<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    SEPTEMBER 30, 1996
                              --------------------------------------------------

                                       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                                        13 361 5274
--------------------------------------------------------------------------------
(STATE OR OTHER JURISDICTION OF                      (IRS IDENTIFICATION NO.)
           EMPLOYER

    1500 BLUEGRASS LAKES PARKWAY, ALPHARETTA, GEORGIA           30201
--------------------------------------------------------------------------------
         (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 [X] 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 [X] 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:
12,113,224 SHARES OF COMMON STOCK,  $.001 PAR VALUE PER SHARE, AS OF SEPTEMBER
30, 1996.





                                       2

<PAGE>   3

                         PART I - FINANCIAL INFORMATION

             


<TABLE>
<CAPTION>
                                                                  Page No.
                                                                  --------
      <S>      <C>                                                       <C>
      Item 1.  Consolidated Condensed Financial Statements

               Consolidated Condensed Balance Sheets
                    September 30, 1996 and December 31, 1995.............4

               Consolidated Condensed Statements of Earnings
                    Three-month period ended September 30, 1996
                    and September 30, 1995...............................5
                    Nine-month period ended September 30, 1996
                    and September 30, 1995

               Consolidated Condensed Statements of Cash Flows
                    Nine-month period ended September 30, 1996
                    and September 30, 1995...............................6

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


      Item 2.  Management's Discussion and Analysis of Financial
                    Condition and Results of Operations.................10

<CAPTION>
                          PART II - OTHER INFORMATION
      <S>      <C>                                                      <C>
      Item 1.  Legal Proceedings........................................16

      Item 6.  Exhibits and Reports on Form 8-K.........................17
</TABLE>




                                       3
<PAGE>   4


                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

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



<TABLE>
<CAPTION>
                                                           September 30,              December 31,
                                                               1996                       1995
                                                           -------------              ------------                    
                             ASSETS                         (unaudited)                   (1)
<S>                                                           <C>                      <C>
Current assets:                                                                          
 Cash and cash equivalents.................................   $ 22,618                 $  26,413
 Trade receivable, net of allowance for doubtful accounts                      
   of $138 and $417, respectively..........................     26,635                    21,725
 Inventories...............................................      9,720                     6,767
 Prepaid expenses and other current assets.................        556                       871
 Deferred income tax benefit...............................      1,280                     1,280
                                                              --------                 ---------                   
Total current assets........................................    60,809                    57,056
                                                                               
Property and equipment, at cost:                                               
 Land......................................................      2,521                     2,521
 Buildings.................................................     11,719                    11,598
 Production and other equipment............................     63,080                    59,779
 Construction-in-Progress..................................          0                       867
                                                              --------                 ---------  
                                                                77,320                    74,765
 Less accumulated depreciation and amortization............    (30,838)                  (24,673)
                                                              --------                 ---------                   
                                                                46,482                    50,092
                                                                                      
Other assets................................................     3,359                     3,038
                                                              --------                 ---------  
                                                              $110,650                 $ 110,186
                                                              ========                 =========                 
                                                                               
             LIABILITIES AND STOCKHOLDERS' EQUITY                              
Current liabilities:                                                           
 Accounts payable..........................................   $  3,467                 $   4,552
 Accrued liabilities.......................................      6,350                     6,652
 Income taxes payable......................................      2,799                       539
 Current portion of capital lease obligations..............        562                       596
                                                              --------                 ---------                   
Total current liabilities...................................    13,178                    12,339
                                                                               
Capital lease obligations, less current portion.............         8                       376
                                                                               
Long-term debt                                                   8,000                         0
Deferred income taxes payable...............................     2,891                     2,891
                                                                               
Stockholders' equity:                                                          
 Common stock par value $.001 per share:                                       
   shares authorized: 25,750,000;                                              
   issued and outstanding shares:  12,113,224 at September 30,                 
   1996 and 13,064,653 at December 31, 1995................         12                        13
 Additional paid-in capital................................     54,322                    52,163
 Retained earnings ........................................     32,310                    42,503
                                                              --------                 ---------                   
                                                                86,644                    94,679
Less notes receivable from officers for the sale                             
   of common stock to such officers........................        (71)                      (99)
                                                              --------                 ---------                   
Total stockholders' equity..................................    86,573                    94,580
                                                              --------                 ---------                   
                                                              $110,650                 $ 110,186
                                                              ========                 =========                 
</TABLE>                                                                       

(1) Derived from audited financial statements

     See accompanying notes.




