UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-K/AAmendment No. 1

|(Mark One)                                                     |                                                                                         
|-------------------------------------------------------------- | ----------------------------------------------------------------------------------------
|ý                                                              | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934    
|For the fiscal year ended June 30, 2007                       
|OR                                                            
|o                                                              | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|For the transition period
from                              to

Commission File Number 0-4281

BALLY TECHNOLOGIES, INC.(Exact name of registrant as specified in its charter)

|NEVADA(State or other jurisdiction of
incorporation or organization) | 88-0104066(I.R.S. Employer
Identification No.)
|-------------------------------------------------------------------- | ----------------------------------------------

6601 S. Bermuda Rd. Las Vegas, Nevada 89119(Address of principal executive offices)

Registrant's
telephone number, including area code: (702) 584-7600

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.10 par value per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act.    o  Yes    ý  No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act.    o  Yes    ý  No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days.    o  Yes    ý  No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.    o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of "accelerated filer
and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one):

|ý  Large Accelerated Filer | o  Accelerated Filer | o  Non-Accelerated Filer
|-------------------------- | -------------------- | ------------------------

Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).    o  Yes    ý  No

The aggregate market value of the registrant's common stock, $0.10 par value, held by non-affiliates of the registrant, computed based on the closing sales price as
of December 29, 2006 of $18.68 per share as reported by the New York Stock Exchange was approximately $917,300,000.

According
to the records of the registrant's registrar and transfer agent, the number of shares of the registrant's common stock, $0.10 par value, outstanding as of January 8, 2008 was
54,673,000, which does not include 738,000 shares held in treasury.

DOCUMENTS INCORPORATED BY REFERENCENone.



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EXPLANATORY NOTE

Bally
Technologies, Inc. ("Bally", the "Company" or the "Registrant") hereby amends its Annual Report on Form 10-K for the fiscal year ended June 30, 2007, originally
filed with the Securities and Exchange Commission (the "SEC") on November 2, 2007 (the "Original 10-K"), to include the information required to be disclosed by Part III of
Form 10-K. The information set forth in this Amendment No. 1 to the Original 10-K (this "Amendment") replaces the information set forth in Part III of the
Original 10-K in its entirety. No other Part, Item or section of the Original 10-K is being amended herby.

PART III

ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The
following table and accompanying information sets forth the names of, and certain information with respect to, each of the directors, executive officers and other significant employees of the
Company.

|Name                 |  | Age |  | Position with the Company                                      
|-------------------- |  | --- |  | ---------------------------------------------------------------
|Jacques André        |  | 70  |  | Director(1)(3)(4)                                              
|Robert Guido         |  | 61  |  | Director(2)(4)                                                 
|David Robbins        |  | 48  |  | Director and Chairman of the Board(2)(3)(4)                    
|Kevin Verner         |  | 49  |  | Director(2)(3)                                                 
|Richard Haddrill     |  | 54  |  | Director and Chief Executive Officer(1)                        
|Robert C. Caller     |  | 57  |  | Executive Vice President, Chief Financial Officer and Treasurer
|Michael Gavin Isaacs |  | 43  |  | Executive Vice President and Chief Cooperating Officer         
|Robert Luciano       |  | 49  |  | Chief Technology Officer                                       
|Ramesh Srinivasan    |  | 47  |  | Executive Vice President Bally Systems                         

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The
Company's bylaws provide that the Board of Directors shall consist of no fewer than three nor more than nine directors, with the exact number to be fixed by the Board of Directors. The Board of
Directors has fixed the number of directors at five, two of whom will be elected at the Meeting. The Company's bylaws divide the Board of Directors into three classes as nearly equal in number as
possible, with the three-year terms of office of each class ending in different years.

Directors, Executive Officers and Other Significant Employees

The
following sets forth information about the members of the Board of Directors, certain of the Company's named executive officers and certain significant employees and their business experience, and
other pertinent information.

Richard Haddrill.Mr. Haddrill became a director in April 2003 and, effective October 1, 2004, was appointed Chief
Executive Officer. Prior to becoming the Company's CEO, Mr. Haddrill most recently served as CEO and as a member of the board of directors of Manhattan Associates, Inc., a global

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leader
in software solutions to the supply chain industry. He continued to serve as Vice Chairman of the board of Manhattan Associates until May 2006. Mr. Haddrill also served as
President and CEO for Powerhouse Technologies, Inc., a technology and gaming company, from September 1996 to June 1999, when Powerhouse was acquired by Anchor Gaming.
Mr. Haddrill currently serves on the board of directors of TrueDemand Software, Inc. Mr. Haddrill previously served on the boards of directors of Danka Business Products, a
digital imaging systems products provider and services producer from June 2002 to October 2004, and Outlooksoft, a provider of corporate performance management solutions from
May 2003 to June 2005.

Robert C. Caller.Mr. Caller, age 57, joined Bally as Executive Vice President, Chief Financial Officer and Treasurer in
April 2006. From 1983 to 2006, he was a partner at Ernst & Young ("E&Y"), most recently working in the Denver office, where he served several publicly held companies as well as several
companies involved in the gaming industry. He started his career with E&Y in the Houston office in 1972, and was the managing partner of E&Y's Albuquerque office from 1990 to 1991 before transferring
to the Denver office.

Michael Gavin Isaacs.Mr. Isaacs, age 43, joined Bally as Executive Vice President and Chief Operating Officer on
September 1, 2006. From 1999 to 2006, Mr. Isaacs worked for Aristocrat Leisure Limited, a gaming equipment and systems company. During his tenure with Aristocrat, he served in key
management positions, including General Manager, Global Marketing and Business Development, and Managing Director, Europe. In March 2003, he was named to the position of Americas President.
Before joining Aristocrat, Mr. Isaacs was a partner with the Australia law firm Phillips Fox. Mr. Isaacs is a trustee of the International Association of Gaming Attorneys.

David Robbins.Mr. Robbins rejoined Bally as a director and Chairman of the Board in December 1997. Mr. Robbins
previously served as a director from July 1994 to September 1997 and as the Chairman of the Board from February 1997 to September 1997. From 1984 to 2004, he practiced
corporate, securities and real estate law as an associate and then partner at various law firms. Mr. Robbins was also licensed as a certified public accountant (inactive status) in the state of
New York. Since January 1996, Mr. Robbins has co-managed private equity investments in the health care and real estate fields. He serves on the boards or steering committees
of Columbia University Medical Center's Science and Technology Council, the McCarton Foundation, NYU Comprehensive Epilepsy Center and various private companies in which the heath care fund that he
co-manages has made investments.

Jacques André.Mr. André became a director in August 1996. Mr. André
previously served as a Vice President of A.T. Kearney Executive Search, a global management consulting firm, from October 2002 to his retirement in February 2005. From 1975 to 2002,
Mr. André was a partner and from 1980 to 2002 he was a member of the board of directors of Ray & Berndtson, Inc., an international executive search firm. From 1997
to 2003, Mr. André served as a member of the board of directors for the Association of Executive Search Consultants.

Robert Guido.Mr. Guido became a director in December 2006. Mr. Guido retired from E&Y where he was Vice Chair and
Chief Executive Officer of E&Y's Assurance and Advisory Practice. In this role, he was responsible for overall business strategy and had significant dealings with both the Securities and Exchange
Commission and Public Company Accounting Oversight Board on behalf of the firm. During his 38-year career at E&Y, Mr. Guido also co-chaired the firm's global client
steering committee and served as a senior advisory or engagement partner to numerous global companies. Since April of 2007, Mr. Guido has served as a member of the board of directors of
Commercial Metals Company, a manufacturer, recycler and distributor of steel and metal products globally. Since May of 2007, Mr. Guido has also been a member of the Board of Trustees and
chairman of the audit committee of Siena College, a liberal arts college near Albany, NY.

3

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Kevin Verner.Mr. Verner became a director in April 2001. From 1997 to 2000, Mr. Verner held various positions with
WMS Industries, Inc., a gaming equipment company, the last of which was Chief Operating Officer. Prior to his employment at WMS, Mr. Verner was Vice President of New Business Development
at R.J. Reynolds Tobacco Co., where he held various marketing and senior management positions for sixteen years. Since 2000, Mr. Verner has been a consultant and provides interim management to
early-stage companies, including financial planning, securing seed funding, management recruitment and development of operating budgets, and pro forma financial projections. Mr. Verner is also
a CEO advisor for the Chicago-based venture fund Alpha Capital Fund III, and provides consultation on enterprise valuation and due diligence for consumer products investments.

Mark Lerner.Mr. Lerner, age 58, joined Bally in December 1996 as Assistant General Counsel and was appointed General Counsel
in 2000. Mr. Lerner has practiced law since 1980. Over the course of his career, Mr. Lerner has served as a deputy attorney general for the Nevada Gaming Commission and State of Nevada
Gaming Control Board, general counsel to Becker Gaming, Inc., a Las Vegas gaming company, and, from 1987 to 1994, an attorney at Jones, Jones, Close & Brown (now Jones Vargas), a Las
Vegas commercial and litigation law firm.

Robert Luciano.Mr. Luciano, age 49, joined Bally in March 2004 in connection with the Company's acquisition of Sierra Design
Group ("SDG") and became the Company's Chief Technology Officer on October 1, 2004. Mr. Luciano founded SDG in 1996 as a research, development and consulting company focusing on the
gaming industry. Prior to founding SDG, Mr. Luciano was employed by IGT in the position of Vice President of Advanced Engineering. Prior to joining IGT, Mr. Luciano held several
engineering positions with a variety of companies including Soabar, a division of Avery International, and Mobil Oil Corporation.

