<PAGE>   1
                       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 JUNE 30, 1999
                                                 -------------

                                       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 000-22298
                                               ---------

                         SCIENTIFIC GAMES HOLDINGS CORP.
--------------------------------------------------------------------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

           DELAWARE                                          13-3615274
--------------------------------------------------------------------------------
(STATE OR OTHER JURISDICTION OF                        (IRS IDENTIFICATION NO.)
   EMPLOYER)

1500 BLUEGRASS LAKES PARKWAY, ALPHARETTA, GEORGIA                    30004
--------------------------------------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                           (ZIP CODE)


REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (770) 664-3700
                                                    -------------

--------------------------------------------------------------------------------
         FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE
         LAST REPORT.


                                       1

<PAGE>   2




         INDICATE BY CHECK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS.
                                               YES  [X]            NO  [ ]

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

         INDICATE BY CHECK 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:

         INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S
CLASSES OF COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE: 11,896,735 SHARES OF
COMMON STOCK, $.001 PAR VALUE PER SHARE, AS OF AUGUST 2, 1999.


                                       2

<PAGE>   3






                         PART I - FINANCIAL INFORMATION

<TABLE>
<CAPTION>
                                                                                Page No.
                                                                                --------
<S>                                                                             <C>

Item 1.  Consolidated Condensed Financial Statements

         Consolidated Condensed Balance Sheets
                  June 30, 1999 and December 31, 1998..........................     4

         Consolidated Condensed Statements of Income
                  Three-month period ended June 30, 1999
                  and June 30, 1998
                  Six-month period ended June 30, 1999
                  and June 30, 1998............................................     5

         Consolidated Condensed Statements of Cash Flows
                  Six-month period ended June 30, 1999
                  and June 30, 1998............................................     6

         Notes to Consolidated Condensed Financial Statements..................     7


Item 2.  Management's Discussion and Analysis of Financial
                  Condition and Results of Operations..........................     9


                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings.....................................................    15

Item 4.  Submission of Matters to a Vote of Security Holders...................    15

Item 6.  Exhibits and Reports on Form 8-K......................................    16

SIGNATURES.....................................................................    16
</TABLE>


                                       3

<PAGE>   4

                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                         SCIENTIFIC GAMES HOLDINGS CORP.
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                        (IN THOUSANDS EXCEPT SHARE DATA)



<TABLE>
<CAPTION>
                                                                 June 30,     December 31,
                                                                   1999           1998
                                                                ---------     ------------
                                                               (unaudited)         (1)
<S>                                                             <C>           <C>
                                     ASSETS

CURRENT ASSETS:
  Cash and cash equivalents ..............................      $  13,732       $   9,270
  Trade receivables ......................................         49,805          39,445
  Inventories ............................................         15,280          15,090
  Prepaid expenses and other current assets ..............          3,581           2,111
  Deferred income tax benefits ...........................            620           1,032
                                                                ---------       ---------
         Total current assets ............................         83,018          66,948

PROPERTY AND EQUIPMENT, AT COST:
  Land ...................................................          2,521           2,521
  Buildings ..............................................         11,892          11,664
  Production and other equipment .........................        103,788         101,098
  Construction-in-progress ...............................          3,566           2,047
                                                                ---------       ---------
                                                                  121,767         117,330
  Less accumulated depreciation and amortization .........        (62,295)        (57,386)
                                                                ---------       ---------
                                                                   59,472          59,944
OTHER ASSETS
   Goodwill, net of amortization .........................         33,245          35,282
   Other assets ..........................................         17,669          17,459
                                                                ---------       ---------

                                                                $ 193,404       $ 179,633
                                                                =========       =========

              LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable .......................................      $  16,041       $  16,270
  Accrued liabilities ....................................         22,949          17,822
  Bank debt ..............................................         13,678          12,482
  Income taxes payable ...................................          1,471           3,932
                                                                ---------       ---------
         Total current liabilities .......................         54,139          50,506

LONG-TERM LIABILITIES:
   Other long-term liabilities ...........................          7,696           8,221
   Deferred income taxes payable .........................          6,786           6,694
   Minority interest in consolidated subsidiaries ........          2,654           2,306