                                       4

<PAGE>   5


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



<TABLE>
<CAPTION>
                                               Three-month period    Nine-month period
                                               ended September 30    ended September 30
                                                  1996       1995       1996       1995
                                              --------   --------   --------   --------
<S>                                            <C>        <C>       <C>        <C>
Revenue                                        $38,210    $37,724   $102,363   $112,008
Cost of revenues excluding depreciation and
   amortization                                 22,752     21,912     62,701     66,697
                                               -------    -------   --------   --------
                                                15,458     15,812     39,662     45,311
Selling, general and administrative expenses
   excluding depreciation and amortization       3,968      3,726     12,527     11,047

Depreciation, amortization and other charges     2,130      2,177      6,500      6,674
                                               -------    -------   --------   --------
                                                 9,360      9,909     20,635     27,590
Interest income                                    209        135        789        383
Gain/(loss) on foreign currency                    274        (16)       670         47
Interest expense                                   (14)      (109)       (45)      (264)
                                               -------    -------   --------   --------
Earnings before income tax                       9,829      9,919     22,049     27,756
Income tax expense                               3,935      4,018      8,835     11,251
                                               -------    -------   --------   --------
Net earnings                                   $ 5,894    $ 5,901   $ 13,214   $ 16,505
                                               =======    =======   ========   ========
Earnings per common share                      $  0.45    $  0.43   $   0.98   $   1.21
                                               =======    =======   ========   ========
Weighted average number of common and common
equivalent shares outstanding                   12,991     13,678     13,493     13,623
                                               =======    =======   ========   ========
See accompanying notes.
</TABLE>


                                       5

<PAGE>   6


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



<TABLE>
<CAPTION>
                                                                      Nine-month period
                                                                      ended September 30,
                                                                       1996        1995
                                                                    ----------  ----------
<S>                                                                 <C>          <C>
Operating activities
Net earnings.....................................................   $  13,214    $  16,505
Adjustments to reconcile net earnings to net
 cash provided by operating activities:
      Depreciation..............................................        6,252        5,111
      Amortization of intangibles...............................          248          248
      Gain on disposal of property and equipment................            5           (5)
      Stock compensation expense ...............................        2,154        1,582
      Changes in operating assets and liabilities:
          Accounts receivable....................................      (4,910)      (9,671)
          Inventories............................................      (2,916)      (1,198)
          Prepaid expenses and other assets......................        (314)         289
          Accounts payable.......................................      (1,085)         (90)
          Accrued liabilities....................................        (257)       2,346
          Income taxes payable...................................       2,260        1,083
                                                                    ---------    ---------
Net cash provided by operating activities........................      14,651       16,200

Investing activities
Proceeds from sales of property and equipment....................          45            5
Purchases of property and equipment..............................      (2,669)      (5,535)
Repurchase of common stock........................................    (23,408)           -
                                                                    ---------    ---------
Net cash used in investing activities............................     (26,032)      (5,530)

Financing activities
Payments on notes receivable from officers.......................          28           35
Payments on capital lease obligations............................        (444)      (1,221)

Proceeds from long term debt.....................................       8,000            -
                                                                    ---------    ---------
Net cash provided by/(used) in financing activities..............       7,584       (1,186)
                                                                    ---------    ---------
(Decrease)/increase in cash and cash equivalents.................      (3,797)       9,484
Cash and cash equivalents at beginning of period.................      26,415        7,493
                                                                    ---------    ---------
Cash and cash equivalents at end of period.......................   $  22,618    $  16,977
                                                                    =========    =========
</TABLE>



See accompanying notes.

                                       6
<PAGE>   7

                        SCIENTIFIC GAMES HOLDINGS CORP.
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

                                  (UNAUDITED)


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 1995 Annual Report on Form 10-K for the year
     ended December 31, 1995.  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 nine month periods ended September 30, 1996 are not necessarily
     indicative of the results that may be expected for the year ended December
     31, 1996.