Ramesh Srinivasan.Mr. Srinivasan, age 47, joined Bally in March 2005 as Executive Vice President of Bally Systems.
Mr. Srinivasan is responsible for the Company's worldwide Systems business including sales, product development, implementation services and customer support. From 1998 to 2005,
Mr. Srinivasan held several positions including Executive Vice President of Warehouse Management
Systems from 2003 to 2005 at Manhattan Associates, Inc., a global leader in software solutions to the supply chain industry.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a)
of the Securities Exchange Act of 1934, as amended, requires the Company's directors and executive officers, and persons who own more than 10 percent of a registered class
of the Company's equity securities, to file with the SEC and the New York Stock Exchange (the "NYSE") initial reports of ownership and reports of changes in ownership of the Company's common stock and
other equity securities. To the Company's knowledge, all Section 16(a) filing requirements applicable to the Company's directors, executive officers, and greater than 10 percent
beneficial owners were complied with on a timely basis during the fiscal year ended June 30, 2007.

Code of Ethics

The
Company has a Code of Ethics and Business Conduct applicable to all employees, including the chief executive, chief financial and principal accounting officers, as well as the Company's directors
(the "Code of Ethics"). In the event the Company makes any amendment to, or grants any waiver from, a provision of the Code of Ethics that applies to the Company's principal executive officer,
principal financial officer or principal accounting officer that requires disclosure under applicable SEC rules, the Company intends to disclose such amendment or waiver and the reasons therefor on
the Company's website, www.ballytech.com. The full text of the Code of Ethics is available by following links to "Investor Relations" and "Governance" on the Company's website www.ballytech.com, or
upon written

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request
to: Bally Technologies, Inc., 6601 South Bermuda Road, Las Vegas, Nevada 89119, Attention: Corporate Secretary.

Audit Committee

The
Board of Directors has a standing Audit Committee, Nominating and Corporate Governance Committee and Compensation Committee.

The
Audit Committee of the Board of Directors is comprised of Messrs. Guido (Chair), Robbins, and Verner. The Audit Committee, among other things, reviews and engages or re-engages
an independent accounting firm to audit the Company's financial statements for the then-current fiscal year; reviews and determines the policies and procedures of the Company and
management in maintaining the Company's books and records and furnishing information necessary to the independent auditors; reviews and determines the adequacy and implementation of the Company's
internal controls, including the internal audit function and the adequacy and competency of the related personnel; and reviews and determines such other matters relating to the Company's financial
affairs and accounts as the Audit Committee may in its discretion deem desirable.

The
Audit Committee is governed by a charter adopted by the Board of Directors. The charter is available on the Company's website at www.ballytech.com by following the links to "Investor Relations"
and "Governance" or upon written request to the Company, as set forth above under "Code of Ethics." The Board of Directors has affirmatively determined that Messrs. Guido, Robbins,
and Verner are independent under the Company's Independence Guidelines and Section 303A.02 of the NYSE Listed Company Manual, and are financially literate, as required by
Section 303A.07(a) of the NYSE Listed Company Manual, as such qualification is interpreted by the Company's Board of Directors in its business judgment. In addition, the Board of Directors has
determined that Messrs. Guido and Robbins are audit committee financial experts, as required by Item 407(d)(5) of Regulation S-K. The Board of Directors made this
determination based on Messrs. Guido's and Robbins's qualifications and business experience, as briefly described above under "Directors, Executive Officers and Other Significant
Employees." The Audit Committee met eleven times during the fiscal year ended June 30, 2007.

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ITEM 11.    EXECUTIVE COMPENSATION

Fiscal Year 2007 Summary Compensation Table

The
following table sets forth compensation information for the Company's Chief Executive Officer, Chief Financial Officer and three other most highly compensated executive officers who were serving
as executive officers as of June 30, 2007 (collectively, the "Named Executive Officers") in respect of fiscal year 2007.

|Name and Principal Position                                                 |  | Year |  | Salary
($) |     | Bonus
($) |     | Stock
Awards(1)
($) |  | Option
Awards(1)
($) |  | Non-Equity
Incentive Plan
Compensation(2)
($) |     | All Other
Compensation
($) |     | Total
($)
|--------------------------------------------------------------------------- |  | ---- |  | ---------- | --- | --------- | --- | ------------------- |  | -------------------- |  | --------------------------------------------- | --- | -------------------------- | --- | ---------
|Richard Haddrill
President and Chief Executive Officer                      |  | 2007 |  | 998,000    |     |          |     | 3,134,598           |  | 1,537,597            |  |                                              | (3) | 37,750                     | (4) | 5,707,945
|Robert Caller
Executive Vice President, Chief Financial Officer & Treasurer |  | 2007 |  | 340,000    |     |          |     | 41,837              |  | 511,964              |  | 214,200                                       |     | 6,750                      | (5) | 1,114,751
|Michael Gavin Isaacs
Executive Vice President and Chief Operating Officer   |  | 2007 |  | 269,385    | (6) | 10,000    | (7) | 163,010             |  | 294,005              |  | 193,723                                       |     | 150,000                    | (8) | 1,080,123
|Robert Luciano
Chief Technology Officer                                     |  | 2007 |  | 250,000    |     | 50,000    | (9) |                    |  | 1,986,900            |  | 171,000                                       |     |                           |     | 2,457,900
|Ramesh Srinivasan
Executive Vice President, Bally Systems                   |  | 2007 |  | 275,000    |     |          |     | 75,313              |  | 394,969              |  | 188,100                                       |     |                           |     | 933,382  

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6

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Fiscal Year 2007 Grants of Plan-Based Awards

The
following table sets forth information concerning awards of stock options and restricted stock made to each of the Named Executive Officers during fiscal year 2007.

|                     |  |                            |  |                              |  | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) |  |             |  |             |  |            |     |            
|-------------------- |  | -------------------------- |  | ---------------------------- |  | ------------------------------------------------------------------ |  | ----------- |  | ----------- |  | ---------- | --- | -----------
|
|
|Richard Haddrill     |  |                            |  |                              |  |                                                                   |  |            |  |            |  |           |     |           
|Robert Caller        |  | 8/9/2006
9/12/2006         |  | 8/9/2006
9/12/2006           |  | 81,600
                                                           |  | 204,000
   |  | 346,800
   |  | 
2,461    | (5) | 
        
|Michael Gavin Isaacs |  | 8/9/2006
9/1/2006
9/1/2006 |  | 8/9/2006
5/22/2006
5/22/2006 |  | 68,000

                                                         |  | 170,000

 |  | 289,000

 |  | 
50,000
 |     | 

150,000
|Robert Luciano       |  | 8/9/2006                   |  | 8/9/2006                     |  | 60,000                                                             |  | 150,000     |  | 255,000     |  |           |     |           
|Ramesh Srinivasan    |  | 8/9/2006
9/12/2006         |  | 8/9/2006
9/12/2006           |  | 66,000
                                                           |  | 165,000
   |  | 280,500
   |  | 
3,172    | (5) | 
        

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Employment Agreements with Named Executive Officers

The
following contains brief summaries of certain provisions of the employment agreements with each of the Named Executive Officers. Provisions providing for severance and change in control payments
are described in the "Potential Payments upon Termination or Change in Control at Fiscal Year-End 2007" section of this proxy.

Haddrill Employment Agreement.On June 30, 2004, the Company entered into the Haddrill Agreement, effective as of October 1,
2004. The Haddrill Agreement provided for an initial salary of $980,000 per year, a grant of 500,000 stock options, $6,500,000 in RSUs and other benefits, and required Mr. Haddrill
to purchase $1,000,000 of Company common stock in the open market using his personal funds. The Haddrill Agreement was amended on December 22, 2004 to provide for, among other things, a grant
of an additional 300,000 stock options and $1,900,000 in RSUs. The Haddrill Agreement was amended for a second time effective as of June 13, 2005, to document the terms and conditions of the
acceleration of certain of Mr. Haddrill's stock options, which was approved by the Board of Directors on June 13, 2005 as well as to conform the terms of Mr. Haddrill's RSUs to
Section 409A of the Code.

On
June 21, 2006, the Haddrill Agreement was amended for a third time. This amendment provided that Mr. Haddrill's term of employment was extended from October 1, 2007, to
January 1, 2009 and that Mr. Haddrill's salary, beginning July 1, 2006, was increased from $980,000 to $998,000. This amendment also provided that, subject to the approval of the
Compensation Committee, Mr. Haddrill

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would
receive an additional 200,000 options to purchase common stock and a number of shares of restricted common stock having a value equal to $1,400,000 as of the date of grant.

The
Haddrill Agreement also prohibits Mr. Haddrill from entering into business arrangements with specific competitors for a period of two years, or from engaging in activities that compete with
the Company for one year after termination, regardless of the reason for termination. Mr. Haddrill is prohibited from soliciting the Company's customers, employees or consultants for one year
after termination, regardless of the reason for termination.

