SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 10-Q


(Mark One)


  X     QUARTERLY  REPORT PURSUANT  TO  SECTION 13 OR  15(d)  OF  THE SECURITIES
-----
        EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998 OR


        TRANSITION  REPORT  PURSUANT  TO  SECTION 13 OR  15(d) OF THE SECURITIES
-----
        EXCHANGE  ACT  OF  1934  FOR  THE TRANSITION  PERIOD  FROM _____________
        TO ____________


Commission file number 0-19322


                          POWERHOUSE TECHNOLOGIES, INC.
              (Formerly known as Video Lottery Technologies, Inc.)
             (Exact name of registrant as specified in its charter)


         Delaware                                                     81-0470853
(State or other jurisdiction                                    (I.R.S. Employer
incorporation or organization)                               Identification No.)


2311 South Seventh Avenue
Bozeman, Montana                                                           59715
(Address of principal executive officers)                             (Zip code)


                                 (406) 585-6600
              (Registrant's telephone number, including area code)


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  report(s),  and (2) has  been  subject  to such  filing
requirements for the past 90 days.  Yes   X    No
                                        -----     -----

Applicable  only to  issuers  involved  in  bankruptcy  proceedings  during  the
preceding five years:

Indicate  by check mark  whether  the  registrant  has filed all  documents  and
reports  required  to be  filed by  Section  12,  13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court. Yes        No 
                          -----     -----

Applicable only to corporate issuers:

The number of shares  outstanding  the issuer's $ .01 per value Common Stock, as
of the latest practicable date of March 31, 1998, was 10,804,155 shares.

<PAGE>


                          POWERHOUSE TECHNOLOGIES, INC.
                                AND SUBSIDIARIES

                                      INDEX


                                                                           Page

PART I.  FINANCIAL INFORMATION
------------------------------

ITEM 1.  Consolidated Financial Statements

         Statements of Operations
         Three Months Ended March 31, 1998 and 1997                           4

         Balance Sheets
         March 31, 1998 and December 31, 1997                                 5

         Statement of Stockholders' Equity
         Three Months Ended March 31, 1998                                    6

         Statements of Cash Flows
         Three Months Ended March 31, 1998 and 1997                           7

         Notes to Consolidated Financial Statements                           8

ITEM 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations                                           12

ITEM 3.  Quantitative and Qualitative Disclosures About Market Risk          17


PART II. OTHER INFORMATION
--------------------------

ITEM 1.  Legal Proceedings                                                   17

ITEM 2.  Changes in Securities                                               17

ITEM 3.  Defaults Upon Senior Securities                                     17

ITEM 4.  Submission of Matters to a Vote of Security Holders                 17

ITEM 5.  Other Information                                                   17

ITEM 6.  Exhibits and Reports on Form 8-K                                    17

Signatures                                                                   18

                                       2

<PAGE>


     Powerhouse Technologies,  Inc. (the "Company") was incorporated in Delaware
in May 1991. The Company acts as a holding company for ten active  corporations.
Unless the context  otherwise  requires,  references  to the  "Company" or "PTI"
refer to Powerhouse Technologies, Inc. and its subsidiaries; references to "AWI"
refer to Automated  Wagering  International,  Inc.,  one of the Company's  three
principal  operating  subsidiaries,  which provides  on-line lottery systems and
services  primarily to  governmental  lottery  authorities;  references to "VLC"
refer to  Video  Lottery  Consultants,  Inc.,  another  of the  Company's  three
principal operating subsidiaries, which designs, manufactures and markets casino
and video lottery gaming  machines and central  control  systems;  references to
"UWS" or "United Tote" refer to United  Wagering  Systems,  Inc.,  the Company's
third principal operating  subsidiary whose operating units provide computerized
pari-mutuel  wagering  systems  for horse and  greyhound  racetracks,  off-track
betting  facilities and jai alai frontons.  The Company also owns and operates a
racetrack  facility in Sunland Park, New Mexico,  which is accounted for as part
of the UWS operating  segment.  References to the  "Subsidiaries"  refer to AWI,
VLC, UWS and the other subsidiaries of the Company.

     Certain statements in this Report on Form 10-Q constitute  "forward-looking
statements"  within the meaning of Section 27A of the Securities Act of 1933 and
Section  21E of  the  Securities  Exchange  Act of  1934.  Such  forward-looking
statements  involve  known and unknown  risks,  uncertainties  and other factors
which may cause the actual results,  performance or achievements of the Company,
or  industry  results,  to be  materially  different  from any  future  results,
performance,  or  achievements  expressed  or  implied  by such  forward-looking
statements. Such factors include, among others, the following:  general economic
and  business  conditions;   competitive  factors  in  the  industry,  including
additional  competition  from  existing  competitors  or future  entrants to the
industry; social and economic conditions;  local, state and federal regulations;
changes in business strategy or development  plans; the Company's  indebtedness;
quality of management;  availability,  terms and deployment of capital; business
abilities and judgment of personnel;  availability of qualified  personnel;  and
other factors.

                                       3

<PAGE>


                          PART I. FINANCIAL INFORMATION

ITEM 1.  CONSOLIDATED FINANCIAL STATEMENTS

                 POWERHOUSE TECHNOLOGIES, INC. AND SUBSIDIARIES
                            STATEMENTS OF OPERATIONS
                    (in thousands except for per share data)
<TABLE>
<CAPTION>

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

REVENUES:
    On-line lottery                                            $29,264              22,994
    Gaming machine and route operations                         14,379              17,739
    Wagering systems and racetrack operations                    6,587               7,271
                                                               -------              ------
                                                                50,230              48,004
                                                               -------              ------
COSTS OF REVENUES:
    On-line lottery                                             19,107              15,155
    Gaming machine and route operations                          8,046               9,238
    Wagering systems and racetrack operations                    5,499               5,639
                                                               -------              ------
                                                                32,652              30,032
                                                               -------              ------
Gross profit                                                    17,578              17,972

OTHER OPERATING EXPENSES
    Selling, general and administrative                          8,526               7,694
    Research and development                                     2,565               2,497
    Depreciation and amortization                                4,820               6,035
                                                               -------              ------
                                                                15,911              16,226
                                                               -------              ------