2.   Inventories

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


<TABLE>
<CAPTION>
                                          September 30,  December 31,
                                              1996           1995
                                          -------------  ------------
                                                (In Thousands)
   <S>                                    <C>            <C>                                         
   Finished goods................                $4,381        $3,095
   Work-in process...............                 1,288           334
   Raw materials.................                 4,031         3,338
                                          -------------  ------------
                                                 $9,700        $6,767
                                          =============  ============
</TABLE>


3.   Contingencies

          There have been no material developments in the dispute with Empresa
     Colombiana de Recursos para la Salud, S.A. ("Ecosalud") except as follows:
     The complaint filed in the Northern District of Georgia, Atlanta
     Division, and styled Empresa Colombiana de Recursos para la Salud, S.A. v.
     Scientific Games, Inc., Civil Action No. 1 96-CV-1586, was served on
     Scientific Games Inc. ("SGI") on July 15, 1996 (the "Complaint").

          In response to the Complaint, SGI filed a motion to dismiss the
     action on multiple grounds, including an arbitration clause contained
     within the contract and the doctrine of forum non conveniens. Ecosalud
     then filed an "Amended Complaint" in which it withdrew its claim for in
     excess of $84,000,000 and, instead, seeks collection of $5,000,000




                                       7
<PAGE>   8

     under an "Executive Title", a purported joint and several guarantee by the
     Company, Wintech and other shareholders in Wintech that certain levels of
     lottery ticket sales would be attained. In addition, Ecosalud also seeks
     attorneys' fees and interest on the claim. The Company anticipates it will
     file a motion to dismiss the Amended Complaint on the grounds, inter alia,
     that litigation involving the same subject matter is pending in Colombia.

          SGI intends to vigorously defend such litigation and has been advised
     by counsel that SGI has numerous defenses on the merits, as well as
     procedural defenses to the litigation. Although it is not possible to
     determine the outcome of such litigation, either in Georgia or Colombia,
     or the other related surety and indemnity claims, management believes
     based upon, among other things, the advice of counsel, that adequate
     provision has been made for such claims and the disposition thereof should
     not materially adversely affect the Company's consolidated financial
     condition or consolidated results of operations.

          A more detailed discussion of the above-referenced matters, prior to
     developments described above, is set forth in the Company's report on Form
     8-K filed with the Commission on July 5, 1996.



4.   Debt

          Long-term debt consists of borrowings under the Company's existing
     Bank Credit Agreement totaling $8 million. The debt is classified as
     long-term in that the Company intends to refinance this debt under an
     existing commitment for an $80 million, three year revolving credit
     facility with two one year extension options.


5.   Subsequent Events

          On October 1, 1996, the Company acquired the stock of Opax
     International Limited, a United Kingdom Corporation ("Opax Acquisition")
     which was renamed Scientific Games International Limited ("SGIL"). SGIL is
     a producer of instant lottery and promotional game tickets with an
     international customer base and two printing plants in the United Kingdom.
     The purchase price was approximately $22,763,471 and was financed
     primarily through the Company's cash reserves.

     Assets acquired and liabilities assumed were approximately as follows (in
     thousands):


<TABLE>
                <S>                                   <C>           
                Cash                                  $ 1,729       
                Accounts receivable                     3,509       
                Inventories                             1,234       
                Property and equipment                  5,718       
                Intangibles                            14,385       
                Current liabilities                    (3,143)      
                Deferred tax liability                   (669)      
                                                      -------       
                                                      $22,763       
                                                      =======       
</TABLE>




                                       8
<PAGE>   9

     Pro forma income statement data for the nine months ended September 30,
     1996 and 1995 are as follows (in thousands except per share data):

<TABLE>
<CAPTION>
                               Nine Months Ended        
                                 September 30,          
                              --------------------
                                1996       1995         
                              --------------------      
     <S>                      <C>        <C>            
     Revenues                   $20,063   $18,806       
     Net Income                     235       (72)      
     Income Per Common Share       0.02     (0.01)      
</TABLE>

     The pro forma results presented above include adjustments to reflect
     (i) interest expense on borrowings for the Opax Acquisition, (ii)
     amortization of assets acquired including intangibles, (iii) certain
     management expenses related to the Company's combined operations,
     including lease expense for a building owned by the former owner of SGIL
     which was not purchased as part of the Opax Acquisition, and (iv) the
     income tax effect of such pro forma adjustments and income taxes on the
     earnings of Opax. The pro forma adjustments are based upon a preliminary
     allocation of the purchase price.