Caller Employment Agreement.    On March 13, 2006, the Company entered into the Caller Agreement, effective as of April 1, 2006
through September 30, 2009. Pursuant to the Caller Agreement, Mr. Caller receives an annual salary of $340,000. For fiscal year 2007, Mr. Caller was guaranteed a minimum
performance bonus of $160,000 under the MIP. For fiscal years 2008 and 2009, Mr. Caller's target performance bonus is $204,000, but with a maximum of $347,000. For the period from
July 1, 2009 to September 30, 2009, Mr. Caller's bonus will be at least $51,000. The Company may pay up to 30% of any performance bonus in shares of restricted stock.
Mr. Caller also received a one time signing bonus payment of $100,000, subject to certain relocation conditions, as well as reimbursement for expenses incurred in connection with trips related
to his relocation to Las Vegas. Mr. Caller also received a grant of 175,000 stock options pursuant to the Caller Agreement.

The
Caller Agreement prohibits Mr. Caller from engaging in activities that compete with the Company for one year after termination for Cause or upon voluntary termination, and for the duration
he receives salary continuation after a termination without Cause. Mr. Caller is prohibited from soliciting the Company's customers, employees or consultants for one year after termination,
regardless of the reason for termination.

Isaacs Employment Agreement.    On June 19, 2006, the Company entered into the Isaacs Agreement, effective September 1, 2006.
Pursuant to the Isaacs Agreement, Mr. Isaacs receives an annual salary of
$340,000 and is entitled to participate in the MIP as well as the Company's employee benefit programs. Mr. Isaacs target performance bonus is $204,000 per year, but with a maximum of $347,000
per year. The Company may pay up to 30% of the amount of any bonus in restricted stock. Mr. Isaacs also received a one time signing bonus payment of $10,000 and receives an annual allowance of
$150,000 for a period of two years in respect of his transition to becoming a permanent United States-based employee. Mr. Isaacs also received a grant of 150,000 options as well as 50,000
shares of the Company's restricted stock pursuant to the Isaacs Agreement.

The
Isaacs Agreement prohibits Mr. Isaacs from soliciting the Company's customers, employees or consultants for one year after termination, regardless of the reason for termination.

Luciano Employment Agreement.    On March 2, 2004, the Company entered into the Luciano Agreement. The Luciano Agreement provides for a
base salary, which is currently set at $250,000 per year, an annual bonus of $50,000 and participation in the MIP. On April 13, 2005, the Company entered into an amendment to the Luciano
Agreement (the "Luciano Amendment") providing for, among other things, the grant of 600,000 stock options.

The
Luciano Agreement prohibits Mr. Luciano from engaging in activities that compete with the Company for three and one half years from March 2, 2004, and one year after termination for
Cause or upon voluntary termination. The Luciano Agreement also provides that the Company may elect to extend the non-competition period for an additional 12 months beyond its then
current term by agreeing to pay Mr. Luciano an additional $250,000 and the continued vesting of all option awards if the election occurs prior to the termination of Mr. Luciano without
Cause. Mr. Luciano is prohibited from soliciting the Company's customers, employees or consultants for six months after termination, regardless of the reason for termination.

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Srinivasan Employment Agreement.    On March 9, 2005, the Company entered into the Srinivasan Agreement. The Srinivasan Agreement
provides for a base salary, which is currently set at $275,000 per year, an annual bonus of up to 100% of Mr. Srinivasan's base salary, but in no case less than $50,000, as well as
participation in the MIP. Mr. Srinivasan also received a grant of 300,000 stock options and 20,000 shares of restricted stock pursuant to the Srinivasan Agreement.

The
Srinivasan Agreement prohibits Mr. Srinivasan from engaging in activities that compete with the Company for one year after termination for Cause or upon voluntary termination, and for the
duration he receives salary continuation after a termination without Cause. Mr. Srinivasan is prohibited from soliciting the Company's customers, employees or consultants for one year after
termination, regardless of the reason for termination.

Outstanding Equity Awards at Fiscal Year-End 2007

The
following table sets forth the outstanding equity awards held by the Named Executive Officers as of June 30, 2007.

|                     |  | Option Awards                                      |  | Stock Awards                 
|-------------------- |  | -------------------------------------------------- |  | -----------------------------
|
|Richard Haddrill     |  | 50,000
195,000
405,000
95,000
133,333
35,000


 |  | 



166,667

200,000


|Robert Caller        |  | 70,000                                             |  | 105,000                      
|Michael Gavin Isaacs |  | 
                                                |  | 150,000
                    
|Robert Luciano       |  | 240,000
120,000                                    |  | 360,000
480,000              
|Ramesh Srinivasan    |  | 195,000

                                        |  | 105,000

                  

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Option Exercises and Stock Vested in Fiscal Year 2007

The
following table sets forth information concerning value realized by each of the Named Executive Officers upon the vesting of stock awards during fiscal year 2007. No Named Executive Officer
exercised any stock options during fiscal year 2007.

|                     |  | Option Awards |  | Stock Awards
|-------------------- |  | ------------- |  | ------------
|
|Richard Haddrill     |  |              |  |            
|Robert Caller        |  |              |  |            
|Michael Gavin Isaacs |  |              |  |            
|Robert Luciano       |  |              |  |            
|Ramesh Srinivasan    |  |              |  |            

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Fiscal Year 2007 Non-Qualified Deferred Compensation

The
following table sets forth information regarding deferrals by the Named Executive Officers under Non-Qualified Deferred Compensation Plans during fiscal year 2007.

|Name                 |  | Executive
Contributions
in Last FY
($) |           | Registrant
Contributions
in Last FY
($) |   | Aggregate
Earnings in
Last FY
($) |   | Aggregate
Withdrawals/
Distributions
($) |     | Aggregate
Balance at
Last FYE
($) | 
|-------------------- |  | -------------------------------------- | --------- | --------------------------------------- | - | --------------------------------- | - | ---------------------------------------- | --- | --------------------------------- | 
|Richard Haddrill(1)  |  | $                                      | 3,735,521 | (2)                                     |  |                                   | $ | 4,460,047                                | (3) |                                  | 
|Robert Caller        |  |                                        |          |                                         |  |                                   |   |                                         |     |                                  | 
|Michael Gavin Isaacs |  |                                        |          |                                         |  |                                   |   |                                         |     |                                  | 
|Robert Luciano       |  |                                        |          |                                         |  |                                   |   |                                         |     |                                  | 
|Ramesh Srinivasan    |  |                                        |          |                                         |  |                                   |   |                                         |     |                                  | 

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Potential Payments upon Termination or Change in Control at Fiscal Year-End 2007

The
following tables set forth certain information regarding potential payments and other benefits that would have been provided to each of the Named Executive Officers upon a change in control of the
Company and/or upon a termination of the Named Executive Officer's employment at fiscal year-end 2007. For purposes of this section, "CIC" shall mean a change in control of the Company.
All other capitalized terms included in quotes are defined following the summary of the respective agreement.

Haddrill Employment Agreement.    The Haddrill Agreement, as amended, provides that if Mr. Haddrill's employment is terminated by the
Company other than for cause or by Mr. Haddrill for "Good Cause," Mr. Haddrill will receive severance pay in an amount equal to his base salary for one year from the date of termination
or until the expiration of the term of the Haddrill Agreement, whichever occurs first. Further, Mr. Haddrill shall be entitled to retain the rights granted under the RSUs provided that the
vesting of the RSUs shall be pro rated through the twelve-month period following the month in which the termination occurs, and the sales restrictions on the stock options granted pursuant to the
Haddrill Agreement, as amended, shall lapse as to a pro rata portion of such options through the date

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of
termination. Upon a "Change in Control," Mr. Haddrill will receive a payment of $980,000 and will be entitled to retain all of the RSUs and stock options granted pursuant to the Haddrill
Agreement, all of which will vest immediately upon the Change in Control, and the sale restrictions on the stock options will immediately lapse. To the extent any excise taxes are imposed under
Section 4999 of the Code, Mr. Haddrill will be entitled to additional payments to offset the additional excise taxes and additional income taxes or interest penalties associated with the
additional payments.

Post-employment PaymentsRichard Haddrill

|Executive Payments and
Benefits upon Termination/CIC |                                         | Involuntary Termination for Cause |     | Involuntary Termination Without Cause |   | CIC without Termination |           | CIC with
Termination for
Good Reason or
Without Cause |            | Death     |     | Disability |          
|---------------------------------------------------- | --------------------------------------- | --------------------------------- | --- | ------------------------------------- | - | ----------------------- | --------- | ----------------------------------------------------- | ---------- | --------- | --- | ---------- | ---------
|Severance                                            |                                         | $                                 | 0   |                                       | $ | 998,000                 |           | $                                                     | 998,000    |           | $   | 998,000    |          
|Long-term Incentive(1)                               |                                         |                                   |     |                                       |   |                         |           |                                                       |            |           |     |            |          
|                                                     | Acceleration of Unvested Stock Options |                                   |     | 0                                     |   |                         | 2,178,338 |                                                       |            | 4,448,338 | (2) |            | 4,448,338
|                                                     | Acceleration of Unvested RS/RSUs       |                                   |     | 0                                     |   |                         | 5,197,124 |                                                       |            | 5,768,305 |     |            | 5,768,305
|280G Tax Gross-up                                    |                                         |                                   | N/A |                                       |   | N/A                     |           |                                                       | 0          | (3)       |     | 0          | (3)      
|                                                     |                                         |                                   |     |                                       |   |                         |           |                                                       |            |           |     |            |          
|Total                                                |                                         | $                                 | 0   |                                       | $ | 8,373,462               |           | $                                                     | 11,214,643 |           | $   | 11,214,643 |          
|                                                     |                                         |                                   |     |                                       |   |                         |           |                                                       |            |           |     |            |          

---



12

---





Caller Employment Agreement.    If Mr. Caller's employment is terminated without "Cause" or if Mr. Caller terminates his
employment as a result of a "Diminution of Duties" occurring within one year following a "Change in Control," he shall continue to receive his salary for one year immediately following such
termination, unless such termination occurs on or after September 30, 2008, in which case he will only receive such payments until September 30, 2009. In the event Mr. Caller
terminates his employment as a result of a Diminution of Duties occurring within one year following a Change in Control, each unvested installment of options granted pursuant to the Caller Agreement
will be deemed to have vested on the date of such termination and shall be exercisable for one year from such date. If Mr. Caller's employment is terminated without Cause, any installment that
would have vested within one year of the date of termination will vest and, along with any other previously vested options, shall be exercisable for one year thereafter. If Mr. Caller's
employment is terminated with Cause or if he
quits for any reason, he will have ninety days to exercise any options that have vested as of the date of such termination.