STOCKHOLDERS' EQUITY:
  Common stock par value $.001 per share:
    shares authorized: 25,750,000;
    issued and outstanding shares: 11,886,320 at June 30,
    1999 and 11,875,737 at December 31, 1998 .............             12              12
  Additional paid-in capital .............................         65,746          65,551
  Accumulated earnings ...................................         56,637          46,201
  Accumulated other comprehensive income .................           (266)            142
                                                                ---------       ---------
         Total stockholders' equity ......................        122,129         111,906
                                                                ---------       ---------
                                                                $ 193,404       $ 179,633
                                                                =========       =========
</TABLE>

(1) Derived from audited financial statements

    See accompanying notes.


                                       4


<PAGE>   5

                         SCIENTIFIC GAMES HOLDINGS CORP.
                   CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                      (IN THOUSANDS EXCEPT PER SHARE DATA)
                                   (UNAUDITED)



<TABLE>
<CAPTION>
                                                                         Three-month period            Six-month period
                                                                            ended June 30,               ended June 30,
                                                                          1999          1998          1999            1998
                                                                        --------       -------      ---------       -------
<S>                                                                     <C>            <C>          <C>             <C>

Revenues .........................................................      $ 57,125       $51,567      $ 109,790       $99,986
Cost of revenues .................................................        35,576        32,735         69,294        64,292
                                                                        --------       -------      ---------       -------
                                                                          21,549        18,832         40,496        35,694

Selling, general and administrative expenses .....................         7,617         6,170         14,357        12,278
Depreciation and amortization ....................................         4,822         4,323          8,894         8,527
                                                                        --------       -------      ---------       -------

Operating income .................................................         9,110         8,339         17,245        14,889

Other income (expense):
      Interest income ............................................           189            64            279            96
      Other income ...............................................            25            68             30            22
      Gain/(loss) on foreign currency ............................          (174)           38            273            28
      Interest expense ...........................................           235           412            402           804
      Minority interest elimination ..............................          (287)            6           (716)          101
                                                                        --------       -------      ---------       -------

Income before income taxes .......................................         8,628         8,103         16,709        14,332

Income tax expense ...............................................         3,198         3,250          6,273         5,703
                                                                        --------       -------      ---------       -------

Net income .......................................................      $  5,430       $ 4,853      $  10,436       $ 8,629
                                                                        ========       =======      =========       =======

Basic net income per common share ................................      $   0.46       $  0.39      $    0.88       $  0.71
                                                                        ========       =======      =========       =======
Diluted net income per common share ..............................      $   0.45       $  0.39      $    0.87       $  0.70
                                                                        ========       =======      =========       =======

Average common shares outstanding - basic ........................        11,885        12,316         11,885        12,153
Dilutive effect of stock options and non-vested
    restricted stock awards ......................................           108           189            108           251
                                                                        --------       -------      ---------       -------
Average common shares outstanding-diluted ........................        11,993        12,505         11,993        12,404
                                                                        ========       =======      =========       =======
</TABLE>



See accompanying notes.


                                       5

<PAGE>   6


                         SCIENTIFIC GAMES HOLDINGS CORP.
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)





<TABLE>
<CAPTION>
                                                                                                  Six-month period
                                                                                                    ended June 30,
                                                                                                 1999           1998
                                                                                               --------       --------
<S>                                                                                            <C>            <C>

CASH FLOW PROVIDED BY OPERATING ACTIVITIES
    Net income ..........................................................................      $ 10,436       $  8,629
    Adjustments to reconcile net earnings to net
       cash provided by operating activities:
         Depreciation ...................................................................         5,838          6,421
         Amortization of intangibles ....................................................         3,056          2,106
         Gain on disposal of property and equipment .....................................           (12)            (7)
         Stock compensation expense .....................................................            31            285
         Minority interest ..............................................................           348              0
         Deferred income taxes ..........................................................           257            198
         Changes in operating assets and liabilities:
              Accounts receivable .......................................................       (12,752)         1,396
              Inventories ...............................................................          (527)        (1,336)
              Prepaid expenses and other assets .........................................        (2,733)        (2,193)
              Accounts payable ..........................................................           435          2,880
              Accrued liabilities .......................................................         7,833         (2,768)
              Income taxes payable ......................................................        (1,580)        (1,036)
                                                                                               --------       --------
       Net cash provided by operating activities ........................................        10,630         14,575