     These pro forma unaudited results of operations do not purport to
     represent what the Company's actual results of operations would have been
     if the Opax Acquisition had occurred on January 1, 1995, and should not
     serve as a forecast of the Company's operating results for any future
     periods. The pro forma adjustments are based solely upon certain
     assumptions that management believes are reasonable under the
     circumstances at this time. However, the full impact of potential cost
     savings has not been reflected in the pro forma results presented above,
     although there can be no assurances such cost savings will be achieved.
     Subsequent adjustments are expected upon final determination of the
     allocation of the purchase price.

                                       9

<PAGE>   10

                        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 from the sale of instant tickets to
lotteries and promotional (commercial) customers, from the provision of
cooperative services, instant ticket hardware and software system development
and services and from the sale of pull-tab tickets. Instant and pull-tab ticket
revenues are generally based on a price per 1,000 tickets.  Revenues from
cooperative services, software and hardware development may be based on a
percentage of the lottery's sales to the public, a contracted price or any
combination of the foregoing.

     The Company's operating results can vary significantly from period to
period.  Revenues and capital expenditures can be difficult to forecast because
the Company's sales cycle can vary and depend upon factors such as the size and
timing of awarded contracts, changes in customer budgets, ticket inventory
position and general economic conditions.  Contracts with governmental entities
operating newly authorized instant lotteries tend to generate higher levels of
ticket sales in the initial months.  All of the Company's lottery contracts
currently are with jurisdictions whose lotteries have been in operation at
least one year (except the New Mexico State Lottery which commenced sale of
lottery tickets in 1996). Operating results may be affected by the working
capital requirements associated with preparing facilities and equipment,
establishing a distribution system and printing tickets for recently awarded
contracts, and by the amount of time elapsing before the receipt and/or
recognition of revenues from the sale of lottery tickets and the provision of
cooperative services.  Operating results may also be affected by the
utilization of overtime labor and the Company's ability to smoothly integrate
new and/or upgraded production equipment with its existing production
operations.  Revenues from the sale of tickets, cooperative services, software
and hardware development may be recognized based upon ticket shipment, a
percentage of the lottery's sales to the public, a contracted price or any
combination of the foregoing.  Accordingly, quarter to quarter fluctuations in
revenues may be expected.  Additionally, circumstances encountered in
international markets, including the substantial amount of time involved in
bidding on an international contract, the evaluation of such bid and the
resultant contract award or rejection can vary significantly from that
originally anticipated when the bid is prepared.  All of these factors can make
it difficult to forecast revenues and expenditures related to the Company's
operations over extended periods and can result in fluctuations in the
Company's quarterly financial results.

     The Company's domestic lottery contracts typically have an initial term of
from one to three years and usually provide the customer with options to extend
the contract one or more times under the same, or mutually agreeable, terms and
conditions for additional periods generally ranging from one to three years. 
The Company's international lottery contracts are less likely to have firm
contract periods and, historically,



                                       10
<PAGE>   11

international lottery ticket customers have sought competitive bids for such
contracts more frequently.  The Company's customers have seldom failed to
exercise extension options in the Company's domestic instant lottery contracts. 
Upon the expiration of a contract (including any extensions which may have been
exercised), lottery authorities often award new contracts through a competitive
procurement process.  During any quarter, some lottery contract is typically
expiring and/or reaching an optional extension date.

     During 1996 the Company had four domestic contracts which have expired or
will expire and its competitors have six which have expired or will expire. New
contracts for those states were or will be awarded through a competitive
procurement process in which the Company participated. Management estimates
that its customers with expiring contracts represent aggregate ticket sales
equaling approximately 11% of the Company's ticket shipments in 1995 and that
its competitors' contracts represented in aggregate sales equaling
approximately 20% of the tickets shipped by the Company to its customers in
1995. To date, the Company was not the successful bidder on the contract for
the Virginia Lottery. It was the successful bidder of approximately 20% for the
ticket business for the Wisconsin Lottery and the successful bidder for the
West Virginia Lottery. The West Virginia Lottery contract included, in addition
to instant lottery tickets, support field sales, marketing and advertising,
software and SciScan Technology. With regard to competitor contracts, the
Company was the successful bidder for the lotteries of New York, Illinois and a
portion of the instant ticket supply for the New Jersey State Lottery. It was
not the successful bidder for competitors' contracts with respect to Kansas and
Montana.