Post-employment PaymentsRobert Caller

|Executive Payments and
Benefits upon Termination/CIC |                                         | Involuntary Termination for Cause |     | Involuntary Termination Without Cause |   | CIC without Termination |         | CIC with
Termination for
Good Reason or
Without Cause |     | Death |   | Disability
|---------------------------------------------------- | --------------------------------------- | --------------------------------- | --- | ------------------------------------- | - | ----------------------- | ------- | ----------------------------------------------------- | --- | ----- | - | ----------
|Severance                                            |                                         | $                                 | 0   |                                       | $ | 340,000                 |         | $                                                     | 0   |       | $ | 340,000   
|Long-term Incentive(1)                               |                                         |                                   |     |                                       |   |                         |         |                                                       |     |       |   |           
|                                                     | Acceleration of Unvested Stock Options |                                   |     | 0                                     |   |                         | 471,500 | (2)                                                   |     | 0     |   |           
|                                                     | Acceleration of Unvested RS/RSUs       |                                   |     | 0                                     |   |                         | 0       |                                                       |     | 0     |   |           
|280G Tax Gross-up                                    |                                         |                                   | N/A |                                       |   | N/A                     |         |                                                       | N/A |       |   | N/A       
|                                                     |                                         |                                   |     |                                       |   |                         |         |                                                       |     |       |   |           
|Total                                                |                                         | $                                 | 0   |                                       | $ | 811,500                 |         | $                                                     | 0   |       | $ | 1,283,000 
|                                                     |                                         |                                   |     |                                       |   |                         |         |                                                       |     |       |   |           

---



13

---





Isaacs Employment Agreement.    If Mr. Isaacs' employment is terminated without "Cause" or if Mr. Isaacs terminates his
employment as a result of and within one year of a reduction in salary, he shall continue to receive his salary for one year immediately following such termination. Mr. Isaacs shall also be
entitled to one year of salary upon cessation of his employment if (i) Mr. Isaacs' salary is less than $490,000 at the second anniversary of the effective date of the Isaacs Agreement,
(ii) Mr. Isaacs terminates his employment within 30 days of such second anniversary and (iii) the Company elects to make such payments as consideration for
Mr. Isaacs agreement not to compete for a period of one year from the date of termination. Any such payments subsequent to termination shall be subject to offset in respect of any income
Mr. Isaacs earns from any other employment during such one year period.

14

---



Post-employment PaymentsMichael G. Isaacs

|Executive Payments and
Benefits upon Termination/CIC |                                         | Involuntary Termination for Cause |     | Involuntary Termination Without Cause |   | CIC without Termination |     | CIC with
Termination for
Good Reason or
Without Cause |           | Death     |     | Disability
|---------------------------------------------------- | --------------------------------------- | --------------------------------- | --- | ------------------------------------- | - | ----------------------- | --- | ----------------------------------------------------- | --------- | --------- | --- | ----------
|Severance                                            |                                         | $                                 | 0   |                                       | $ | 340,000                 |     | $                                                     | 0         |           | $   | 340,000   
|Annual Allowance                                     |                                         |                                   | 0   |                                       |   | 150,000                 | (1) |                                                       | 0         |           |     | 150,000   
|Long-term Incentive(2)                               |                                         |                                   |     |                                       |   |                         |     |                                                       |           |           |     |           
|                                                     | Acceleration of Unvested Stock Options |                                   |     | 0                                     |   |                         | 0   |                                                       |           | 1,603,500 | (3) |           
|                                                     | Acceleration of Unvested RS            |                                   |     | 0                                     |   |                         | 0   |                                                       |           | 1,321,000 |     |           
|280G Tax Gross-up                                    |                                         |                                   | N/A |                                       |   | N/A                     |     |                                                       | N/A       |           |     | N/A       
|                                                     |                                         |                                   |     |                                       |   |                         |     |                                                       |           |           |     |           
|Total                                                |                                         | $                                 | 0   |                                       | $ | 490,000                 |     | $                                                     | 2,924,500 |           | $   | 3,414,500 
|                                                     |                                         |                                   |     |                                       |   |                         |     |                                                       |           |           |     |           

---

For
purposes of the Isaacs Agreement, "Cause" means any of the following: (i) an act or omission which is dishonest or fraudulent involving work related conduct or the commission by
Mr. Isaacs of any act or the suffering by him of any occurrence or state of facts, which renders him incapable of performing his duties under the Isaacs Agreement, or which adversely affects or
could reasonably be expected to adversely affect the Company's business reputation; (ii) a formal charge or conviction of a felony, a gross misdemeanor involving moral turpitude or criminal
conduct against any person or property, including without limitation, the Company; (iii) Mr. Isaacs failure to diligently or effectively perform and comply with his duties under any
provision of the Isaacs Agreement or any duty as directed from time to time by the Company, including the Company's then current policies, procedures and rules; (iv) any breach by
Mr. Isaacs of any of the terms of, or the failure to perform any covenant contained in, the Isaacs Agreement; (v) Mr. Isaacs disclosure, improper use or of or failure to protect
the Company's confidential, proprietary or trade secret information; (vi) Mr. Isaacs death or upon some other condition which renders him unable to perform the essential functions of his
job, with or without accommodation; (vii) failure to comply with any provision of the gaming laws of the State of Nevada or the rules and regulations of the Nevada Gaming Control Board or the
Nevada Gaming Commission or any gaming law, ordinance, rule or regulation of any city or county having jurisdiction, or the gaming laws, regulations and rules of any other nation, state, county or
other jurisdiction in which the Company may be doing business at any time which will materially and negatively affect the registration and licensing of the Company, including failure to maintain or
have suspended, revoked or denied any applicable license, permit or card required by the state or a political subdivision thereof; or (viii) Mr. Isaacs' commission of any action or the
existence of any state of facts which would constitute "cause" under Nevada law.

Luciano Employment Agreement.    If Mr. Luciano is terminated without "Cause" he will receive severance benefits in an amount
determined by annualizing the amount Mr. Luciano would have received in respect of the number of full months served in the fiscal year in which he is terminated. The Luciano Amendment also
provides that if Mr. Luciano is terminated without cause, any stock

15

---



options
that had vested at the time of termination shall remain outstanding and exercisable until the first anniversary of the date of termination, but in no event beyond the original term of such
options.

Post-employment PaymentsRobert Luciano

|Executive Payments and
Benefits upon Termination/CIC |                                         | Involuntary Termination for Cause |     | Involuntary Termination Without Cause |   | CIC without Termination |     | CIC with
Termination for
Good Reason or
Without Cause |            | Death      |     | Disability
|---------------------------------------------------- | --------------------------------------- | --------------------------------- | --- | ------------------------------------- | - | ----------------------- | --- | ----------------------------------------------------- | ---------- | ---------- | --- | ----------
|Severance                                            |                                         | $                                 | 0   |                                       | $ | 250,000                 |     | $                                                     | 0          |            | $   | 250,000   
|Management Incentive Payout                          |                                         |                                   | 0   |                                       |   | 171,000                 | (1) |                                                       | 0          |            |     | 150,000   
|Long-term Incentive(2)                               |                                         |                                   |     |                                       |   |                         |     |                                                       |            |            |     |           
|                                                     | Acceleration of Unvested Stock Options |                                   |     | 0                                     |   |                         | 0   |                                                       |            | 11,325,600 | (3) |           
|                                                     | Acceleration of Unvested RS            |                                   |     | N/A                                   |   |                         | N/A |                                                       |            | N/A        |     |           
|280G Tax Gross-up                                    |                                         |                                   | N/A |                                       |   | N/A                     |     |                                                       | N/A        |            |     | N/A       
|                                                     |                                         |                                   |     |                                       |   |                         |     |                                                       |            |            |     |           
|Total                                                |                                         | $                                 | 0   |                                       | $ | 421,000                 |     | $                                                     | 11,325,600 |            | $   | 11,725,600
|                                                     |                                         |                                   |     |                                       |   |                         |     |                                                       |            |            |     |           

---

For purposes of the Luciano Agreement, "Cause" means any of the following events, as determined by the Company, upon reasonable investigation, in its judgment
and discretion, (i) a material act or omission which is dishonest or fraudulent against the Company; (ii) a conviction of a felony or conviction of a gross misdemeanor involving moral
turpitude or criminal conduct against any person or property, including without limitation, the Company; (iii) a substantial act or omission that constitutes willful misconduct in the
performance of Mr. Luciano's job responsibilities or material failure to adhere to Company policies; (iv) a substantial act, omission or pattern of conduct in the performance of
Mr. Luciano's job responsibilities, which constitutes failure to meet satisfactory, work standards, of which Mr. Luciano shall have thirty days written notice from the Company to effect
a cure thereof; (v) any material breach of the Luciano Agreement, of which Mr. Luciano shall have thirty days after written notice describing the particulars of the default to effect a
cure thereof; and (vi) failure to comply with any provision of the gaming laws of the State of Nevada or the rules and regulations of
the Nevada Gaming Control Board or the Nevada Gaming Commission or any gaming law, ordinance, rule or regulation of any city or county having jurisdiction, or the gaming laws, regulations and rules of
any other nation, state, county or other jurisdiction in which the Company may be doing business at any time which will materially and negatively affect the registration and licensing of the Company,
of which Mr. Luciano shall have thirty days' written notice from the Company to effect a cure thereof.