Earnings from operations                                         1,667               1,746
                                                               -------              ------

OTHER INCOME (EXPENSE):
    Interest and other income                                      368                 235
    Interest expense                                              (790)               (994)
                                                               -------              ------
                                                                  (422)               (759)
                                                               -------              ------

Earnings before income taxes and extraordinary item              1,245                 987

Income tax expense                                                 632                 703
                                                               -------              ------

Net earnings before extraordinary item                             613                 284

Extraordinary gain, net                                            ---              13,269
                                                               -------              ------

Net earnings                                                   $   613              13,553
                                                               =======              ======

Net earnings per share (Basic and Diluted):
     Before extraordinary item                                 $   .06                 .03
     From extraordinary item                                       ---                1.27
                                                               -------              ------
                                                               $   .06                1.30
                                                               =======              ======

Weighted average shares:
         Basic                                                  10,467              10,424
         Potential Common Stock                                    405                   9
                                                               -------              ------
         Diluted                                                10,872              10,433
                                                               =======              ======
</TABLE>

          See accompanying notes to consolidated financial statements.

                                        4

<PAGE>



                 POWERHOUSE TECHNOLOGIES, INC. AND SUBSIDIARIES
                                 BALANCE SHEETS
                        (in thousands except share data)
                                    <TABLE>
<CAPTION>

                                                                      March 31,        December 31,
                                                                         1998               1997
                                                                         ----               ----
<S>                                                                    <C>                 <C>

ASSETS
     Current assets:
         Cash and cash equivalents                                     $ 13,963             13,772
         Restricted short-term deposits                                   3,180              1,423
         Accounts receivable, net                                        20,933             25,839
         Current installments of notes receivable, net                    3,581              3,192
         Inventories                                                     19,619             15,942
         Prepaid expenses                                                 1,256              1,037
         Deferred income taxes                                           10,555             11,444
                                                                       --------            -------
     Total current assets                                                73,087             72,649
                                                                       --------            -------

     Property, plant and equipment                                      152,916            152,074
         Less accumulated depreciation                                  (91,824)           (88,914)
                                                                       --------            -------
              Net property, plant and equipment                          61,092             63,160
                                                                       --------            -------

     Restricted cash deposits                                               410              2,408
     Notes receivable, excluding current installments                     2,392              2,547
     Goodwill, net9,110                                                   9,314
     Intangible and other assets, net                                    10,746             11,319
                                                                       --------            -------
                                                                       $156,837            161,397
                                                                       ========            =======
LIABILITIES
     Current liabilities:
         Current installments of long-term debt                        $  3,497              4,381
         Accounts payable                                                 7,080              9,513
         Accrued expenses                                                19,444             21,705
                                                                       --------            -------
              Total current liabilities                                  30,021             35,599
                                                                       --------            -------

     Long-term debt, excluding current installments                      29,952             31,446
     Deferred income taxes                                               11,941             12,206
                                                                       --------            -------
              Total liabilities                                          71,914             79,251
                                                                       --------            -------

Commitments and contingencies

STOCKHOLDERS' EQUITY
     Preferred stock, $.01 par value.  Authorized 8,087,272
         shares; no shares issued                                           ---                ---
     Series A Junior Preferred stock, $.01 par value, convertible
         non-cumulative.  Authorized 1,912,728 shares                        19                 19
     Common stock, $.01 par value.  Authorized 25,000,000
         shares                                                             113                110
     Paid-in capital                                                     92,885             89,427
     Deferred restricted stock compensation                              (1,514)              (217)
     Accumulated deficit                                                 (6,580)            (7,193)
                                                                       --------            -------
              Total stockholders' equity                                 84,923             82,146
                                                                       --------            -------
                                                                       $156,837            161,397
                                                                       ========            =======
</TABLE>

          See accompanying notes to consolidated financial statements.

                                        5

<PAGE>


                 POWERHOUSE TECHNOLOGIES, INC. AND SUBSIDIARIES
                        STATEMENT OF STOCKHOLDERS' EQUITY
                      (in thousands except for share data)
<TABLE>
<CAPTION>

------------------------------------------------------------------------------------------------------------------------
                              Series A                                     Restricted                        Total
                             Preferred       Common                           Stock           Accumu-        Stock-
                               Stock          Stock         Paid-in          Compen-           lated        holders'
                             par value      par value       Capital          sation           Deficit        Equity
------------------------------------------------------------------------------------------------------------------------
<S>                                <C>            <C>         <C>               <C>            <C>             <C>

December 31, 1997                  $19            110         89,427              (217)        (7,193)         82,146

Net earnings                       ---            ---            ---               ---            613             613

Restricted stock
  issued                           ---              1          1,380            (1,381)           ---             ---

Amortization of
  deferred
  restricted stock
  compensation                     ---            ---            ---                84            ---              84

Proceeds from sale of
  common stock                     ---              2          2,078               ---            ---           2,080
                                   ---            ---         ------             -----          -----          ------

March 31, 1998                     $19            113         92,885            (1,514)        (6,580)         84,923
                                   ===            ===         ======             =====         ======          ======
------------------------------------------------------------------------------------------------------------------------
</TABLE>




1998 Share Data(1)
<TABLE>
<CAPTION>

                                                             Series A                           Common
Balance                                             Preferred Stock Issued                   Stock Issued
-------                                             ----------------------                   ------------
<S>                                                          <C>                              <C>

December 31, 1997                                            1,912,728                        11,023,406
Restricted Common Stock issued                                     ---                           106,000
Common Stock issued                                                ---                           220,203
                                                             ---------                        ----------

March 31, 1998                                               1,912,728                        11,349,609
                                                             =========                        ==========
</TABLE>




(1)  1,912,728  shares of Series A Preferred  Stock and 545,454 shares of common
     stock are held in treasury as collateral  for a note payable (see Note 2 to
     Financial Statements).

          See accompanying notes to consolidated financial statements.