CASH FLOWS USED IN INVESTING ACTIVITIES
    Proceeds from sales of property and equipment .......................................           120            131
    Purchases of property and equipment .................................................        (5,956)        (4,080)
    Other investing activities ..........................................................            --           (481)
                                                                                               --------       --------
       Net cash used in investing activities ............................................        (5,836)        (4,430)

CASH FLOWS USED IN FINANCING ACTIVITIES
    Borrowings under bank debt ..........................................................        21,265          1,068
    Payments on bank debt and other long-term debt ......................................       (19,771)       (11,777)
    Proceeds of exercise of common stock options ........................................             8          4,575
                                                                                               --------       --------
       Net cash provided by (used in) financing activities ..............................         1,502         (6,134)

EFFECT OF EXCHANGE RATE CHANGES ON CASH .................................................        (1,834)          (179)
                                                                                               --------       --------
NET INCREASE IN CASH AND CASH EQUIVALENTS ...............................................         4,462          3,832

CASH AND CASH EQUIVALENTS, beginning of period ..........................................         9,270          2,843
                                                                                               --------       --------
CASH AND CASH EQUIVALENTS, end of period ................................................      $ 13,732       $  6,675
                                                                                               ========       ========

SUPPLEMENTAL CASH FLOWS DISCLOSURE:
    Cash paid for interest ..............................................................      $    318       $    786
                                                                                               ========       ========
</TABLE>

See accompanying notes.

                                       6

<PAGE>   7



                         SCIENTIFIC GAMES HOLDINGS CORP.
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

                                   (UNAUDITED)


Note 1.   Basis of Presentation

          The accompanying unaudited consolidated condensed financial statements
     have been prepared in accordance with generally accepted accounting
     principles for interim financial information and with the instructions to
     Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not
     include all of the information and footnotes required by generally accepted
     accounting principles for complete financial statements and should be read
     in conjunction with the financial statement disclosures contained in the
     Company's 1998 Annual Report on Form 10-K for the year ended December 31,
     1998. In the opinion of management, all adjustments considered necessary
     for a fair presentation (which were of a normal, recurring nature) have
     been included. Operating results for the three and six month periods ended
     June 30, 1999 are not necessarily indicative of the results that may be
     expected for the year ended December 31, 1999.

Note 2.   Inventories

          Inventories consist principally of instant lottery tickets, materials
     related to their production and certain electronic components related to
     Systems terminals which are valued at the lower of cost (first-in,
     first-out method) or market. Inventories consisted of the following at:

<TABLE>
<CAPTION>
                                               June 30,  December 31,
                                                 1999        1998
                                               --------  ------------
                                                   (In Thousands)
<S>                                            <C>       <C>

Finished goods .........................       $ 8,101      $ 7,939
Work-in-process ........................         1,268        1,087
Raw materials ..........................         5,911        6,064
                                               -------      -------
                                               $15,280      $15,090
                                               =======      =======
</TABLE>


Note 3.   Contingencies

          Refer to the Company's Form 10-K for the year ended December 31, 1998
     and the Company's Form 10-Q for the quarter ended March 31, 1999 for a
     description of pending legal proceedings, with respect to which there has
     been the following material development since such date. The Company has
     been informed that on June 4, 1999, Empresa Colombiana de Recursos Para la
     Salud, S.A. ("Ecosalud") filed an executory proceeding in Colombia against
     the Company seeking payment of 90,051,599,475 Colombian pesos
     (approximately US$50,000,000), although the Company has not yet been served
     with the proceeding. The claims upon which this action are allegedly based
     relate to the claims upon which similar actions were made by Ecosalud
     against the Company in 1993 in Colombia and in 1996 in the United States
     District Court for the Northern District of Georgia, Atlanta Division (the
     "prior actions"), which have been previously disclosed by the Company. The

                                       7


<PAGE>   8

     current action is alleged to have been filed immediately prior to the
     expiration of the Colombian statute of limitation on June 7, 1999 for
     executory actions by Colombian public entities. Upon advice of Colombian
     counsel, the Company believes it has significant defenses to the current
     action, including the existence of pending litigation on the same subject
     matter and an earlier ruling by the Colombian Court and the United States
     District Court in the prior actions that the current claims must be decided
     by arbitration.


