of such election.

                         (6) Until retirement in accordance with the Company's
policies respecting retirement from time to time in effect.

                  The period of deferral may be different as to each Election of
Deferral filed by the Participant with the Company; provided that, once an
Election of Deferral is filed by the Participant, the Deferral Period for Income
earned in the Plan Year to which such Election of Deferral applies shall be
irrevocable.


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                  6. DEFERRED BENEFIT. The Company agrees that upon the
expiration of a Deferral Period, the Company shall thereafter pay to the
Participant that portion of the Participant's Accrued Benefit which relates to
Deferred Amounts and Investment Returns thereon for which the Deferral Period
has expired ("Deferred Income Benefit"). At the time each Election of Deferral
is filed, the Participant must elect the Deferred Income Benefit payment form
for Income deferred pursuant to such Election of Deferral. Such election as to
payment form may be changed by the Participant by filing a written notice of the
desired change with the Compensation Committee at least one year prior to the
end of the Deferral Period. A Deferred Income Benefit shall be payable in the
form of either:

                     (a) a single sum, payable on the first day of the month
following the expiration of a Deferral Period; or

                     (b) a monthly annuity for a period of five (5), eight (8)
or ten (10) years, commencing with the first day of the first month following
the expiration of the Deferral Period. The Participant shall elect whether the
annuity payments are to be fixed or variable. Fixed annuity payments shall be
monthly payments which remain level during the payout period and which are based
on an effective annual rate of interest to be determined by the Company as of
the date of the expiration of the Deferral Period. Variable annuity payments
shall be monthly payments, commencing on the first day of the first month
following the expiration of the Deferral Period, which fluctuate each Plan Year
based on the average rate earned in the preceding Plan Year on all investments
offered by the Company as investment options pursuant to Section 4 above.

                  7. DISABILITY BENEFIT. Notwithstanding any other provision in
the Plan to the contrary, upon a Participant's long term disability, the
Participant shall be entitled to receive his entire Accrued Benefit, in a single
sum, payable on the first day of the first month following a determination that
the Participant has a long term disability. A long term disability shall have
the meaning of such term as defined in the long-term disability plan, as amended
from time to time, maintained by the Company.

                  8. DEATH BENEFITS.

                     (a) CALCULATION. In the event of the Participant's death
(whether prior to or after the commencement of Deferred Income Benefits), the
Company shall pay the sum of the balance, if any, remaining in the Participant's
Deferred Income Account, in a single lump sum, payable on the first day of the
first month following the Participant's date of death, to the Participant's
designated beneficiary, in accordance with the last such designation received by
the Company from the Participant prior to his death. If no such designation has
been received by the Company from the Participant prior to his death, the
balance of said payments shall be continued to the Participant's then living
spouse, or if the Participant is not survived by a spouse, or if such spouse
does not live to receive all such payments, any balance of the payments shall be
made in a single lump sum to the estate of the Participant on the first day of
the first month following the Participant's death or spouse's death, whichever
applies.

                     (b) BENEFICIARY DESIGNATION. The Participant shall have the
right, at any time, to submit in substantially the form attached hereto as
Exhibit B, a written designation of primary and secondary beneficiaries to whom
payment under this Plan shall be made in the


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event of his death prior to complete distribution of the benefits due and
payable under the Plan. Each beneficiary designation shall become effective only
when receipt thereof is acknowledged in writing by the Company.

                  9.  HARDSHIP BENEFIT. In the event the Participant suffers a
Financial Hardship (as hereinafter defined), the Compensation Committee may, if
it deems advisable in its sole and absolute discretion, distribute to or utilize
on behalf of the Participant as a hardship benefit (the "Hardship Benefit") any
portion of the Participant's Deferred Income Account as of the date a Hardship
Benefit is distributed or utilized. Any Hardship Benefit shall be distributed or
utilized at such times as the Compensation Committee shall determine, and the
Accrued Benefit in the Participant's Deferred Income Account shall be reduced by
the amount so distributed and/or utilized. Financial Hardship shall mean an
immediate and heavy financial need of the Participant on account of an
unforeseeable emergency as determined by the Compensation Committee upon
application by the Participant.

         In addition to or in lieu of granting a distribution of a Hardship
Benefit, upon a showing of a financial hardship, the Compensation Committee,
may, if it deems advisable in its sole and absolute discretion, permit or
require a discontinuance of deferrals in a Plan Year.

                  10. TERMINATION BENEFIT.

                      (a) VOLUNTARY OR INVOLUNTARY (BUT NOT FOR CAUSE). In the
event of the Participant's termination of employment, other than for death,
disability or cause pursuant to Section 10.b. below, the Company shall pay to
the Participant the sum of the balance, if any, remaining in the Participant's
Deferred Income Account as of the date of Participant's termination of
employment. The form of payment shall be in a single lump sum, payable within
ninety (90) days of the date the Company receives the Participant's written
resignation, or informs the Participant of the Company's decision to terminate
the Participant.