                                        6


<PAGE>


                 POWERHOUSE TECHNOLOGIES, INC. AND SUBSIDIARIES
                            STATEMENTS OF CASH FLOWS
                                 (in thousands)
<TABLE>
<CAPTION>

                                                                 Three months ended March 31,
                                                                 ----------------------------
                                                                    1998                1997
                                                                    ----                ----
<S>                                                               <C>                 <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
     Net earnings                                                 $   613              13,553
     Adjustments to reconcile net earnings to net cash
         provided by operating activities:
         Depreciation and amortization                              4,820               6,035
         Extraordinary gain, net                                      ---             (13,269)
         Other, net                                                   135                  31
     Changes in operating assets and liabilities:
         Receivables, net                                           4,672                (940)
         Inventories                                               (3,276)              3,778
         Prepaid expenses                                            (219)               (277)
         Accounts payable                                          (2,434)               (722)
         Accrued expenses                                          (2,065)             (1,231)
         Income taxes                                                 624               4,504
                                                                  -------              ------
Net cash provided by operating activities                           2,870              11,462
                                                                  -------              ------

CASH FLOWS FROM INVESTING ACTIVITIES:
         Capital expenditures                                      (2,493)             (2,141)
         Expenditures on intangible and other noncurrent assets      (115)               (375)
         Proceeds from sales of equipment                              97                   5
         Change in restricted cash deposits                           241                 (16)
                                                                  -------              ------
Net cash used in investing activities                              (2,270)             (2,527)
                                                                  -------              ------

CASH FLOWS FROM FINANCING ACTIVITIES:
         Net payments on notes payable                                ---              (6,000)
         Repayments of long-term debt                              (2,489)             (3,024)
                                                                                               -
         Proceeds from issuance of common stock                     2,080                 ---
                                                                  -------              ------

Net cash used in financing activities                                (409)             (9,024)
                                                                  -------              ------

Net increase (decrease) in cash and cash equivalents                  191                 (89)

Cash and cash equivalents, beginning of period                     13,772               4,322
                                                                  -------              ------

Cash and cash equivalents, end of period                          $13,963               4,233
                                                                  =======              ======
</TABLE>

          See accompanying notes to consolidated financial statements.

                                        7

<PAGE>


                 POWERHOUSE TECHNOLOGIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     a.   Presentation

          The  consolidated   financial   statements  include  the  accounts  of
     Powerhouse  Technologies,  Inc.  and  its  subsidiaries  (collectively  the
     "Company").  All significant  intercompany  balances and transactions  have
     been eliminated in consolidation.

          The  consolidated   balance  sheet  as  of  March  31,  1998  and  the
     consolidated  statements of operations  and cash flows for the  three-month
     periods  ended March 31, 1998 and 1997 and the  consolidated  statement  of
     stockholders'  equity for the three-month  period ended March 31, 1998 have
     been prepared by the Company,  without audit. In the opinion of management,
     all  adjustments  (consisting of normal  recurring  accruals)  necessary to
     present fairly the financial position, results of operations and cash flows
     as of and for the periods  indicated  have been made. The December 31, 1997
     consolidated   balance  sheet  was  derived  from  consolidated   financial
     statements  audited  by  KPMG  Peat  Marwick  LLP in  connection  with  the
     Company's annual audit.

     b.   Earnings Per Share

          Basic  earnings  per share  includes  no  dilution  and is computed by
     dividing income  available to common  stockholders by the weighted  average
     number of common shares  outstanding for the period.  Diluted  earnings per
     share reflects the potential dilution of securities that could share in the
     earnings  of the  Company.  Potential  common  stock is  excluded  from the
     weighted   average  share   calculations   when  the  inclusion   would  be
     anti-dilutive.

     c.   Accounting Pronouncements Not Yet Adopted

          The  American  Institute  of  Certified  Public  Accountants   (AICPA)
     Accounting  Standards  Executive  Committee  (AcSEC)  issued  Statement  of
     Position 98-5 (SOP),  Reporting on the Costs of Start-Up Activities,  which
     requires companies to expense start-up costs (including organization costs)
     as incurred. The SOP is effective for fiscal years beginning after December
     15, 1998 with early adoption  permitted.  As of March 31, 1998, the Company
     has capitalized approximately $0.1 million of start-up costs related to the
     development  of a casino in Sunland Park,  New Mexico (see Note 6). Current
     plans for the casino  development  reflect  approximately  $1.0  million of
     anticipated  start-up costs. The Company has capitalized  start-up costs in
     conjunction  with the  implementation  of its  long-term  contracts  in the
     on-line lottery and wagering  systems  segments.  The Company's  accounting
     policy for start-up  costs  incurred to  implement  its  long-term  service
     contracts is not affected by the SOP.

     d.   Management estimates.

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


2.   EXTRAORDINARY ITEM--EDS SETTLEMENT

     In January 1994,  Electronic  Data Systems  Corporation  ("EDS")  purchased
545,454  shares  of the  Company's  Common  Stock  and  1,912,728  shares of the
Company's  Series A Junior  Preferred  Stock  ("Series A Preferred  Stock").  In
conjunction  with the stock  sale to EDS in 1994,  the  Company  entered  into a
ten-year agreement with EDS which, among other things, called for EDS to provide
to the Company enhanced  computing,  communications,  system and engineering and
field  maintenance  services  under  terms

                                       8

<PAGE>


of the  Company's  on-line  lottery  contracts.  In 1996,  the Company  withheld
certain  payments  to EDS due to EDS  performance  issues  and  related  on-line
lottery customer disputes.  In mid-1996 the contract with EDS was terminated and
EDS filed a complaint  against the Company seeking payment of outstanding  fees.
On January 30, 1997,  the Company and EDS settled all claims  against each other
and  agreed to  transition  the EDS  services  to the  Company.  The  settlement
resulted  in a net  of  taxes  extraordinary  gain  on  debt  extinguishment  of
approximately $13.3 million ($1.27 per basic and diluted share) for the Company.
The terms of the settlement included the redemption by the Company of all of the
Common and Series A Preferred Stock owned by EDS, the transfer to the Company of
certain  inventories and property,  plant and equipment used in the provision of
EDS  services  to  on-line   lottery   customers  and  the   extinguishment   of
approximately  $38.0 million of outstanding  fees in exchange for a note payable
with an initial  present  value of $26.1  million.  The note  payable  calls for
interest  payments only through 1998 with provisions for acceleration  upon sale
of assets securing the note, and principal and interest  payments in years three
through  maturity in 2004. The note is secured by the redeemed  Common Stock and
Series A  Preferred  Stock,  certain  inventories,  fixed  assets  and  software
technology and carries prepayment  provisions upon the disposal of substantially
all the  assets or stock of the  Company or  certain  of its  subsidiaries.  The
transition  of the  EDS  services  and  related  employees  to the  Company  was
completed in 1997.