Srinivasan Employment Agreement.    If Mr. Srinivasan's employment is terminated without "Cause" or if he resigns following a "Change
in Control" or "Material Diminution of Duties," Mr. Srinivasan will receive an amount equal to his base salary for the twelve months after the date of termination, offset by any compensation he
receives that is attributable to other employment during the six-month period that begins six months after the date of termination. In addition, upon the occurrence of a Change in Control,
Mr. Srinivasan shall be entitled to receive any additional acceleration in benefits, financial packages, stock options and restricted stock, and compensation accorded to the Company's other
senior

16

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executives,
except for those that may be accorded to the Company's Chief Executive Officer and Chief Financial Officer.

Post-employment PaymentsRamesh Srinivasan

|Executive Payments and
Benefits upon Termination/CIC |                                         | Involuntary Termination for Cause |     | Involuntary Termination Without Cause |   | CIC without Termination |   | CIC with
Termination for
Good Reason or
Without Cause |           | Death     |     | Disability
|---------------------------------------------------- | --------------------------------------- | --------------------------------- | --- | ------------------------------------- | - | ----------------------- | - | ----------------------------------------------------- | --------- | --------- | --- | ----------
|Severance                                            |                                         | $                                 | 0   |                                       | $ | 275,000                 |   | $                                                     | 0         |           | $   | 275,000   
|Long-term Incentive(1)                               |                                         |                                   |     |                                       |   |                         |   |                                                       |           |           |     |           
|                                                     | Acceleration of Unvested Stock Options |                                   |     | 0                                     |   |                         | 0 |                                                       |           | 1,587,600 | (2) |           
|                                                     | Acceleration of Unvested RS/RSUs       |                                   |     | 0                                     |   |                         | 0 |                                                       |           | 348,004   | (2) |           
|280G Tax Gross-up                                    |                                         |                                   | N/A |                                       |   | N/A                     |   |                                                       | N/A       |           |     | N/A       
|                                                     |                                         |                                   |     |                                       |   |                         |   |                                                       |           |           |     |           
|Total                                                |                                         | $                                 | 0   |                                       | $ | 275,000                 |   | $                                                     | 1,935,604 |           | $   | 2,210,604 
|                                                     |                                         |                                   |     |                                       |   |                         |   |                                                       |           |           |     |           

---



17

---





Directors' Compensation

The
Company's directors who are also employees generally are not separately compensated for their services as directors. Mr. Haddrill, the only director who is also an employee, did not receive
separate compensation for his services as a director during fiscal year 2007.

As
of the beginning of fiscal year 2007, generally, subject to certain exceptions discussed below under "Other Arrangements," each non-management director received $50,000 per
year plus $5,000 per year for each committee on which such non-management director served, except that the chairman of each committee received $10,000 for committee service. Each new
non-employee director received a grant of 50,000 stock options upon appointment to the Board of Directors. Each non-employee director also received an annual grant of 30,000
stock options, prorated for a non-employee director whose service is less than one year. All options granted to directors vest upon grant and remain exercisable for the full term of the
director's appointment or election, whether or not the director continues to serve as a director, unless the director resigns or is removed before the expiration of his or her term, in which event the
options expire sixty days after resignation or removal.

On
February 22, 2007, the Board of Directors revised the non-employee director compensation package to increase the Chairman of the Audit Committee's annual fee to $25,000.

On
May 3, 2007, the Board of Directors revised the non-employee director compensation package to provide that future annual equity grants will be comprised of $125,000 of restricted
stock which vests over one year. In addition, each non-employee director will receive annually $125,000 worth of stock options vested upon grant. The number of stock options is to be
determined by dividing $125,000 by the then current Black-Scholes value of the Company. Newly elected directors will continue to receive 50,000 stock options upon appointment to the Board of
Directors, which vest in equal installments over a three-year period, and they will receive a pro-rated annual equity grant.

On
December 19, 2007, the Board of Directors modified the fee for membership in the Office of the Chairman to $25,000 per year. Additionally, the Chairman of the Board of Directors'
compensation was
modified to provide for the same fees and equity awards as other non-employee directors as well as an additional annual fee of $85,000. To encourage stock ownership, the Board of Directors
also approved a plan in December 2007 pursuant to which non-employee directors may elect to receive restricted stock, which vests over one year, in lieu of fees. For calendar year
2009 and beyond, directors will be eligible to elect to receive stock in lieu of fees in the year prior to receipt of the award, on a dollar for dollar basis, using the closing stock price on the
first trading day in January. For calendar year 2008, the stock price used will be the closing stock price during the ten-day trading period prior to the election.

Directors
are also reimbursed for their reasonable out-of-pocket expenses incurred on Company business. The Company may grant both employee and non-employee
directors additional cash compensation and options as time commitments, responsibilities and other circumstances may warrant.

Other Arrangements.    Effective July 1, 2004, the Company entered into an agreement with Mr. Robbins pursuant to which he
agreed to serve as the Chairman of the Board of Directors and as a member of the Office of the Chairman. This agreement terminated on December 31, 2007 pursuant to its terms. Pursuant to this
agreement Mr. Robbins received, in lieu of any other fees, total fees of $325,000 per year for such services.

Also
effective July 1, 2004, the Company entered into an agreement with Mr. Kirschbaum pursuant to which he agreed to serve as a member of the Office of the Chairman for a period of
three and one-half years. Pursuant to this agreement Mr. Kirschbaum received fees of $100,000 per year for such services. The Company made its last payment under this agreement in
August 2006 following Mr. Kirschbaum's death.

18

---



In
November 2006, the Company entered into an agreement with Mr. Verner pursuant to which he agreed to serve as a member of the Office of the Chairman until December 31, 2007.
Pursuant to this appointment, Mr. Verner received fees of $75,000 for such services, payable in restricted stock, with the number of shares to be determined based on the average closing price
for the twenty trading days preceding the agreement.

Fiscal Year 2007 Director Compensation

The
following table sets forth the compensation earned by the Company's directors in respect of their services as such during fiscal year 2007.

|Name               |  | Fees Earned or
Paid in Cash
($) |  | Stock
Awards(1)(2)(3)
($) |  | Option
Awards(1)(2)(4)
($) |  | Non-Equity
Incentive Plan
Compensation
($) |  | All Other
Compensation
($) |  | Total
($)
|------------------ |  | ------------------------------- |  | ------------------------- |  | -------------------------- |  | ------------------------------------------ |  | -------------------------- |  | ---------
|Jacques André      |  | 69,167                          |  | 20,096                    |  | 125,339                    |  |                                           |  |                           |  | 214,602  
|Robert L. Guido    |  | 48,125                          |  | 20,096                    |  | 512,494                    |  |                                           |  |                           |  | 580,715  
|Joel Kirschbaum(5) |  | 100,000                         |  |                          |  |                           |  |                                           |  |                           |  | 100,000  
|Stephen Race(6)    |  | 45,833                          |  |                          |  |                           |  |                                           |  |                           |  | 45,833   
|David Robbins      |  | 325,000                         |  | 20,096                    |  | 125,339                    |  |                                           |  |                           |  | 470,435  
|Kevin Verner       |  | 69,167                          |  | 59,966                    |  | 125,339                    |  |                                           |  |                           |  | 254,472  

---

19

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COMPENSATION DISCUSSION AND ANALYSIS

The Company's Compensation Philosophy & Objectives

The
Company's compensation program for executive officers, which has been endorsed by the Compensation Committee of the Board of Directors (the "Compensation Committee"), is designed to enhance
stockholder value by tying a large portion of senior executive compensation to the Company's overall performance, as reflected in the value of the Company's common stock. In furtherance of this
objective, the Company provides competitive opportunities with respect to salary, annual incentive/bonus, and grants of long-term incentives upon hire and periodically during the term of
employment in comparison to both peer organizations within the gaming and technology industries and similarly sized companies. The Company believes this compensation structure enables the Company to
attract and retain key executives critical to the Company's long-term vision and success, and to motivate its executives to enhance long-term stockholder value by focusing on
growth, productivity, profitability and operating margins.

Role of the Compensation Committee

General.    The Compensation Committee, which is comprised of three independent members of the Company's Board of Directors, as discussed in
greater detail under "Board of DirectorsDirector Independence" is responsible for, among other things,



The
Compensation Committee, in consultation with Pearl Meyer & Partners, the independent executive compensation consultant it has retained, also analyzes the reasonableness of the Company's
overall executive compensation package. The Compensation Committee's functions are more fully set forth in its charter which has been approved by the Board of Directors, as discussed under "Board of
DirectorsCommittees of the BoardCompensation Committee."