                      (b) INVOLUNTARY. In the event of the Participant's
termination of employment for cause, the Company shall pay to the Participant
the sum of:

                          (i) with respect to those portions of Participant's
Accrued Benefit for which the Deferral Period has expired and which are being
paid in the form of an annuity, the present value (calculated using reasonable
actuarial assumptions established for such purpose by the Company) of that
portion of the future Deferred Income Benefit payments payable to the
Participant attributable to Deferred Amounts only; plus

                          (ii) with respect to those portions of Participant's
Accrued Benefit for which the Deferral Period has not expired, the balance, if
any, remaining in the Participant's Deferred Income Account attributable to
Deferred Amounts only.

The form of payment shall be in a single lump sum, payable as of the date which
is ninety (90) days after the date of the Participant's termination of
employment. The portion of the Participant's Accrued Benefit which represents
Investment Returns shall be forfeited by the Participant.


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                  11. CHANGE IN CONTROL BENEFIT. In the event of a change in
control, the Participant's Accrued Benefit shall be immediately due and payable.
A change in control means the happening of any of the following:

                      (a) The members of the Board of Directors of the Company
at the beginning of any consecutive twenty-four calendar month period (the
"Incumbent Directors") cease for any reason other than due to death to
constitute at least a majority of the members of the Board of Directors of the
Company, provided that any director whose election, or nomination for election
by the Company's stockholders, was approved by a vote of at least a majority of
the members of the Board of Directors of the Company then still in office who
were members of the Board of Directors of the Company at the beginning of such
twenty-four calendar month period, shall be deemed an Incumbent Director;

                      (b) Any "person", including a "group" (as such terms are
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 ("Act"),
but excluding the Company, any of its Affiliates, or any employee benefit plan
of the Company or any of its Affiliates) is or becomes the "beneficial owner"
(as defined in Rule 13(d)(3) under the Act), directly or indirectly, of
securities of the Company representing the greater of 30% or more of the
combined voting power of the Company's then outstanding securities;

                      (c) The stockholders of the Company shall approve a
definitive agreement (1) for the merger or business combination of the Company
with or into another corporation if (A) a majority of the directors of the
surviving corporation were not directors of the Company immediately prior to the
effective date of the merger or (B) the stockholders of the Company immediately
prior to the effective date of such merger own less than 50% of the combined
voting power in the then outstanding securities in such surviving corporation or
(2) for the sale or other disposition of all or substantially all of the assets
of the Company; or

                      (d) The purchase of the common stock of the Company
pursuant to any tender or exchange offer made by any "person", including a
"group" (as such terms are used in Section 13(d) and 14(d) of the Act, other
than the Company, any of its Affiliates, or any employee benefit plan of the
Company or any of its Affiliates), for 30% more of the common stock of the
Company.

                  12. IMMEDIATE BENEFIT; CHANGE IN TAX LAW.

                      (a) In the event that the benefits to the Participants
under this Plan are taxable for federal income tax purposes to the Participants
at a time other than the time the Participants actually receive such benefits,
the Company shall as promptly as practicable pay to the Participants the amounts
so determined to be taxable and the Company's obligations to the Participants
under this Plan shall be reduced by a corresponding amount.

                      (b) In the event that the benefits to Participants under
this Plan are abrogated by virtue of a change in the federal income tax law, as
determined by the Compensation Committee in its sole discretion, the Company
shall as promptly as practicable pay to the Participants in a single sum the
amounts credited to the Participants' respective


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Deferred Income Accounts and thereupon the Compensation Committee may, in its
sole discretion, terminate the Plan.

                  13. OFFSET FOR OBLIGATIONS TO COMPANY. If, at such time as the
Participant becomes entitled to benefit payments hereunder, the Participant has
any debt, obligation or other liability representing an amount owing to the
Company or an Affiliate of the Company, and if such debt, obligation, or other
liability is due and owing at the time benefit payments are payable hereunder,
the Company may offset the amount owing it or an Affiliate against the amount of
benefits otherwise distributable hereunder.

                  14. NO TRUST CREATED. Nothing contained in this Plan, and no
action taken pursuant to its provisions by either party hereto shall create, or
be construed to create, a trust of any kind, or a fiduciary relationship between
the Company and the Participant, his designated beneficiary, other beneficiaries
of the Participant or any other person.

                  15. BENEFITS PAYABLE ONLY FROM GENERAL CORPORATE ASSETS;
UNSECURED GENERAL CREDITOR STATUS OF PARTICIPANT.

                      (a) The payments to the Participant or his designated
beneficiary or any other beneficiary hereunder shall be made from assets which
shall continue, for all purposes, to be a part of the general, unrestricted
assets of the Company; no person shall have any interest in any such assets by
virtue of the provisions of this Plan. The Company's obligation hereunder shall
be an unfunded and unsecured promise to pay money in the future. To the extent
that any person acquires a right to receive payments from the Company under the
provisions hereof, such right shall be no greater than the right of any
unsecured general creditor of the Company; no such person shall have nor acquire
any legal or equitable right, interest or claim in or to any property or assets
of the Company.