Note 4.   Comprehensive Income

          Total comprehensive income was $5.4 million and $10.0 million for the
     three-month and six-month periods ended June 30, 1999 and $4.7 million and
     $9.3 million for the three-month and six-month periods ended June 30, 1998,
     respectively.

Note 5.   Segment Information


<TABLE>
<CAPTION>
OPERATING SEGMENT INFORMATION                 THREE MONTH PERIOD              SIX MONTH PERIOD
                                                 ENDED JUNE 30                 ENDED JUNE 30
(In thousands)                                1999           1998           1999            1998
                                            --------       --------       ---------       --------
<S>                                         <C>            <C>            <C>             <C>

Revenue from external customers:
   Instant Ticket and Related Services      $ 45,917       $ 47,018       $  86,673       $ 89,670
      Intersegment Revenue                    (1,896)        (2,250)         (3,565)        (3,905)
   Systems                                    11,161          4,294          23,054         10,040
      Intersegment Revenue                     1,896          2,250           3,565          3,905
   Corporate                                      47            255              63            276
                                            --------       --------       ---------       --------
Total revenue from external customers         57,125         51,567         109,790         99,986
                                            ========       ========       =========       ========


Operating income
   Instant Ticket and Related Services         9,729          9,672          17,604         17,940
   Systems                                     2,807          1,359           5,731          1,809
   Corporate                                  (3,426)        (2,692)         (6,089)        (4,860)
Total operating income                         9,110          8,339          17,245         14,889
   Interest expense, net                         (46)          (348)           (123)          (708)
   Other                                        (436)           112            (413)           151
                                            ========       ========       =========       ========
Income before income tax                    $  8,628       $  8,103       $  16,709       $ 14,332
                                            ========       ========       =========       ========
</TABLE>


                                       8


<PAGE>   9

                         SCIENTIFIC GAMES HOLDINGS CORP.

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

GENERAL

     The Company's revenues are generated primarily from sales of products and
services to governmentally operated or sanctioned lotteries worldwide and, to a
lesser extent, non-lottery related entities both in the United States and
worldwide. These sales are categorized into two main segments: (1) Instant
Ticket and Related Services and (2) Systems.

     In the Instant Ticket and Related Services segment, the Company primarily
supplies game design, sales and marketing support, instant ticket manufacturing
and delivery, inventory management and distribution, and retailer telemarketing
and field services. In addition, this segment includes promotional instant
tickets and pull-tab tickets which are sold to both lottery and non-lottery
customers and prepaid phone cards which are sold to telecommunications
companies.

     In the Systems segment, the Company primarily supplies transaction
processing software that accommodates instant ticket accounting and validation
and on-line lottery games, point-of-sale terminal hardware which connects to
these systems, central site computers and communication hardware which run these
systems, and ongoing support and maintenance services for these products. This
segment also includes software, hardware and support for sports betting and
credit card processing systems for non-lottery customers.

     Instant Ticket and Related Services revenues are generally based on a price
per 1,000 tickets delivered or based upon a percentage of the lottery's sales to
the public over a contract period. Systems revenues may be based on a fixed
price for the product or service or based upon a percentage of the lottery's
sales to the public over a contract period.

     Through June 30, 1999, the Company has:

          -    received one-year extensions on its current Instant Ticket and
               Related Services contracts with the Colorado Lottery, DC Lottery
               and Charitable Games Control Board, Illinois Lottery, Iowa
               Lottery, Kentucky Lottery, Minnesota State Lottery, New Mexico
               Lottery, Oregon State Lottery, South Dakota Lottery and the
               Washington Lottery.