     Some of the lottery contracts awarded or reawarded to the Company in 1996
(and the orders thereunder) have or may have certain lower equivalent prices
than charged in the previous contracts.  To the extent such contracts actually
contain lower equivalent prices, the Company's profit margins could be
adversely affected. The impact of lower equivalent prices in certain contracts,
however, may be offset, in whole or in part, by other factors, including higher
order levels from new and existing customers, increased production efficiencies
and other savings associated with economies of scale. The timing and extent,
both of lower equivalent price contracts and offsetting factors, cannot be
predicted with certainty. While Scientific Games has frequently been awarded
new contracts when its prior domestic contracts and extensions have expired,
there can be no assurance that any of the Company's contracts will be extended
or that it will be awarded new contracts as a result of competitive procurement
processes in the future.  Nor can any assurances be given with respect to the
Company's ability to offset, in whole or in part, the effects of any 
intensified price competition.

RECENT DEVELOPMENTS

     On October 1, 1996, the Company completed its previously announced
purchase of Opax International Limited, which was renamed Scientific Games
International Limited ("SGIL"). The adjusted purchase price was $22.8 million.
SGIL is a producer of instant lottery and promotional game tickets with an
international customer base and two printing plants in the United



                                       11
<PAGE>   12

Kingdom. See Financial Statements, in Note 4 of the Notes to the Consolidated
Condensed Financial Statements for further information.

     On October 11, 1996, SGIL purchased the contracts and the customer base of
ILS Systems, b.v., a Dutch lottery ticket printer, for $1 million from De La
Rue plc. In addition, Scientific Games Inc. ("SGI") entered into two agreements
with De La Rue in consideration of $1.5 million paid by SGI to De La Rue. Under
these agreements De La Rue will represent the Company in the sale of its
lottery products in certain regions of the world.

RESULTS OF OPERATIONS

Three-month period ended September 30, 1996 compared to three-month period
ended September 30, 1995.

     Revenues for the three-month period ended September 30, 1996 increased
$486,000, or 1.3% over the revenues for the three-month period ended September
30, 1995.  The increase was primarily due to an increase in sales to domestic
customers of $2.6 million, which was offset by a decrease in international
sales as compared to the same period in 1995.

     The decline in revenues to international customers was due mainly to a
decline in lottery retail sales of two customers.  The increase in revenues
from domestic customers was attributable to the growth in sales to a number of
the Company's existing customers, as well as sales to new domestic customers.
As discussed more fully above, lotteries can have periods of increasing and
decreasing retail sales which, in turn, can have an impact on the operating
results of the Company.

     Gross margins decreased to 40.5% for the three-month period ended
September 30, 1996 from 41.9% for the three-month period ended September 30,
1995.  The margin decline can be attributed to lottery contracts awarded or
reawarded having lower equivalent prices than charged in previous contracts,
higher production costs due to a change in the mix of materials used, and more
frequent production runs with fewer tickets per run. These higher costs were
partially offset by a number of events including efficiency improvements
resulting from the 1994 and 1995 capital investment program, the absence of the
startup costs related to such program during the three-month period ended
September 30, 1996 and the movement of a higher portion of production to the
lower cost Alpharetta, Georgia plant from the Gilroy, California plant.