3.   INVENTORIES

     A summary of inventory follows:

                                                    March 31,      December 31,
                                                      1998             1997
                                                      ----             ----
                                                      (000)            (000)
     Manufacturing:
          Raw materials                              $7,692           6,703
          Work-in-process                             1,490             662
          Finished goods                              8,947           7,427
     Customer service and other                       1,490           1,150
                                                    -------          ------
                                                    $19,619          15,942
                                                    =======          ======

4.   STOCKHOLDERS' EQUITY

     On  February  10,  1998,  the  Company  effected a  secondary  offering  of
currently   outstanding   shares   held  by  an  investor   group   representing
approximately 14.5% of the Company's outstanding common stock (approximately 1.5
million shares). Approximately 220,000 additional shares were issued pursuant to
the exercise of an option by the underwriters to cover over-allotments.

6.   COMMITMENTS AND CONTINGENCIES

     The  Company  has  employment  agreements  with  certain  of its  executive
officers that provide for lump sum severance payments and accelerated vesting of
options and  restricted  stock upon  termination  of  employment  under  certain
circumstances or a change in control, as defined.

     The Company is obligated to provide services and/or equipment under certain
of its  contracts.  In addition,  the various  state  on-line  lottery and video
gaming  contracts  contain  provisions under which the Company may be subject to
monetary penalties for central computer downtime,  terminal failures,  delays in
servicing  inoperable  terminals  within specified time periods and ticket stock
shortages  among other things.  The Company accrues any net losses in fulfilling
the terms of these  contracts  when the loss is probable  and can be  reasonably
estimated.

     The Company  continues  to conduct a  comprehensive  review of its computer
systems to identify  the systems that could be affected by the "Year 2000" issue
and has developed a preliminary  plan to address the issue.  The Year 2000 issue
is pervasive and complex,  as virtually every computer operation of the Company,
including  both internal  systems and systems  delivered to  customers,  will be
affected  in some

                                       9

<PAGE>


way by the rollover of the two-digit year value to "00."  Computer  systems that
do not properly  recognize  date-sensitive  information could generate erroneous
data or cause a  complete  system  failure.  The  Company  believes  that,  with
modification of existing computer systems,  updates by vendors and conversion to
new software in the ordinary  course of its  business,  the Year 2000 issue will
not pose significant  operations  problems for the Company's  computer  systems.
However,  if such  modifications  and  conversions  are not completed  timely or
properly,  the Year 2000 issue may have a material  impact on the  business  and
operations of the Company.  The costs of  modifications  and conversions are not
anticipated to be material,  but will  principally  represent a re-deployment of
existing or otherwise  planned  resources.  No  assurance  can be given that the
Company  will  successfully  avoid any  problems  associated  with the Year 2000
issue.

     The Company  typically posts bid,  litigation,  and  performance  bonds for
on-line  lottery  contracts.  At March 31, 1998,  the Company had  collateral in
support  of  the  various  bonds  outstanding  consisting  of  $2.0  million  of
restricted  deposits and $7.5 million of irrevocable  standby letters of credit.
Should the Company fail to meet contractually  specified  obligations during the
contract term,  the lottery  authority may assess damages and exercise its right
to collect on the  applicable  bond. The Company has had disputes with customers
over implementation schedules,  deliverables and other issues. The Company works
with these customers to resolve these differences;  however,  should the Company
be unable to resolve any disputes in a mutually satisfactory manner, the Company
may  suffer  negative  consequences  in its  relationships  with these and other
customers and its pursuit of future  business.  The ultimate cost to the Company
of such  damages  (if any)  would be net of its  claims  under  risk  management
policies in effect as appropriate.

     Historically, the Company has met its cash flow requirements primarily with
cash provided by operations,  public  offerings of equity  securities,  and from
borrowings  from  financial  institutions.  The Company,  in 1996, was named the
successful  bidder for a new on-line lottery  contract with the Florida lottery.
The  award  by the  Florida  Lottery  has  been  unsuccessfully  protested  by a
competitor  twice, and the competitor has filed another appeal which has delayed
contract negotiations.  The existing contract had an expiration date of June 30,
1996.  The Company is continuing  the operation of the current  on-line  lottery
system  under the terms of the expired  contract  extended to the earlier of the
implementation of a new agreement or January 1, 2000.

     The  Company  has  submitted  a bid and been  awarded a  contract  with the
Pennsylvania Lottery for an on-line lottery contract to replace the contract the
Company currently has with the lottery. The current contract expires in December
1998.  Sizable capital  expenditures in excess of current capital sources may be
required in advance of any  anticipated  capital  generated  by a new Florida or
Pennsylvania contract. Accordingly, the Company is seeking additional financing,
the  availability  and the terms of which are subject to various  uncertainties,
with no assurance that such financing can be obtained.

     The recovery of a  significant  amount of the  Company's  investment in the
racetrack  operations in Sunland Park, New Mexico is largely contingent upon the
implementation  of  gaming at the  racetrack.  In March,  1997,  the New  Mexico
legislature  voted to allow  casino  gaming  at  pari-mutuel  racetracks  in New
Mexico,  including  the Company's  racetrack in Sunland  Park.  The bill allows,
among other things,  the operation of up to 300 gaming  machines per pari-mutuel
racetrack  facility for up to twelve hours per day. The implementation of gaming
is subject to the timing and  satisfaction  of  conditions  of the  legislation,
including  the actions of the state's  recently  appointed  board to oversee the
gaming and other regulatory  matters.  While the Company intends to file for the
necessary licenses and approvals and believes it meets the appropriate  criteria
and  standards,  no assurances can be given that the licenses and approvals will
be  granted.  The  Company is not aware of any reason it would not  receive  the
necessary licenses or approvals.  Consequently,  the Company does not anticipate
that any revenues will be generated from the approved  gaming until the third or
fourth quarter of 1998.  The Company  developed  architectural  plans for casino
gaming at the racetrack facility and has initiated  construction.  The Company's
investment  in the  racetrack  operations  is  approximately  $19.4  million and
current plans call for  approximately  $8.0 million of capital  expenditures for
facility  enhancements,  gaming machines and related equipment to be funded from
operations.