While
the Chief Executive Officer and other senior executive officers may attend meetings of the Compensation Committee, the ultimate decisions regarding executive officer compensation are made solely
by the Compensation Committee. These decisions are based not only on the Compensation Committee's deliberations, but also from input requested from outside advisors, including its independent
compensation consultant, with respect to, among other things, market data analyses. The final decisions relating to the Chief Executive Officer's compensation are made in executive session of the
Compensation Committee without the presence of management. Decisions regarding the other executive officers are typically made by the Compensation Committee after considering recommendations from the
Chief Executive Officer.

Compensation Consultants.    The Compensation Committee historically engages the services of an independent compensation consulting firm to
advise it in connection with making executive compensation determinations. The Compensation Committee retained the services of Pearl Meyer & Partners with respect to fiscal years 2007 and 2008.
The Chairman of the Compensation Committee defines the scope of any consultant's engagement. The responsibilities may include, among other things, advising on issues of executive or Board of Directors
compensation, equity compensation structure or preparing compensation disclosure for inclusion in the Company's SEC filings.

20

---



The
Compensation Committee retained Pearl Meyer & Partners directly. However, in fulfilling its responsibilities, Pearl Meyer & Partners may interact with management or the Company's
other outside advisors to the extent necessary or appropriate. The Company's management has not retained Pearl Meyer & Partners to perform any consulting or advisory services in fiscal year
2007 nor fiscal year-to-date 2008.

Compensation Structure

Although
the final structure may vary from year to year and officer to officer, the Compensation Committee utilizes three main components for executive officer compensation:



For
fiscal year 2007, the final level and mix of compensation was based on the Compensation Committee's understanding of the objective data relating to the Company's competitive environment and the
Company's performance, as well as the subjective factors outlined below.

Pay Mix.    The Compensation Committee believes that the particular elements of compensation identified above produce a
well-balanced mix of security-oriented compensation, retention value, and at-risk compensation that provide the executive officers with both short-term and
long-term performance incentives. Base pay provides the executive officer with a measure of security as to the minimum level of compensation he or she will
receive while the annual and long-term incentive components motivate the executive officer to focus on the business metrics that will produce a high level of Company performance over the
long-term. The Compensation Committee believes that this approach not only leads to increases in stockholder value and long-term wealth creation for the executive, but also
reduces the risk of loss of top executives to competitors.

The
Compensation Committee believes the components of executive compensation should be weighted towards at-risk pay. This allocation is consistent with the Compensation Committee's overall
philosophy with respect to the Named Executive Officers, as defined under "Executive CompensationFiscal Year 2007 Summary Compensation Table," of
pay-for-performance. When past equity compensation awards are combined with the contractual salary and targeted bonuses for the term of each Named Executive Officers'
employment agreement (or the vesting schedule of the Named Executive Officer's equity award upon hire), the aggregate base salary payable to each Named Executive Officer over such period comprises
between 14% and 41% of the aggregate value of each officer's targeted compensation for the period. The individual components of each of the Named Executive Officer's compensation package are described
in more detail below under "Individual Named Executive Officer Compensation."

Compensation Levels and Benchmarking.    Overall compensation levels for executives are determined based on one or more of the following
factors: the individual's duties and responsibilities within the Company, the individual's experience and expertise, the compensation levels for the individual's peers within the Company, compensation
levels for similar positions in the industry or in the technology industry more generally, performance of the individual and the Company as a whole, and the levels of compensation necessary to recruit
new executives. The Company does not attempt to target a particular pay positioning for executive officers individually or as a group. Rather, the Company assesses each executive on the previously
identified factors to determine appropriate levels of compensation. The

21

---



Company
and the Compensation Committee believe that the resulting compensation package is competitive.

The
gaming and gaming monitoring systems industries are highly competitive, and have a limited pool of executive officer candidates with the desired level of industry experience. The Compensation
Committee considers information from a variety of sources when assessing the competitiveness of the Company's current and future compensation levels. These sources include, but are not limited to,
management, other members of the Board of Directors, publicly available compensation data regarding executive officers both within and outside the industry, the Company's understanding of compensation
arrangements of other local companies, and opinions from the Compensation Committee's consultants. The Compensation Committee believes that these sources provide it with an understanding of the
competitive marketplace for executive talent among the Company's principal competitors, including: International Game Technology, Aristocrat Leisure, GTECH Holdings, Konami, Progressive Gaming
International, Shuffle Master, and WMS Industries. In making compensation decisions for the Named Executive Officers for fiscal year 2007, the Compensation Committee reviewed the terms and conditions
of each Named Executive Officer's employment agreement, each of which provides for a set
level of base salary and annual incentive opportunity, as well as long-term incentives and benefits. To the extent not governed by contractual commitments, compensation decisions for the
Named Executive Officers were made based on the Compensation Committee's understanding of the market pay for similar positions, internal equity, changes in the price of a share of the Company's common
stock to the extent it influenced outstanding equity grants, and the amount of unvested outstanding equity grants.

Individual Named Executive Officer Compensation

Base Salary.    The Compensation Committee annually reviews each executive's base salary, and determines whether such individual deserves any
increases or decreases thereto. These reviews include considerations of, among other things, factors such as the Company's overall performance, new duties and/or responsibilities assumed by the
executive, the overall performance of the executive's area of responsibility, the executive's impact on strategic goals, and the executive's length of service with the Company. However, there is no
specific weighting applied to any one factor in setting the level of base salary, and the process ultimately relies on the subjective exercise of the Compensation Committee's judgment.

Each
of the Named Executive Officers was hired pursuant to an employment agreement which established each Named Executive Officer's initial salary. Each employment agreement was the result of
negotiation between the Company and the Named Executive Officer. Although the Compensation Committee has the ability to modify each executive's salary, none of the Named Executive Officers' salaries
have been modified except through amendments to their respective employment agreements. The following is a brief description of each Named Executive Officer's contractual provisions with respect to
base salary.



22

---





Annual Cash Incentive Programs.    The Company believes that an incentive program tied to annual performance is an effective means of
motivating and rewarding executives to enhance long-term stockholder value. This structure is accomplished by providing annual cash incentives under the Company's Management Incentive Plan
("MIP"). Each of the Named Executive Officers participates, or is eligible to participate in, the MIP except for Mr. Haddrill. The Company and Mr. Haddrill determined upon
Mr. Haddrill's hiring, to more effectively link his compensation to the success of the implementation of intermediate and long-term strategies as well as stockholder returns, that
the most desirable compensation program for him would include substantial equity incentive grants up front with multi-year service requirements, and in some cases, performance
contingencies. For the remaining executives, annual performance bonuses are tied to the Company's overall performance, as well as both the performance of each individual executive and the performance
of his or her area of responsibility.

Under
the MIP, the Compensation Committee establishes a target incentive opportunity, the range of possible incentive awards, the performance measures used, and the level of performance which will
correspond to a particular incentive payment, all of which the Compensation Committee uses to determine an executive's annual cash incentive awards. Target incentive opportunities under the MIP for
each of the Named Executive Officers, other than Mr. Haddrill, are 60% of base salary. This award level can vary between a maximum payout of 102% of salary, a threshold payout of 24% of salary,
and $0. For fiscal year 2007, the performance goals which affected potential payouts for the Named Executive Officers were as follows: (i) 70% of each executive's award was tied to the
Company's performance, which performance, if achieved at the maximum level, would result in a payout equal to 84% of such executive's base salary; and (ii) 30% of each executive's award was
tied to individual goals as determined by the Chief Executive Officer, which goals, if achieved at the maximum level, would result in a payout equal to 18% of such executive's base salary. Under the
MIP, the Company may elect to distribute any award in restricted stock. The Company may modify, amend or eliminate the MIP at any time.

The
Compensation Committee sets and approves certain financial or operational objectives for determining the portion of bonuses that are tied to Company performance. Threshold Company performance must
be met to receive a payout. For fiscal year 2007, adjusted earnings per share ("Adjusted EPS") was chosen as the Company performance measure. The Compensation Committee chose Adjusted EPS as the
Company performance measure because the Company and the Compensation Committee believe that Adjusted EPS is a good indicator of the Company's achievement with respect to its overall business
objectives and a significant driver of stock price performance.

23

---



Adjusted
EPS is defined as diluted earnings per share as determined in accordance with generally accepted accounting principles plus the after tax cost of stock-based compensation as determined in
accordance with Financial Accounting Standards Board Statement of Financial Accounting Standards No. 123(R),Share-Based Payment("SFAS 123R"). The Compensation Committee established threshold Company performance for fiscal year 2007 to be Adjusted EPS of $0.42 per share, a target of Adjusted EPS of $0.55 per share, and
a maximum performance goal of Adjusted EPS of $0.75 per share. For Company performance results that are between the threshold and target, or between the target and the maximum, the bonus amount is
determined by straight line interpolation. For fiscal year 2007, the Company earned Adjusted EPS of $0.59 per share, resulting in a payout of 120% with respect to the portion of the bonus tied to
Company performance.

The
individual performance component of the bonus is based on the Compensation Committee's subjective evaluation of the overall performance of each executive. The Compensation Committee reviews the
executive's individual contributions and efforts during the year as well as recommendations of the Chief Executive Officer. The recommendations of the Chief Executive Officer are based on individual
goals set by the Chief Executive Officer and the executive. The following briefly outlines the goals established for each of the Named Executive Officers for fiscal year 2007.