                      (b) In the event that, in its discretion, the Company
purchases an insurance policy or policies insuring the life of the Participant
(or any other property), to allow the Company to recover the cost of providing
benefits, in whole or in part, hereunder, neither the Participant, his
designated beneficiary nor any other beneficiary shall have any rights
whatsoever therein or in the proceeds therefrom. The Company shall be the sole
owner and beneficiary of any such insurance policy and shall possess and may
exercise all incidents of ownership therein. No such policy, policies or other
property shall be held in any trust for the Participant or any other person nor
as collateral security for any obligation of the Company hereunder.

                  16. NO CONTRACT OF EMPLOYMENT. Nothing contained herein shall
be construed to be a contract of employment for any term of years, nor as
conferring upon the Participant the right to continue to be employed by the
Company in his present capacity, or in any capacity. It is expressly understood
by the parties hereto that this Plan relates to the payment of deferred
compensation for the Participant's services, payable after termination of his
employment with the Company, and is not intended to be an employment contract.

                  17. BENEFITS NOT TRANSFERABLE. Neither the Participant, his
designated beneficiary, nor any other beneficiary under this Plan shall have any
power or right to transfer, assign, anticipate, hypothecate or otherwise
encumber any part or all of the amounts payable


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hereunder. No such amounts shall be subject to seizure by any creditor of any
such beneficiary, by a proceeding at law or in equity, nor shall such amounts be
transferable by operation of law in the event of bankruptcy, insolvency or death
of the Participant, his designated beneficiary, or any other beneficiary
hereunder. Any such attempted assignment or transfer shall be void.

                  18. DETERMINATION OF BENEFITS.

                      (a) CLAIM.

                      A person who believes that he is being denied a benefit to
which he is entitled under the Plan (hereinafter referred to as a "Claimant")
may file a written request for such benefit with the Compensation Committee,
setting forth his claim. The request must be addressed to the Compensation
Committee at the Company's then principal place of business.

                      (b) CLAIM DECISION.

                      Upon receipt of a claim, the Compensation Committee shall
advise the Claimant that a reply will be forthcoming within ninety (90) days and
shall, in fact, deliver such reply within such period. The Compensation
Committee may, however, extend the reply period for an additional ninety (90)
days for reasonable cause.

                      If the claim is denied in whole or in part, the
Compensation Committee shall adopt a written opinion, using language calculated
to be understood by the Claimant, setting forth:

                          (a) The specific reason or reasons for such denial;

                          (b) The specific reference to pertinent provisions of
this Plan on which such denial is based;

                          (c) A description of any additional material or
information necessary for the Claimant to perfect his claim and an explanation
why such material or such information is necessary;

                          (d) Appropriate information as to the steps to be
taken if the Claimant wishes to submit the claim for review; and

                          (e) The time limits for requesting a review under
subsection c. and for review under subsection d. hereof.

                      (c) REQUEST FOR REVIEW

                          With sixty (60) days after the receipt by the Claimant
of the written opinion described above, the Claimant may request in writing that
the Board of Directors of the Company review the determination of the
Compensation Committee. Such request must be addressed to the Secretary of the
Board of Directors of the Company, at its then principal place of business. The
Claimant or his duly authorized representative may, but need not, review the
pertinent documents and submit issues and comments in writing for consideration.
If the


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Claimant does not request a review of the Compensation Committee's determination
by the Board of Directors of the Company within such sixty (60) day period, he
shall be barred and estopped from challenging the Compensation Committee's
determination.

                      (d) REVIEW OF DECISION.

                          Within sixty (60) days after the Board of Directors'
receipt of a request for review, it will review the Compensation Committee's
determination. After considering all materials presented by the Claimant, the
Board of Directors will render a written opinion, written in a manner calculated
to be understood by the Claimant, setting forth the specific reasons for the
decision and containing specific references to the pertinent provisions of this
Plan on which the decision is based. If special circumstances require that the
sixty (60) day time period be extended, the Board of Directors will so notify
the Claimant and will render the decision as soon as possible, but no later than
one-hundred twenty (120) days after receipt of the request for review.

                  19. AMENDMENT. This Plan may be amended, altered or modified,
by the Company in its sole discretion from time to time upon execution by
written amendment.

                  20. NOTICE. Any notice, consent or demand required or
permitted to be given under the provisions of this Plan shall be in writing, and
shall be signed by the party giving or making the same. If such notice, consent
or demand is mailed to a party hereto, it shall be sent by United States
certified mail, postage prepaid, addressed to such party's last known address as
shown on the records of the Company. The date of such mailing shall be deemed
the date of notice, consent or demand. Either party may change the address to
which notice is to be sent by giving notice of the change of address in the
manner aforesaid.

                  21. GOVERNING LAW. This Plan, and the rights of the parties
hereunder, shall be governed by and construed in accordance with the laws of the
State of Rhode Island.


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                                                                    Attachment 1



         IN WITNESS WHEREOF, effective December 15, 1998, the Company has
executed this Plan as of the 17th day of December, 1998.



                                            GTECH HOLDINGS CORPORATION

                                            By: /s/ Stephen A. Davidson
                                                ------------------------
                                            Name:  Stephen A. Davidson
                                            Title: Senior Vice President