                                       10

<PAGE>


     A significant percentage of the Company's consolidated revenues are derived
from  sales  to  customers  in  jurisdictions  that  have  enacted   legislation
permitting various types of gaming.  Such enacted  legislation may change due to
political and economic  conditions  within the  jurisdiction  which could have a
material  adverse  effect upon the Company's  financial  position and results of
future operations.

     International  sales  denominated  in  foreign  currencies   accounted  for
approximately 10% of the Company's consolidated revenues in 1997. Management can
give no  assurances  that  changes  in  currency  and  exchange  rates  will not
materially  affect  the  Company's  revenues,  costs,  cash  flows and  business
practices and plans.  Additional  risks inherent in the Company's  international
business   activities   generally  include   unexpected  changes  in  regulatory
requirements,  tariffs and other trade barriers, delays in receiving payments on
accounts  receivable  balances,  reimbursement  approvals (both governmental and
private), difficulties in managing international operations, potentially adverse
tax  consequences,  restrictions  on repatriation of earnings and the burdens of
complying with a wide variety of foreign laws and regulations.  In addition, the
Company's foreign operations would be affected by general economic conditions in
the  international  markets  in  which  the  Company  does  business,  such as a
prolonged economic downturn in Europe or the Asian-Pacific  region. There can be
no assurances  that such factors will not have a material  adverse effect on the
Company's  future  international  revenues and,  consequently,  on the Company's
business,  financial condition, results of operations or cash flows. The Company
has not historically  attempted to hedge the risks of fluctuating exchange rates
given the currencies involved and the terms of payment granted to its customers.

     In January  1998, a breach of contract  claim was filed against the Company
and  AWI in the U.  S.  District  Court,  Southern  District  of New  York by MR
International, Inc. and American Lottery Systems. The plaintiffs allege that the
Company and AWI  breached  their  obligations  in a joint  venture in the Rostov
region of the Republic of Russia.  The complaint  seeks  monetary  damages.  The
Company  believes the claim is entirely  without merit and intends to vigorously
defend the action.

     The Company is involved in various other claims and legal  actions  arising
in the  ordinary  course  of  business.  In the  opinion  of  management,  after
consultation with legal counsel, the ultimate disposition of these other matters
will not have a material adverse effect on its consolidated  financial  position
or results of operations or liquidity.

                                       11

<PAGE>


                 POWERHOUSE TECHNOLOGIES, INC. AND SUBSIDIARIES

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

     Revenue  from  the  on-line  lottery  segment   consists   primarily  of  a
contractual  percentage  of lottery  ticket sales in states in which the Company
operated as well as revenue from on-line  lottery  equipment  sales and software
license fees.  The segment  revenue will  experience  fluctuations  depending on
contract  start and end dates and  relative  sizes of jackpots and the number of
terminals  on-line  and  selling  tickets  in the  states in which  the  Company
operates. The Company expects on-line lottery services revenue to continue to be
a significant component of total revenues.  On-line lottery revenue is generated
by the Company's AWI subsidiary.

     Revenue from the gaming machine and route  operations  segment  consists of
sales and lease of gaming  machines,  sales of  parts,  central  control  system
hardware  and  software,  service  of  terminals,  license  fees,  and  from the
operation of gaming machine routes.  Route operations revenue consists primarily
of gaming  machine  wagers net of pay-outs to patrons  and state  gaming  taxes.
Revenue  from  gaming  machine  sales  is  subject  to  potentially  significant
fluctuations.  When  and if new  jurisdictions  approve  legislation  for new or
expanded gaming  operations or when the Company first enters a new jurisdiction,
and if the Company is awarded a contract in any such jurisdictions,  the segment
may experience a surge in sales revenue that may or may not subsequently decline
dramatically depending on the jurisdiction and gaming venue. The Company expects
gaming machine and route operations  revenue to continue to be a major component
of  total  revenues.  Gaming  machine  revenue  is  primarily  generated  by the
Company's VLC subsidiary.

     The Company is actively seeking to expand its operations into jurisdictions
that have legalized gaming. There can be no assurance, however, that the Company
will be able to identify or capitalize on any opportunities in suitable markets.
The Company's ability to expand will be dependent upon a number of factors, many
of which are beyond the  Company's  control,  including  negotiating  acceptable
terms, securing required governmental licenses, permits, and approvals, securing
adequate  financing on acceptable  terms,  voter and other political  approvals,
demographic trends, and consumers' gaming preferences. As a result, there can be
no  assurance  that the  Company  will be able to develop  new  markets  for its
products.  In addition,  the Company may incur costs in connection with pursuing
new opportunities  that it cannot recover and may be required to expense certain
of these costs,  which may negatively  affect the Company's  reported  operating
performance for the periods during which such costs are expensed.

     Revenue  from  wagering  systems  and  racetrack  operations  is  generated
primarily from a contractual percentage of handle processed through computerized
pari-mutuel   wagering  systems  from  over  120  contracts  in  North  America,
international sales and lease of pari-mutuel wagering systems, and ownership and
operation of a racetrack in Sunland Park, New Mexico.  While on-track attendance
and handle from pari-mutuel wagering in the United States has markedly decreased
over the last  decade as  jurisdictions  have  legalized  other forms of gaming,
there has also been a substantial  increase in simulcast and off-track  wagering
handle  during the same  period.  Due to the  significant  increase of alternate
forms of gaming during the last several  years,  there can be no assurance  that
such historical patterns will remain the same in the future, nor can the Company
predict the magnitude of any  resulting net economic  effects on this segment of
its business.  The Company  expects  wagering  systems and racetrack  operations
revenue to be a significant component of total revenues.