The
Compensation Committee approved, upon the recommendation of the Chief Executive Officer, payouts at 100% of target regarding the individual performance component of cash incentives for all Named
Executive Officers except one, reflecting the Chief Executive Officer's overall assessment that the individual goals for each of the Named Executive Officers but one were achieved or exceeded during
fiscal year 2007. The Chief Executive Officer determined that one Named Executive Officer's individual component should be paid at 70% of target, reflecting the substantial progress in achieving the
outlined goals while recognizing that some of the goals were not fully implemented in the timeframe anticipated at the beginning of the year. Because Mr. Isaacs' was hired after the beginning

24

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of
the fiscal year, Mr. Isaac's award was reduced on a pro-rata basis, to reflect his partial year employment.

In
addition to cash incentive payments under the MIP, pursuant to the Isaacs Agreement and Luciano Agreement the Company is obligated to make certain bonus payments to Mr. Isaacs and
Mr. Luciano. For fiscal year 2007, Mr. Isaacs was entitled to a $10,000 signing bonus, and Mr. Luciano was entitled to a $50,000 bonus. This $50,000 bonus is payable to
Mr. Luciano on each anniversary of the effective date of the Luciano Agreement to the extent he remains employed with the Company.

Target
and actual incentive amounts, as well as bonus payments, for each Named Executive Officer for fiscal year 2007 were as follows:

Officer

FY 2007
Target MIP

FY 2007
MIP

FY 2007
Guaranteed
Bonus(1)Richard Haddrill


n/a


n/a


n/aRobert Caller

$
204,000

$
214,200

$
0Michael Gavin Isaacs

$
170,000
(2)
$
193,723
(2)
$
10,000Robert Luciano

$
150,000

$
171,000

$
50,000Ramesh Srinivasan

$
165,000

$
188,100

$
0




Long-Term Incentives.    The Company's long-term incentive program is the component of executive compensation that is
most aligned with the long-term interests of stockholders. A significant portion of the Named Executive Officers' target compensation is in the form of long-term incentives.
Long-term incentive compensation also enables the Company to motivate leaders and key employees as well as encourage them to provide long-term service to the Company. The
Company provides long-term incentives to the Named Executive Officers in the form of stock options and restricted stock or restricted stock units ("RSUs"), which are generally granted
under the Amended and Restated Plan.

Stock Options.    Generally, each stock option granted under the Amended and Restated Plan entitles its holder to purchase one share of the
Company's common stock at its fair market value on the date of grant. Stock options granted as part of a long-term incentive award generally vest over three to five years. Prior to the
Board resolution on October 29, 2007, each granted stock option generally expires after ten years. On October 29, 2007, the Board considered the accounting expense of a ten year
exercisable option relative to the accounting expense of a seven year exercisable option. The Board concluded that the value of an option which expires after seven years, as perceived by a recipient,
would not be materially different than if the recipient had received an option which expires after ten years. Accordingly, the Board determined that the standard form of an option award will provide
for expiration after seven years. Unless provided otherwise by the Board of Directors or the Compensation Committee at the time of grant, or in certain other circumstances, the terms of stock options
are generally as follows:



25

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Restricted Stock or RSUs.    A grant of restricted stock is an award of common stock where the vesting thereof is subject to certain
restrictions established by the Board of Directors or the Compensation Committee. RSUs represent a conditional contractual right to receive one share of the Company's common stock at a specified
future date subject to certain restrictions such as a vesting period. For RSUs, the underlying stock is not issued until the time restrictions lapse, at which time the RSU is settled or, if previously
elected, deferred. In the event a cash dividend is declared and paid on the Company's common stock, holders of RSUs do not receive dividend equivalents. RSUs do not have voting rights because they are
not considered legally issued or outstanding shares of common stock. Unless provided otherwise by the Board of Directors or the Compensation Committee at the time of grant, or in certain other
circumstances, the terms of restricted stock or RSUs are generally as follows:



For
purposes of the Amended and Restated Plan:



Fiscal Year 2007.    Long-term incentive awards granted to the Named Executive Officers were generally issued in connection with
either the executive's initial employment or pursuant to amended employment agreements and are determined based on the Board of Directors' or Compensation Committee's assessment of the amount required
to induce employment or continued employment with the Company. Among the factors considered by the Board of Directors or the Compensation

26

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Committee
were the Named Executive Officer's compensation at prior employers, the level required to meet the desired mix of pay which emphasizes long-term incentives, and market levels of
pay. The following is a brief description of the grants of stock options and restricted stock made in fiscal year 2007 as well as the Compensation Committee's determination of award vesting.



Other Executive Benefits, including Perquisites and Retirement Benefits.    The Named Executive Officers are entitled to the same employee
benefits generally available to all full-time employees, subject to certain conditions such as fulfilling any minimum service period. These benefits include, among other things, vacation,
health and welfare benefits and participation in the Company's 401(k) Savings Plan.

Certain
other perquisites are also made available to executives, including the Named Executive Officers. These benefits include reimbursement for the cost, including any taxable amount, of
bi-annual physical exams. In addition, during fiscal year 2007, the Company paid for a country club initiation fee for Mr. Haddrill as required by the Haddrill Agreement as well as
limited business-related spousal travel for Messrs. Haddrill and Srinivasan.

In
designing these elements, the Company seeks to provide an overall level of benefits that are competitive with those offered by similarly situated companies in the markets in which the Company
operates based upon its general understanding of industry practice. The Company believes that these particular plans and programs provide a valuable recruiting and retention mechanism for its
executives and enable the Company to compete more successfully for qualified executive talent. In addition, the use of such perquisites in lieu of salary increases to compensate for the loss of those
benefits avoids the increased costs that would otherwise occur with respect to certain other benefits that are tied to the level of an executive's base salary (such as annual cash incentive
compensation). Further details regarding these types of benefits paid to the Named Executive Officers are set forth in the "All Other Compensation" column and the accompanying footnotes in the
"Executive CompensationFiscal Year 2007 Summary Compensation Table."

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Timing of Equity Grants

Executives
receive long-term equity awards pursuant to the terms of the Amended and Restated Plan, which was approved by the Company's stockholders. Awards are also granted outside of the
Amended and Restated Plan to the extent those grants are permitted by the rules of the NYSE. The Board of Directors, or as delegated to the Compensation Committee, administers the Amended and Restated
Plan and establishes the rules for all awards granted thereunder, including grant guidelines, vesting schedules and other provisions. The Board of Directors or the Compensation Committee reviews these
rules periodically and considers, among other things, the interests of the stockholders, market conditions, information provided by independent advisors, performance objectives and recommendations
made by the Chief Executive Officer.

The
Board of Directors or the Compensation Committee reviews awards for all employees. For annual awards, the Compensation Committee has established a process where the Compensation Committee reviews
the recommendations of the Chief Executive Officer for executives and other employees, modifies the proposed grants in certain circumstances, and approves the awards effective as of the date of its
approval. The annual grants are generally determined following the end of each fiscal year, and in conjunction with the recommendation for annual bonuses. Pursuant to the terms of the Amended and
Restated Plan, the Board of Directors has delegated certain limited authority to the Chairman of the Compensation Committee and the Chief Executive Officer to make equity grants in accordance with the
rules established by the Board of Directors for, in the case of the Chief Executive Officer, non-direct reports of the Chief Executive Officer, throughout the year. The Chairman of the
Compensation Committee has been delegated limited authority to make equity grants to all employees.

The
exercise price of stock option grants are set at 100% of the closing market price of a share of Company common stock on the date the Board of Directors or Compensation Committee approves the
grants, or upon the date such approval is made by the Chairman of the Compensation Committee or Chief Executive Officer under the limited delegated authority referenced above, to be reported to the
Board of Directors or Compensation Committee at its next regularly scheduled meeting. The exercise price of new hire awards and relocation or retention grants is determined as set forth above, except
that the exercise price is set on the date of hire or effective date of the underlying agreement providing for such grant rather than the date of the approval thereof.

Employment Agreements and Post-Termination Payments

As
previously discussed, the Company maintains employment agreements with each Named Executive Officer. The Compensation Committee determined that the compensation packages provided under these
agreements was fair and reasonable on the basis of its assessment of comparable compensation opportunities available to the individuals, including the compensation arrangements of each Named Executive
Officer at his prior place of employment.

Payments due Upon Termination and/or a Change in Control.    Prior to the effectiveness of the Plan Amendment on August 8, 2006, the
Amended and Restated Plan provided for the accelerated vesting of options, restricted stock and RSUs in the event of a change in control in which all of the outstanding stock held by the shareholders
of the Company is exchanged for any lawful consideration. The Amended and Restated Plan currently provides for the accelerated vesting of stock options in the event of a change in control and
subsequent termination of employment without Cause or for Good Reason within twelve months thereof. In addition, certain employment agreements, as discussed in the section "Executive
CompensationPotential Payments upon Termination or Change in Control at Fiscal Year-End 2007", as well as certain forms of equity agreements also set forth specific terms with
respect to the accelerated vesting of equity awards upon either a change in control or a change in control followed by a termination of employment.