          -    received two six-month extensions on its instant ticket contract
               as an additional supplier from the California State Lottery and
               several smaller orders from new and existing international
               lottery and prepaid phone card customers.

          -    been awarded a new two-year contract to provide Instant Tickets
               and Related Services by the Massachusetts Lottery.

          -    received a two-year contract to provide instant ticket
               telemarketing, distribution services and systems software and
               hardware to support instant tickets to the New York State
               Lottery.

          -    been awarded an emergency six-month Instant Ticket and Services
               contract by the Texas Lottery Commission. The


                                       9

<PAGE>   10

               Texas contract authorizes the Company to provide instant tickets
               pending decision by the Executive Director of the Texas Lottery
               on the protest filed by a non-winning bidder upon the recent
               award of the primary instant ticket contract to the Company,
               although the award of the primary contract to the Company was
               confirmed by the Executive Director on August 10, 1999 in her
               response to the protest filed by the non-winning bidder.

RESULTS OF OPERATIONS

Three-month period ended June 30, 1999 compared to three-month period ended June
30, 1998.

     Revenues for the three-month period ended June 30, 1999 increased $5.6
million, or 10.8% over the revenues for the three-month period ended June 30,
1998. The increase was primarily due to additional revenues generated from sales
to new and existing Systems customers and from sales generated by other printing
activities. The increase was partially offset by a decrease in Instant Ticket
and Related Services sales from the United States to domestic and international
customers and from reduced international promotional sales. Instant Ticket and
Related Services revenues accounted for approximately 77.1% and 81.0% of the
Company's gross revenues for the three-month periods ended June 30, 1999 and
1998, respectively.

     Gross margins increased to 37.7% for the three-month period ended June 30,
1999 from 36.5% for the three-month period ended June 30, 1998. The margin
increase was mainly attributable to an increase in sales to Systems customers
and continued efficiency improvements in the Company's Instant Ticket and
Related Services segment. The margin increase was partially offset by lower
equivalent sales prices charged on certain instant ticket lottery contracts
awarded or extended and lower instant ticket export sales. The lower equivalent
sales prices were a result of competitive pricing pressures in the industry.

     Selling, general and administrative expenses for the three-month period
ended June 30, 1999 increased $1.4 million or 23.5%, over the same period of
1998. SG&A expenses increased as a percentage of revenues to 13.3% from 12.0%.
The increase was due primarily to the additional selling, general and
administrative expenses resulting from a foreign joint venture formed in
December 1998 and additional expenses required to support increased sales
activity.

     Depreciation and amortization increased for the three-month period ended
June 30, 1999 by $499,000 or 11.5% over the comparable period of 1998 due
primarily to additional depreciation expenses from ongoing capital expenditures
and goodwill amortization related to a foreign joint venture.

     Interest income for the three-month period ended June 30, 1999 increased
$125,000, or 195.3%, compared to the three-month period ended June 30, 1998. The
increase was attributable to higher average cash and cash equivalents balances
during the same comparable periods.

     Other income for the three-month period ended June 30, 1999 decreased
$43,000, or 63.2%, compared to the three-month period ended June 30, 1998. The
decrease was attributable to fewer asset dispositions in the three-month period
ended June 30, 1999.


                                       10

<PAGE>   11

     Gain/(loss) on foreign currency for the three-month period ended June 30,
1999 resulted in a loss of $174,000 compared with a gain of $38,000 for the same
period 1998. The loss resulted primarily from fluctuations in exchange rates on
non-U.S. dollar holdings.

     Interest expense for the three-month period ended June 30, 1999 decreased
$177,000 or 43.0% from the three-month period ended June 30, 1998. The decrease
was due to the decrease in the average balance outstanding under the Company's
Bank Credit Agreement during the three month period ended June 30, 1999(refer to
the Company's 10-K for the year ended December 31, 1998 for a description of the
Company's Bank Credit Agreement) compared to the prior period.

     Income tax expense for the three-month period ended June 30, 1999 decreased
$52,000, or 1.6% as compared to the same three-month period of 1998 due to a
reduction in the Company's effective income tax rate. The effective income tax
rate decreased from 40.1% to 37.1% for the three month periods ended June 30,
1998 and June 30, 1999, respectively. The decrease in the effective income tax
rate was partially attributable to additional tax credits.