     Gross  profit for each  segment  is herein  defined  as  revenues  for that
segment less the corresponding  costs and expenses  (excluding  depreciation and
amortization  expense  and any  special or other  charges).  Costs and  expenses
related to on-line  lottery  revenue  include  all  direct  costs and  allocated
indirect  costs  involved in  operating  the on-line  lottery  equipment in each
jurisdiction  in which the Company has a contract as well as costs of  equipment
sales, inclusive of materials, labor and allocated manufacturing overhead. Costs
and  expenses  related  to  gaming  machine  revenue  include  direct  costs  of
production,  including labor, and allocated  manufacturing  overhead.  Costs and
expenses related to route operations  include the locations owners' share of the
net machine revenues.  Costs and expenses related to wagering systems operations
include  direct and allocated  indirect costs  associated  with the operation of
totalisator  equipment at the  racetracks at which the Company has a contract as
well as direct costs of equipment sales.

                                       12

<PAGE>


     Selling,  general  and  administrative  expenses  consist  of labor  costs,
professional  fees, repairs and maintenance  expense,  promotion and advertising
costs,  occupancy  and other  costs,  other  than  those  included  in costs and
expenses  applicable  to the  determination  of gross profit as defined above or
research and development as discussed below.

     Research and development costs represent costs incurred to gain and develop
new knowledge  applicable to the Company's  various gaming systems  inclusive of
software and  hardware  technology.  Included in the costs are labor,  material,
consulting,  occupancy  and other  expenses  associated  with the  research  and
development  efforts.  Development  costs are  capitalized  in  accordance  with
Statement of Financial  Accounting  Standards Board Statement No. 86 for certain
software developed for sale or lease.

First Quarter 1998 Compared with First Quarter 1997
---------------------------------------------------

     Consolidated  revenues  increased by $2.2 million,  or 5%, to $50.2 million
from $48.0  million in the first  quarter 1997.  The  consolidated  gross profit
decreased by $0.4  million,  or 2%, to $17.6  million from $18.0  million in the
first quarter 1996. Earnings from operations were $1.7 million in 1998 and 1997.
Net earnings before  extraordinary  items were $0.6 million in the first quarter
1998 as compared to $0.3 million in 1997.

     In January  1997 the Company  settled a dispute  with EDS over  performance
issues  under the  Company's  1994  agreement  with EDS that  called  for EDS to
provide  technology  services for the Company's on-line lottery  customers.  The
settlement  included,  among other things, an extinguishment of outstanding fees
payable to EDS in  consideration  of a promissory  note with a present  value of
approximately $26.1 million and resulted in a net of taxes extraordinary gain of
$13.3 million. See Note 2 to the Consolidated Financial Statements.

                                 On-line Lottery

     Total revenues from the on-line lottery segment  increased by $6.3 million,
or 27% to $29.3  million  from $23.0  million  in the first  quarter  1997.  The
increase   reflects  revenues  from  enhancements  to  on-line  lottery  systems
previously  installed  for  customers  in Norway and Chile as well as a domestic
sale of instant ticket validation terminals.

     The Company  expects the on-line  lottery  segment to remain a  significant
segment of the Company and the segment's  growth is dependent upon  management's
strategy to selectively bid on domestic lottery contract and aggressively pursue
international  on-line lottery  opportunities.  On-line lottery  contracts for a
number  of state  lotteries  will be up for  procurement  over the next  several
years. Due to the high cost of procuring new lottery  contracts,  the Company is
targeting  those states which it believes will establish a bidding process based
exclusively on technical capability, price and service. This strategy allows the
Company  to  efficiently  allocate  its  resources  so that it may  also  pursue
international growth opportunities.  The Company is currently pursuing potential
opportunities  in a number of  jurisdictions,  worldwide,  that are  expected to
implement  on-line  lottery  programs  within the next two  years.  In the first
quarter 1998,  revenues from lottery system  enhancements  and equipment  sales,
primarily  to  international  customers,  was $6.8  million as  compared to $0.7
million in 1997.

     Additionally,  the Company's on-line lottery system  MasterLink(R)  affords
the Company the  ability to develop  add-on  products  and  services.  Given the
maturity  of the  on-line  lottery  industry,  operators  are in need of ways to
increase  lottery ticket sales and reduce costs.  The Company expects to develop
new  products  and  services  every year for its  existing  customers as well as
reduce operating costs.

     The expiration  date of the current  contract with the Florida  Lottery was
extended  from  June  30,  1996,  as a result  of a delay of the  award of a new
contract.  On September 2, 1997, the Company was notified by the Florida Lottery
that the Company had been selected as the most highly  qualified  bidder for the
award of a new five-year contract pursuant to a re-evaluation that resulted from
an earlier protest by a competitor of the Florida Lottery's  previous  selection
of the Company. The competitor  protested the Florida

                                       13

<PAGE>


Lottery's re-selection of the Company as the most qualified bidder. On March 23,
1998,  the Lottery  dismissed  the protest and  re-awarded  the  contract to the
Company.  The  competitor  filed its notice of appeal of this order on March 24,
1998. The Florida Lottery may commence  contract  negotiations with the Company.
The competitor has petitioned the Florida Lottery to stay these negotiations. On
January 5, 1998 the  Company  and the Florida  Lottery  entered  into an interim
contract to continue  operating the Florida  Lottery's  on-line system until the
earlier of either the award and  implementation  of a new  agreement  or through
January 1, 2000.  Under the terms of the Florida  request for proposal,  sizable
capital expenditures in excess of current credit facilities would be required to
fulfill its terms. The availability of and terms of new financing are subject to
numerous uncertainties and cannot be reasonably predicted.

     The gross profit margin for on-line  lottery  revenues was 35% in the first
quarter 1998 as compared to 34% in 1997.  The gross  profit  margin from on-line
lottery service  revenues was 33% in the first quarter 1998 and 34% in 1997. The
gross profit on on-line  lottery system and equipment sales was 41% in the first
quarter 1998 and 43% in 1997.  The Company  expects  gross  profit  margins from
on-line  lottery  revenues  to increase  over time  although  no  assurances  of
increased margins can be given.