     Selling, general and administrative ("SG&A") expenses increased $242,000
for the three-month period of 1996 over the same period of 1995.  SG&A expenses
also increased as a percentage of revenues to 10.3% from 9.8%.  The dollar
increase primarily was due to an increase in domestic and international
marketing and sales expenses, including the accrual of trade show expenses,
travel costs, and an increase in overall compensation costs. The percentage
increase in SG&A was due to the dollar increase SG&A expenses in the
three-month period ended September 30, 1996 as compared to the same period in
1995. Management anticipates that SG&A expenses for subsequent quarters
generally will be higher than the quarter ended September 30, 1996 but
currently does not expect such expenses to rise to the dollar level reported
for the quarter ended June 30, 1996, which





                                       12
<PAGE>   13

quarter contained certain unusual expenses related to contract bid preparation,
as well as certain one time compensation related items. SG&A expenses are
subject to change both as a percent of sales and dollar volume dependent upon
the amount of revenues for the applicable period.

     Depreciation and amortization expenses decreased for the three-month
period ended September 30, 1996 by 2.1% or $47,000 over the comparable period
of 1995.  The decrease was attributable to certain assets which had been
written-up at the time of the management buyout in 1991 being fully depreciated
during the quarter ended September 30,1996.


     Interest income for the three-month period ended September 30, 1996
exceeded the three-month period ended September 30, 1995,  due to the increase
in cash and cash equivalents while interest expense decreased because of a
lower capitalized lease balance. Interest income for the three month-period
ended September 30, 1996 increased $74,000 from the three-month period ended
September 30, 1995.  The decline in interest expense was $95,000.  Gains on
foreign currency increased by $290,000 due mainly to activity related to the
Opax Acquisition as well as net foreign currency gains related to non U. S.
dollar transactions.


     Net earnings were $5.9 million for the three-month period ended September
30, 1996 and 1995. The effective tax rate for the three-month period ended
September 30, 1996 and September 30, 1995 was 40.0% and 40.1%, respectively.

     Earnings per common share for the three-month period ended September 30,
1996, was 45 cents per share compared to 43 cents per share for the same period
in 1995.  The 4% increase in earnings per share was due primarily to the
repurchase of the Company's common stock during the quarter ended September 30,
1996.  The weighted average number of shares decreased from 13.7 million to
13.0 million.

Nine-Month period ended September 30, 1996 compared to nine-month period ended
September 30, 1995.

     Revenues for the nine-month period ended September 30, 1996 declined $9.6
million, or 8.6% compared to the revenues for the nine-month period ended
September 30, 1995.  The decrease was primarily due to a decrease in sales to
international customers of approximately $11.7 million.  This decrease was
partially offset by an increase in revenues to domestic customers.

     Approximately 84% of the decline in revenues for the nine-month period
ended September 30, 1996 compared to the same period of 1995 occurred in the
first three months of the period.  Although the Company's operating results can
vary significantly from period to period, management believes the decline in
the Company's revenues for this period was related to customer inventory
adjustments and a transition in marketing strategy on the part of a number of
customers.  Accordingly, management believes these events do not reflect a
fundamental change in the Company's business in particular, or the lottery
industry in general, although it is expected 



                                       13
<PAGE>   14


that new contracts with either new or existing customers will be subject to
strong price competition.

     Gross margins decreased to 38.7% for the nine-month period ended September
30, 1996 from 40.5% for the nine-month period ended September 30, 1995.  The
decrease was due primarily to the loss of gross profits related to the decrease
in instant ticket revenues as described above, most of which occurred in the
first quarter of 1996.  Margins were also negatively impacted by the costs
associated with installation of ultra violet coating equipment on ticket
printing presses at the Company's Alpharetta and Gilroy plants.  The decrease
was partially offset by a larger percentage of the revenues being produced in
the lower cost Alpharetta plant as compared to the Gilroy plant and the lack of
new equipment start up costs, most of which were accrued in 1995.

     SG&A expenses increased $1.5 million for the nine-month period of 1996
over the same period of 1995.  These expenses also increased as a percentage of
revenues to 12.2% from 9.8%.  The dollar increase was due primarily to an
increase in domestic and international marketing and sales expenses, including
the accrual of trade show expenses, travel costs, the cost of sample tickets
for competitive bids and an increase in overall compensation costs.  The
percentage increase was due to a dollar increase in SG&A expenses, as well as
lower revenues in the nine-month period ended September 30, 1996 as compared to
the same period in 1995.