     As a result of the foregoing, net earnings for the three-month period ended
June 30, 1999 were $5.4 million compared to $4.9 million for the comparable
period ended June 30, 1998.

     Earnings per common share (diluted) for the three-month period ended June
30, 1999 were $0.45 compared to $0.39 for the comparable period in 1998. The
increase in earnings per common share was primarily due to the increase in
earnings and a decrease in the weighted average number of common equivalent
shares outstanding.

Six-month period ended June 30, 1999 compared to six-month period ended June 30,
1998.

     Revenues for the six-month period ended June 30, 1999 increased $9.8
million, or 9.8% over the revenues for the six-month period ended June 30, 1998.
The increase was primarily due to additional revenues generated from sales to
new and existing systems customers and from sales generated by other printing
activities. The increase was partially offset by a decrease in Instant Ticket
and Related Services sales from the United States to domestic and international
customers and from reduced international promotional sales. Instant Ticket and
Related Services revenues accounted for approximately 75.7% and 85.8% of the
Company's gross revenues for the three-month periods ended June 30, 1999 and
1998, respectively.

     Gross margins increased to 36.9% for the six-month period ended June 30,
1999 from 35.7% for the six-month period ended June 30, 1998. The margin
increase was mainly attributable to an increase in sales to Systems customers
and continued efficiency improvements in the Company's Instant Ticket and
Related Services segment. The margin increase was partially offset by lower
equivalent sales prices charged on certain instant ticket lottery contracts
awarded or extended and lower instant ticket export sales. The lower equivalent
sales prices were a result of competitive pricing pressures in the industry.

     Selling, general and administrative (SG&A) expenses for the six-month
period ended June 30, 1999 increased $2.1 million or 16.9%, over the same period
of 1998. As a percentage of revenues, SG&A expenses increased from

                                       11


<PAGE>   12
12.3% to 13.1%. The increase was due primarily to the additional selling,
general and administrative expenses resulting from a foreign joint venture
formed in December 1998 and additional expenses required to support increased
sales activity.

     Depreciation and amortization increased for the six-month period ended June
30, 1999 by $367,000 or 4.3% over the comparable period of 1998 due primarily to
additional depreciation expenses from ongoing capital expenditures and goodwill
amortization related to a foreign joint venture.

     Interest income for the six-month period ended June 30, 1999 increased
$183,000, or 190.6%, compared to the six-month period ended June 30, 1998. The
increase was attributable to higher average cash and cash equivalents balance
during the same comparable periods.

     Other income for the six-month period ended June 30, 1999 increased $8,000
or 36.4%, compared to the six-month period ended June 30, 1998. The increase was
attributable to more net gains from assets dispositions in the six-month period
ended June 30, 1999 than in the comparable period in 1998.

     Gain on foreign currency for the six-month period ended June 30, 1999
increased by $245,000 to $273,000, compared with a gain of $28,000 for the
comparable period in 1998. The gains primarily resulted from fluctuations in
exchange rates on non-U.S. dollar holdings.

     Interest expense for the six-month period ended June 30, 1999 decreased
$402,000, or 50.0% from the six-month period ended June 30, 1998. The decrease
was due to the decrease in the average balance outstanding under the Company's
Bank Credit Agreement (refer to the Company's 10-K for the year ended December
31, 1998 for a description of the Company's Bank Credit Agreement) compared to
the prior period.

     Income tax expense for the period ended June 30, 1999 decreased $570,000,
or 10.0% as compared to the same six-month period of 1998 due to a reduction in
the Company's effective income tax rate. The effective income tax rate for the
three month periods ended June 30, 1999 and June 30, 1998 was 37.5% and 39.8%,
respectively. The decrease in the effective income tax rate was partially
attributable to additional tax credits.

     Earnings per common share (diluted) for the six-month period ended June 30,
1999 were $0.87 compared to $0.70 for the comparable period in 1998. The
increase in earnings per common share was primarily due to the increase in
earnings and a decrease in the weighted average number of common equivalent
shares outstanding.