                       Gaming Machine and Route Operations

     Revenue from the gaming machine and route operations  segment  decreased by
$3.3  million,  or 19%, to $14.4 million from $17.7 million in the first quarter
of 1997.  Revenue was  recognized  on delivery of 835 units in the first quarter
1998 as compared to 2,508 units in 1997.  The  reduction  in revenues and gaming
machine shipments in the first quarter of 1998 reflects a higher level of gaming
machine and related parts sales in 1997 in Oregon and Quebec, Canada,  partially
offset by increased  sales in Nevada,  where the Company  began  selling  gaming
machines in  mid-1996.  Revenue from the  Company's  route  operations  was $4.5
million in the first  quarter 1998 as compared to $4.4 million in 1997.  Revenue
from leases of gaming  machines  was $2.7  million in the first  quarter 1998 as
compared to $3.0 million in 1997.

     The Company  expects  the gaming  machine  and route  operation  segment to
remain a significant segment of the Company's operations. The growth and success
of the segment is dependent upon the Company's ability to expand its position in
the worldwide  video lottery  gaming  machine  market,  to continue to penetrate
casino markets such as Nevada and New Jersey and to develop casino opportunities
at pari-mutuel  racetracks such as the Company's  racetrack in Sunland Park, New
Mexico.  The Company  believes  that new markets such as South  Africa,  and the
replacement of older gaming  machines and systems in Australia and North America
will  provide for  significant  future  growth  opportunities  for the  Company.
Penetration and growth of sales to casino markets is primarily  dependent on the
Company's  ability to gain  visibility and acceptance of its gaming  machines in
the markets while offering a competitive  price.  The Company  believes that its
gaming  machines are capable of producing  greater than average play and net win
amounts reflecting their superior enhanced graphics and playability.  Developing
casino  opportunities at pari-mutuel  racetracks is dependent initially upon the
enactment of legislation to allow gaming at racetrack facilities. A small number
of states, including New Mexico, West Virginia, Delaware, Iowa, Rhode Island and
Louisiana have enacted legislation to allow gaming at racetracks and the Company
anticipates the trend to continue although there can be no assurance of it.

     The gross profit margin on gaming machine and route operations  revenue was
44% in the first quarter 1998 as compared to 48% in 1997. The decrease  reflects
a  combination  of higher  revenues  from  chipset,  central site  equipment and
consulting  revenue  primarily  from  Australia in 1997. The gross profit margin
from route operations revenue was 27% in the first quarter 1998 and 28% in 1997.
Revenue from leasing of gaming  machines has minimal direct costs.  Depreciation
expense of gaming machines under lease and revenue share  agreements is recorded
as a  component  of  depreciation  and  amortization  expense  in the  Company's
consolidated financial statements. Although there can be no assurance given, the
Company expects gross profit margin levels to remain above 40% for the segment.

                    Wagering Systems and Racetrack Operations

     Revenue  from  the  wagering  systems  and  racetrack   operation  segments
decreased by $0.7 million to $6.6 million from $7.3 million in 1997 reflecting a
higher level of equipment sales in 1997.  Revenue from

                                       14

<PAGE>


wagering  systems  service  contracts was $4.0 million in the first quarter 1998
and 1997. Racetrack operation revenue was $2.4 million in the first quarter 1998
and $2.2 million in 1997. Pari-mutuel wagering systems equipment sales were $0.3
million in the first quarter 1998 as compared to $1.2 million in 1997.

     The gross profit from wagering  systems service  contracts was $1.1 million
in the first  quarter 1998  compared to $1.6  million in 1997.  The higher gross
profit level in 1997  reflects the higher  level of wagering  systems  equipment
sales in 1997.  Gross profit for the racetrack  operations was $(0.3) million in
the first quarter 1998 as compared to $(0.2) 1997.

     The Company  expects the wagering  systems  segment to remain a significant
segment.  However,  declines in on-track wagering at pari-mutuel  facilities has
created increased pricing pressures for the Company and its pari-mutuel wagering
systems  supplier  competitors.  The Company does not  anticipate  those pricing
pressures  to decrease in the near  future.  Accordingly,  the Company  plans to
maintain  profitability  by improving  customer  service  while  maintaining  or
reducing operating costs. The Company believes that expansion of video gaming at
racetracks  could  increase  attendance and on-track  wagering at racetracks.  A
number of jurisdictions have considered or are considering gaming at racetracks.
The Company provides wagering systems and service to over 120 of the approximate
350 pari-mutuel facilities in North America, including Churchill Downs which has
consistently set new attendance and wagering records with the Company's wagering
system and services.

     The recovery of a  significant  amount of the  Company's  investment in the
racetrack  operations in Sunland Park, New Mexico is largely contingent upon the
implementation  of  gaming  at the  racetrack.  In March  1997,  the New  Mexico
legislature  voted to allow  casino  gaming  at  pari-mutuel  racetracks  in New
Mexico,  including  the Company's  racetrack in Sunland  Park.  The bill allows,
among other things,  the operation of up to 300 gaming  machines per pari-mutuel
racetrack  facility for up to twelve hours per day. The implementation of gaming
is subject to the timing and  satisfaction  of  conditions  of the  legislation,
including  the actions of the state's  recently  appointed  board to oversee the
gaming  and other  regulatory  matters.  While the  Company  intends to file the
necessary licenses and approvals and believes it meets the appropriate  criteria
and  standards,  no assurances can be given that the licenses and approvals will
be  granted.  The  Company is not aware of any reason it would not  receive  the
necessary licenses or approvals.  Consequently,  the Company does not anticipate
that any revenues will be generated from the approved  gaming until the third or
fourth quarter of 1998.  The Company  developed  architectural  plans for casino
gaming at the  racetrack  facility  and has begun  construction.  The  Company's
investment  in the  racetrack  operations  is  approximately  $19.4  million and
current  plans  call  for  approximately  $8.0  million  of  additional  capital
expenditures for facility enhancements, gaming machines and related equipment to
be funded from operations.

Selling, General and Administrative Expenses
--------------------------------------------

     Selling,  general and  administrative  ("SG&A") expenses  increased by $0.8
million,  or 11%, to $8.5 million in the first quarter 1998 from $7.7 million in
1997.  The increase  reflects the Company's  continued  increased  marketing and
business  development  efforts. The increase was in both the on-line lottery and
gaming machine segments.  The Company  anticipates SG&A expenses to remain at or
above current  levels given a  continuation  of strategic  business  development
plans.