     Depreciation and amortization expenses decreased for the nine-month period
ended September 30, 1996 by 2.6% or $174,000 over the comparable period of
1995.  The current level of depreciation expense was, prior to the Opax
Acquisition, expected to decrease by approximately $200,000 during
the fourth quarter of 1996, due to the full depreciation of certain assets
written-up at the time of the leveraged buy-out by Management and others in
1991. Depreciation in 1995 was at a lower rate in the first three months of the
year since significant depreciation for the capital expansion equipment had not
commenced in that period;  however, the second quarter of 1995 contained a
higher level of depreciation due to the write-down of certain capital equipment
which was taken out of service.

     Interest income for the nine-month period ended September 30, 1996
exceeded the nine-month period ended September 30, 1995 due to an increase in
cash and cash equivalents.  Interest expense decreased because of a lower
capitalized lease balance. Interest income for the nine-month period ended
September 30, 1996 increased $406,000 over the nine-month period ended September
30, 1995.  The decline in interest expense was $219,000. Gains on foreign
currency increased by $623,000, due mainly to activity related to preparation
for the Opax Acquisition, as well as net foreign currency gains related to non
U. S. dollar transactions.

     Net income decreased 20% for the nine-month period ended September 30,
1996 and was $13.2 million, compared to $16.5 million for the period ended
September 30, 1995. The effective tax rate for the nine-month periods ended
September 30, 1996 and September 30, 1995 was 40.0% and 40.1%, respectively.

     Earnings per common share for the nine-month period ended September 30,
1996, was 98 cents per share compared to $1.21 per share for the same



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period in 1995.  The 19% decrease in earnings per share was due to a 20%
decrease in net earnings partially offset by the Company's repurchase of
approximately 1.2 million shares of common stock during the quarter ended
September 30, 1996. The weighted average number of shares decreased from 13.6
million to 13.5 million.


LIQUIDITY AND CAPITAL RESOURCES

SEPTEMBER 30, 1996 VERSUS SEPTEMBER 30, 1995

     For the nine-month period ended September 30, 1996, net cash provided by
operating activities decreased $1.6 million, to $14.7 million from $16.2
million for the comparable period in 1995.  The decrease was due primarily to a
decrease in net income. There was no change in working capital generated over
the nine-month periods ended September 30, 1996 and 1995, at $7.2 million.

     Purchases of property and equipment for the nine-month period ended
September 30, 1996 were lower by $6.9 million as compared to the same period on
1995 due to the completion of the Company's major capital expansion project.
Such project was essentially completed in the first half of 1995.  The cash and
cash equivalents balance was $22.6 million as of September 30, 1996, which was
$5.6 million higher than the balance at September 30, 1995.

     On July 25, 1996, the Company announced that its Board of Directors
approved the purchase in the open market over the next twelve months of up to
2.1 million shares of the Company's common stock. During the third quarter, the
Company purchased approximately 1.2 million shares at a cost of $23.4 million.
The timing of future purchases and the total number of shares actually
purchased will be dependent on the Company's liquidity position and future
market conditions.


     In connection with the October 1, 1991 acquisition of the Company from
Bally Manufacturing Corporation ("Bally"), the Company agreed to make an earn
out payment (the "Earnout") of up to $5 million on April 30, 1997 if total
cumulative earnings before income taxes, depreciation and amortization
("EBITDA") from October 1, 1991 through December 31, 1996 equal or exceed $95.4
million. At September 30, 1996, cumulative EBITDA from October 1, 1991 exceeded
$95.4 million without any Adjustments as discussed below. Management believes
that the Company has competing claims, offsets and other potential adjustments
(collectively, "Adjustments") which could reduce the amount ultimately
determined to be owed to Bally, if any. However, the effect of such Adjustments
cannot be quantified at this time and there can be no assurance that such
Adjustments ultimately will affect the timing or amount of any Earnout payments
which may be required. The amount, if any, paid to Bally under the Earnout will
be reported as an intangible and amortized over 35 years.