LIQUIDITY AND CAPITAL RESOURCES

     The Company's cash position remains strong. The Company's cash and cash
equivalents balance increased by approximately $4.5 million during the six-month
period ended June 30, 1999 although the Company's net borrowings under its Bank
Credit Agreement increased by $1.2 million during the same period.

     For the six-month period ended June 30, 1999, net cash provided by
operating activities decreased by $4.0 million to $10.6 million from $14.6
million for the comparable period in 1998. The primary contributions to cash
from operating activities during the six-month period ended June 30, 1999 were
net income, depreciation and amortization and an increase in

                                       12

<PAGE>   13

accrued liabilities. Accounts receivable increased by $10.4 million from $39.4
million at December 31, 1998 to $49.8 million at June 30, 1999, and accrued
liabilities increased by $5.1 million from $17.8 million at December 31, 1998 to
$22.9 million at June 30, 1999. The increase in accounts receivable and accrued
liabilities are primarily due to activity related to Systems projects in
Australia, Canada, France and Greece. Cash provided by operations was used to
fund working capital requirements, purchase additional property and equipment
and make payments on the outstanding balance under the Bank Credit Agreement.

     Net cash used in investing activities for the six-month period ended June
30, 1999 increased by approximately $1.4 million to $5.8 million from $4.4
million for the six-month period ended June 30, 1998. Cash was used to acquire
additional property and equipment.

     The Company's financing activities generated cash of $1.5 million for the
six months ended June 30, 1999 and used cash of $6.1 million in the six months
ended June 30, 1998. The Company increased the balance outstanding under the
Bank Credit Agreement at June 30, 1999 by a net amount of approximately $1.2
million compared to the balance at December 31, 1999. Net borrowings under the
Bank Credit Agreement were $13.7 million at June 30, 1999.

     The Company believes that funds provided by operations, available
borrowings under its Bank Credit Agreement and the ability to obtain alternative
sources of financing should permit the Company to fund its operations, working
capital requirements and obligations, as well as other potential investment or
business opportunities.

IMPACT OF YEAR 2000

     Refer to the Company's Form 10-K for the year ended December 31, 1998 for a
description of the Company's Year 2000 ("Y2K") program, business systems,
interfaces with third parties, estimated Y2K costs and contingency planning,
with respect to which there have been the following developments since such
date. The Company spent approximately $485,000 on Y2K compliance costs during
the six-month period ended June 30, 1999. These costs included capital
expenditures and internal labor costs which management believes would have
otherwise been incurred as part of the Company's regular program of
modernization and improvement. The Company now estimates that its total Y2K
compliance costs (including software, systems and equipment) incurred since 1997
have been approximately $1.7 million. The Company believes that completed and
planned modifications and conversions of its internal systems and equipment will
allow it to be Y2K ready prior to December 31, 1999.

FORWARD-LOOKING STATEMENTS

     This Quarterly Report on Form 10-Q contains certain statements and
projections (including statements concerning plans and objectives of management
for future operations and services and statements concerning revenue
expectations), other than those covering historical information, that should be
considered forward-looking and subject to certain risks and uncertainties. Such
forward-looking statements are based on management's belief as well as
assumptions made by, and information currently available to, management pursuant
to "safe harbor" provisions of the Private Securities Litigation Reform Act of
1995. The Company's actual results may differ materially from the plans
envisioned in, or results projected by,

                                       13


<PAGE>   14

those statements if the Company's assumptions prove to be incorrect or for a
variety of other reasons, including those relating to factors identified in the
Company's Annual Report on Form 10-K for the year ended December 31, 1998 as
part of a Cautionary Statement for purposes of such safe harbor. The Company
cautions that such factors are not exclusive. The Company does not undertake to
update any forward-looking statement that may be made from time to time by, or
on behalf of, the Company.