Research and Development
------------------------

     In the first  quarter 1998,  the Company  expended $2.6 million on research
and  development  activities  as compared to $2.5 million in 1997.  In the first
quarter  1997 the Company  capitalized  approximately  $0.3  million of software
development  costs.  The  Company  continues  to develop and enhance its central
system and gaming and wagering  terminal  software and games as well as terminal
hardware  for all three  operating  segments.  A number of software  development
projects are currently  being  monitored for  technological  feasibility and the
Company may capitalize  additional  development costs as the projects  continue.
Research  and  development  expenditures  were  5.1%  and  5.7% of  consolidated
revenues in the first quarters of 1998 and 1997, respectively.

                                       15

<PAGE>


Depreciation and Amortization
-----------------------------

     Depreciation and amortization  decreased by $1.2 million to $4.8 million in
the first  quarter  1998 from $6.0  million in 1997.  The  decrease is primarily
attributable to various extensions of on-line lottery contracts that occurred in
1997.  The  respective  lottery  authorities   exercised  extension  options  in
Delaware, Florida, Minnesota, and South Dakota.

Liquidity and Capital Resources
-------------------------------

     In the first quarter 1998 the Company generated nearly $2.9 million of cash
from  operations as compared to $11.5 million in 1997. The reduction  reflects a
number  of  significant   fluctuations  in  operating   assets  and  liabilities
representing  a reduction  in cash  provided  by  operations.  The  fluctuations
include an increase in inventory  levels and  decreases in accounts  payable and
accrued  liabilities  as well as a decrease  in income  tax  refund  receivables
offset by decreases in trade accounts  receivable.  Working capital increased by
approximately  $6.0 million from December 31, 1997 to $43.1 million at March 31,
1998.  Approximately $2.6 million was invested in property,  plant and equipment
and  intangible  and other assets in the first  quarter 1998 as compared to $2.5
million in 1997. Approximately $1.0 million related to the manufacture, purchase
and  installation of pari-mutuel  wagering  equipment by the Company's  wagering
system segment and approximately $1.0 million for on-line lottery equipment.

     The note payable to EDS arising from the settlement  discussed in Note 2 to
the  Consolidated  Financial  Statements is secured by certain assets  including
on-line lottery equipment inventories with a carrying value of approximately $.7
million at March 31, 1998.  The note payable  ($25.5  million at March 31, 1998)
provides for acceleration of payment on the note equal to 30% of the sales price
of the equipment as well as proceeds in excess of certain  levels from licensing
the  Company's  MasterLink(R)  software.  The note  payable  also  provides  for
acceleration payments for a change in control of the Company.

     The Company repaid long-term debt of $2.5 million in the first quarter 1998
including the outstanding  term loans with US Bank (formerly known as First Bank
N.A.).  On February 28, 1998,  the Company and US Bank  extended the  expiration
date of the Company's credit facility agreement  including the revolving line of
credit and bonding  program  letters of credit to August 31, 1998. The revolving
line of credit has $10.0 million available to the Company for working capital.

     The Company,  in 1996,  was named the  successful  bidder for a new on-line
lottery contract with the Florida Lottery.  The award by the Florida Lottery has
been  unsuccessfully  protested by a competitor  twice,  and the  competitor has
filed  another  appeal that has  delayed  contract  negotiations.  Under the new
contract,  AWI would provide services to the Florida Lottery for five more years
with  options for two  extensions  of two  additional  years each.  The existing
contract  had an  expiration  date of  June  30,  1996.  AWI is  continuing  the
operation of the current  on-line  lottery system under the terms of the expired
contract  under  temporary  extension  expiring  the  earlier  of the  award and
implementation of a new agreement or through January 1, 2000.

     In  November  1997,  the  Company  was  awarded  a new  five-year  contract
commencing  in January  1999 to continue  operating  the  Pennsylvania  Lottery.
Current estimates of capital necessary to implement a lottery system,  under the
contract  that  has  been  submitted  to  Pennsylvania   Lottery  officials  for
signature,  are in the range of $40.0  million  over a three year period with as
much as $29.0 million by January 1999.

     Also, the Company has begun construction for casino gaming at the racetrack
facility in Sunland Park, New Mexico.  Current plans call for approximately $8.0
million of capital expenditures for facility  enhancements,  gaming machines and
related equipment over the next several quarters.

     Sizable  capital  expenditures  in excess of current capital sources may be
required in advance of any  anticipated  capital  generated  by a new Florida or
Pennsylvania  contract.  Furthermore,  the Company does

                                       16

<PAGE>


not anticipate that any revenues will be generated from casino gaming at Sunland
Park until the third or fourth quarter of 1998.

     Accordingly,  the Company is seeking additional  financing which may or may
not include refinancing  current long-term debt obligations of the Company.  The
availability  and the terms of  additional  financing  are  subject  to  various
uncertainties  and the Company can provide no assurance  that such financing can
be obtained.  Historically,  cash flow requirements have been met primarily with
cash provided by operations,  public  offerings of equity  securities,  and with
borrowings from financial  institutions.  Primarily all operating leases are for
office and warehousing space as discussed in the Company's 1997 annual report on
Form 10-K filed with the Securities and Exchange Commission.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Not Applicable

                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     No  significant  changes have occurred with regard to legal  proceedings as
disclosed in Part 1, Item 3, of the Company's December 31, 1997 Form 10-K:

ITEM 2. CHANGES IN SECURITIES

     None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

     None

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

     None

ITEM 5. OTHER INFORMATION

     None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     a.   Listing of Exhibits

          EX-27 Financial Data Schedule (For SEC Use Only)

     b.   Reports on Form 8-K

          None

                                       17

<PAGE>



SIGNATURES


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

                                    POWERHOUSE TECHNOLOGIES, INC.



Date:  May 15, 1998                 /S/ SUSAN J. CARSTENSEN
                                    --------------------------------------------
                                    Susan J. Carstensen, Chief Financial Officer
                                    (authorized to sign on behalf of Registrant)



                                       18