     In light of the Company's stock buy-back program, the purchase of SGIL,
the purchase of contracts and the right to conduct business with customers of
ILS Systems, b.v., the cost of the two representation 


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<PAGE>   16

agreements, the potential payment to Bally, the cash requirements of the
potential lease of SciScan Technology, as well as other potential investment
opportunities and working capital requirements, management believes the Company
may require additional borrowing capacity. The Company has a commitment for an
$80 million, three year revolving credit facility ("Agreement") with two, one
year extension options with the consent of the lenders. The Agreement will offer
borrowing rate options under prime rate, London Interbank Offered Rate
("LIBOR")or Interbank Offered Rate ("IBOR") plus or minus an applicable margin
depending on the type of borrowing and the Company's Debt to Total
Capitalization Ratio as to be defined in the Agreement. Borrowings under the
Agreement are expected to be available at interest rates at least as favorable
to the Company as under its existing Bank Credit Agreement. The Agreement is
expected to contain covenants that, among other things, require the Company to
not exceed a defined Debt to Total Capitalization Ratio, maintain a certain
Fixed Charge Ratio, not permit liens of assets to exceed designated amounts, and
not permit asset sales above a certain level.

     The Company expects that its cash balance, cash flows from operations and
the availability of funds from its revolving credit facility should permit it
to meet anticipated acquisitions, capital expenditures, working capital and
fund future growth as new business opportunities arise.



PART II - OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS


          There have been no material developments in the dispute with Empresa
     Colombiana de Recursos para la Salud, S.A. ("Ecosalud") except as follows:
     The complaint filed in the Northern District of Georgia, Atlanta
     Division, and styled Empresa Colombiana de Recursos para la Salud, S.A. v.
     Scientific Games, Inc., Civil Action No. 1 96-CV-1586, was served on
     Scientific Games Inc. ("SGI") on July 15, 1996 (the "Complaint").

          In response to the Complaint, SGI filed a motion to dismiss the
     action on multiple grounds, including an arbitration clause contained
     within the contract and the doctrine of forum non conveniens. Ecosalud
     then filed an "Amended Complaint" in which it withdrew its claim for in
     excess of $84,000,000 and, instead, seeks collection of $5,000,000 under
     an "Executive Title", a purported joint and several guarantee by the
     Company, Wintech and other shareholders in Wintech that certain levels of
     lottery ticket sales would be attained. In addition, Ecosalud also seeks
     attorneys' fees and interest on the claim. The Company anticipates it will
     file a motion to dismiss the Amended Complaint on the grounds, inter alia,
     that litigation involving the same subject matter is pending in Colombia.

          SGI intends to vigorously defend such litigation and has been advised
     by counsel that SGI has numerous defenses on the merits, as well as
     procedural defenses to the litigation. Although it is not possible to
     determine the outcome of such litigation, either in


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<PAGE>   17


     Georgia or Colombia, or the other related surety and indemnity claims, 
     management believes based upon, among other things, the advice of counsel, 
     that adequate provision has been made for such claims and the disposition 
     thereof should not materially adversely affect the Company's consolidated 
     financial condition or consolidated results of operations.

          A more detailed discussion of the above-referenced matters, prior to
     developments described above, is set forth in the Company's report on Form
     8-K filed with the Commission on July 5, 1996.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

     #10.47                 Instant Lottery Ticket Supply Agreement by and 
                            between Scientific Games Inc., Camelot Group PLC 
                            and Thomas De Le Rue Limited, dated June 12, 1996.
                            Confidential treatment has been requested for 
                            portions of this exhibit.

     #11                    Computation of Per Share Earnings

     #27                    Financial Data Schedule (for SEC use only)


     (b)  Reports on Form 8-K

          On July 5, 1996 the Company filed an 8-K relating to a lawsuit
          filed by Ecosalud, an agency of the Colombian government, against the
          Company.

          On August 2, 1996 the Company filed an 8-K announcing its intent to
          repurchase up to 2.1 million shares of its currently outstanding
          common stock in the open market, over the next twelve months.

          On October 15, 1996 an 8-K was filed disclosing the Company's
          acquisition of OPAX International Limited, a United Kingdom
          corporation.




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                                  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:  November 14, 1996            By:  /s/ WILLIAM G. MALLOY
                                         -------------------------------
                                             William G. Malloy
                                             President and
                                             Chief Executive Officer
                                  
                                  
Date:  November 14, 1996            By:  /s/ CLIFF O. BICKELL
                                         -------------------------------
                                             Cliff O. Bickell
                                             Vice President, Treasurer,
                                             and Chief Financial Officer



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