                                       14



<PAGE>   15

PART II - OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS

Refer to the Company's Form 10-K for the year ended December 31, 1998 and the
Company's Form 10-Q for the quarter ended March 31, 1999 for a description of
pending legal proceedings, with respect to which there has been the following
material development since such date. The Company has been informed that on June
4, 1999, Empresa Colombiana de Recursos Para la Salud, S.A. ("Ecosalud") filed
an executory proceeding in Colombia against the Company seeking payment of
90,051,599,475 Colombian pesos (approximately US$50,000,000), although the
Company has not yet been served with the proceeding. The claims upon which this
action are allegedly based relate to the claims upon which similar actions were
made by Ecosalud against the Company in 1993 in Colombia and in 1996 in the
United States District Court for the Northern District of Georgia, Atlanta
Division (the "prior actions"), which have been previously disclosed by the
Company. The current action is alleged to have been filed immediately prior to
the expiration of the Colombian statute of limitation on June 7, 1999 for
executory actions by Colombian public entities. Upon advice of Colombian
counsel, the Company believes it has significant defenses to the current action,
including the existence of pending litigation on the same subject matter and an
earlier ruling by the Colombian Court and the United States District Court in
the prior actions that the current claims must be decided by arbitration.


ITEMS 2,3 AND 5 ARE NOT APPLICABLE AND HAVE BEEN OMITTED.


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

The annual meeting of the Company's shareholders was held on May 21, 1999. At
the meeting the following matters were voted upon, with the following results:

1.   Election of Directors. The following directors were elected, for terms
     ending at the annual meeting in the year indicated:

<TABLE>
<CAPTION>
                           Term         Votes        Votes
Name of Director          Ending      In Favor      Against    Abstentions  Non-votes
----------------          ------     ----------     -------    -----------  ---------
<S>                       <C>        <C>            <C>        <C>          <C>
Paul F. Balser             2002      10,214,997        0         7,700      1,661,265
Dennis L. Whipple          2002      10,211,797        0        10,900      1,661,265
William G. Malloy          2002      10,194,997        0        27,700      1,661,265

Continuing Directors:

William F. Behm            2001      N/A             N/A        N/A         N/A
Mark E. Jennings           2001      N/A             N/A        N/A         N/A
Dr. Edith Manns            2000      N/A             N/A        N/A         N/A
Frank S. Jones             2000      N/A             N/A        N/A         N/A
</TABLE>

2.   Approval of 1999 Employee Stock Purchase Plan. The 1999 Employee Stock
     Purchase Plan allows employees of the Company to purchase stock of the

                                       15


<PAGE>   16

     Company at discounted rates. The results of the voting with respect to the
     1999 Employee Stock Purchase Plan were as follows:

<TABLE>
<CAPTION>
           Votes         Votes
         In Favor       Against        Abstentions   Non-votes
         --------       -------        -----------   ---------
         <S>            <C>            <C>           <C>
         8,868,823      1,343,147      10,727        1,661,265
</TABLE>

3.   Approval of the selection of Ernst & Young LLP as the Company's auditors
     for the 1999 fiscal year. The results of the voting were as follows:


<TABLE>
<CAPTION>
           Votes         Votes
         In Favor       Against        Abstentions   Non-votes
         --------       -------        -----------   ---------
         <S>            <C>            <C>           <C>
         10,212,799      3,115            6,783      1,661,265
</TABLE>


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

                  #10.53        Supply Agreement for Instant Lottery
                                Computer Management System.
                                Confidential treatment has been
                                requested for portions of this
                                exhibit, which confidential portions
                                have been filed separately with the
                                Securities and Exchange Commission.
                  #27           Financial Data Schedule (for SEC use only)

     (b)  Reports on Form 8-K

          No reports on Form 8-K were filed during the six-months ended June 30,
          1999


                                   SIGNATURES


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


                         SCIENTIFIC GAMES HOLDINGS CORP.



Date:  August 16, 1999                         By: /s/ WILLIAM G. MALLOY
                                                   ---------------------------
                                                   William G. Malloy
                                                   President and
                                                   Chief Executive Officer


Date:  August 16, 1999                         By: /s/ CLIFF O. BICKELL
                                                   ---------------------------
                                                   Cliff O. Bickell
                                                   Vice President, Treasurer,
                                                   and Chief Financial Officer


                                       16