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The
Compensation Committee believes that for senior executives, including the Named Executive Officers, accelerated vesting of stock options in the event of a change in control is generally
appropriate because in some change in control situations, equity of the target company is cancelled making immediate acceleration necessary in order to preserve the value of the award. In addition, as
previously discussed, the Company relies primarily on long-term incentive awards to provide the Named Executive Officers with the opportunity to accumulate substantial resources to fund
their retirement income, and the Compensation Committee believes that a change in control event is an appropriate liquidation point for awards designed for such purpose. Although the Company continues
to believe that single trigger change in control vesting is appropriate under the circumstances described above, the Company adopted the Plan Amendment to provide additional flexibility in
circumstances where the Company believes that it is more appropriate to require a termination of employment within one year following a change in control before vesting is accelerated. The Company
presumes that such a termination would likely be due to the change in control and not the employee's performance and therefore the award should be earned. For employees not terminated within twelve
months of a change in control, the employees would continue to vest in their awards as they contribute to the success of the surviving company. The Company anticipates that such double trigger vesting
acceleration will be used mainly for those employees who receive equity awards which are not a substantial component of their annual compensation or for whom it is considered unlikely in many
circumstances that a terminating event would occur for those employees upon a change in control.

In
addition, certain executives, including each of the Named Executive Officers, receive cash severance in certain circumstances that result in termination of employment. The Compensation Committee
believes these provisions are fair and reasonable based on its understanding of market practice among industry competitors noted above and within the broader environment of technology companies and
similarly sized businesses.

Calculations
of the payments due to the Named Executive Officers upon certain terminations of employment and/or in connection with a change in control are set forth under "Executive
CompensationPotential Payments upon Termination or Change in Control at Fiscal Year-End 2007."

Stock Ownership Guidelines and Hedging Policies

The
Company has neither adopted stock ownership guidelines for executive officers nor any policies prohibiting executives from holding Company securities in a margin account or pledging Company
securities as collateral for a loan. However, the Company discourages speculation in Company common stock and encourages employees to diversify their stock holdings. In addition, under
Section 304 of the Sarbanes-Oxley Act, if the Company is required to restate its financial statements due to material noncompliance with any financial reporting requirements as a result of
misconduct, the Chief Executive Officer and Chief Financial Officer may be required to reimburse the Company for (i) any bonus or other incentive-based or equity-based compensation received
during the 12 months following the first public issuance of the non-complying document, and (ii) any profits realized from the sale of securities of the Company during that
12-month period.

Impact of Tax and Accounting

As
a general matter, the Compensation Committee takes into account the various tax and accounting implications of the compensation vehicles employed by the Company.

When
determining amounts of long-term incentive grants to executives and employees, the Compensation Committee examines the accounting cost associated with the grants. Under
SFAS 123R, grants of stock options and RSUs result in an accounting charge for the Company equal to the grant date fair value of those securities. For RSUs, the accounting cost is generally
equal to the fair market value of the underlying shares of common stock on the date of the award. The cost is then amortized

29

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over
the requisite service period. With respect to stock options, the Company calculates the grant date fair value based on the Black-Scholes formula with an adjustment for possible forfeitures and
amortizes that value as compensation expense over the vesting period.

Section 162(m)
of the Code does not permit publicly-traded companies to take income tax deductions for compensation paid to the Chief Executive Officer and certain other executive officers to
the extent
that compensation exceeds $1 million per officer in any taxable year and does not otherwise qualify as performance-based compensation. The Amended and Restated Plan is structured so that the
compensation deemed paid to an executive officer in connection with the exercise of stock options granted under the Amended and Restated Plan should qualify as performance-based compensation not
subject to the $1 million limitation. In addition, awards of restricted stock or RSUs made under the Amended and Restated Plan may or may not qualify as performance-based compensation. A
portion of the restricted stock issued to Mr. Isaacs during fiscal year 2007 will not qualify as performance-based compensation. The restricted stock issued to Messrs. Caller and
Srinivasan in lieu of 2006 cash incentives will not qualify as performance-based compensation under Section 162(m) of the Code.

The
MIP cash incentive program for fiscal year 2007 is not designed to provide bonus payments that would qualify as performance-based compensation as defined in Section 162(m) of the Code, nor
would any guaranteed bonus payments qualify as performance-based compensation.

The
Compensation Committee will continue to consider steps that might be in the Company's best interests to comply with Section 162(m) of the Code. However, in establishing the cash and equity
incentive compensation programs for the Named Executive Officers, the Compensation Committee believes that the potential deductibility of the compensation payable under those programs should be only
one of a number of relevant factors taken into consideration, and not the sole or primary factor. The Compensation Committee believes that cash and equity incentive compensation must be maintained at
the requisite level to attract and retain the executive officers essential to the Company's financial success, even if all or part of that compensation may not be deductible by reason of the
limitations of Section 162(m) of the Code.

COMPENSATION COMMITTEE REPORT

The
Compensation Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis with management. Based on its review and discussion with management, the Compensation Committee
has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company's Annual Report on Form 10-K for the year ended June 30,
2007.

|Submitted by: | Kevin L. Verner, Chairman
Jacques André
David Robbins
|------------- | -----------------------------------------------------
|              | Members of the Compensation Committee                

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Compensation Committee Interlocks and Insider Participation

During
the fiscal year ended June 30, 2007, Messrs. André, Robbins, and Verner served on the Compensation Committee of the Board of Directors. During the fiscal year ended
June 30, 2007, there were no relationships or transactions between the Company and any member of the Compensation Committee requiring disclosure hereunder.

ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Security Ownership of Certain Beneficial Owners and Management

The
following table sets forth certain information as of December 31, 2007, with respect to the beneficial ownership of the Company's common stock, which constitutes the Company's only
outstanding class of voting securities, by (i) each person who, to the Company's knowledge based on a review of filings with the SEC, beneficially owned more than 5% of the outstanding shares
of common stock, (ii) each director and nominee for director, (iii) the Named Executive Officers, and (iv) all of the Company's executive officers and directors as a group. Except
as indicated, beneficial ownership includes the sole power to vote and to dispose of the securities in question. The mailing address for each of the beneficial owners listed below is c/o Bally
Technologies, Inc., 6601 South Bermuda Road, Las Vegas, Nevada 89119, unless noted otherwise.

Beneficial Owner

Amount of
Beneficial
Ownership

Percent of
ClassGreater than 5% Beneficial OwnersColumbia Wanger Asset Management LP(1)

3,905,000

6.66
%Alfred Wilms(2)

3,729,324

6.36
%DirectorsJacques André(3)

380,741

*Robert Guido(4)

60,277

*David Robbins(5)

643,603

1.10
%Kevin Verner(6)

330,950

*Named Executive OfficersRichard Haddrill(7)

1,841,858

3.14
%Robert Caller(8)

72,461

*Michael Gavin Isaacs(9)

97,500

*Robert Luciano(10)

1,779,260

3.04
%Ramesh Srinivasan(11)

224,172

*All executive officers and directors as a group(12)

5,619,233

9.59
%


---

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ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

Related Party Transactions

Mr. Kirschbaum
until his death in August 2006, was a director of the Company and the sole stockholder, director and officer of Kirkland Investment Corporation ("KIC"), which, effective
July 1, 2004, was party to an Advisory Services Agreement that called for the Company to pay KIC $600,000 annually for advisory and related services for a period of three and
one-half years. In August 2006, the Company made its last payment under the advisory agreement as a result of Mr. Kirschbaum's death.

The
Company also leases a warehouse and office facility from an entity owned by Mr. Luciano, the Company's Chief Technology Officer (and a Named Executive Officer). The lease was assumed in
connection with the Company's acquisition of SDG.. Rental payments for the fiscal years ended June 30, 2007 totaled $448,000. The Company is obligated to make an aggregate of $1,083,000 in
future payments under the current terms of the lease.

It
is the Company's general policy not to enter into related party transactions. To the extent a related party has an interest in a transaction, the Board of Directors reviews such transaction, the
related party's interest and determines whether such transaction is in the best interests of the Company and its stockholders.

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Director Independence

The
Board of Directors has adopted Independence Guidelines, which are available as part of the Company's Corporate Governance Guidelines on the Company's website, www.ballytech.com by following the
link to "Investor Relations" and "Governance." The Board of Directors has affirmatively determined that Messrs. André, Guido, Stephen M. Race, Robbins, and Verner are, or in
Mr. Race's circumstances was, independent under Section 303A.02 of the NYSE Listed Company Manual and the Company's Independence Guidelines. Mr. Race elected not to stand for
re-election at the 2006 Annual Meeting of Stockholders and ceased serving as a director effective May 3, 2007. The Board has also affirmatively determined that no relationships
exist between any independent director
and the Company that, in the opinion of the Board of Directors, would interfere with the exercise of such director's independent judgment in carrying out the responsibilities of a director. The NYSE's
independence definition also includes a series of objective tests, such as that the director is not an employee of the Company and has not engaged in various types of business dealings involving the
Company, that would prevent a director from being independent. None of the Company's independent directors has any relationship that violates these tests

ITEM 14.    PRINCIPAL ACCOUNTANT FEES AND SERVICES

Fees Paid to Independent Public Accountants

The
following table presents the aggregate fees billed by Deloitte & Touche LLP, the Company's principal Independent Registered Public Accounting Firm, for services provided during fiscal years
2007 and 2006:

2007

2006Audit fees

$
4,864,623

$
6,502,192Audit-related fees(1)


45,355


39,930Tax fees(2)


829,026


800,298All other fees





Total fees

$
5,739,004

$
7,342,424


---

The
Audit Committee reviews and approves all services to be provided by Deloitte & Touche LLP. The Audit Committee has considered the effect of non-audit services provided by
Deloitte & Touche LLP on Deloitte & Touche LLP's independence, and does not believe that such independence has been impaired or otherwise compromised.

Pre-Approval Policy

Pursuant
to the Audit Committee's pre-approval policies and procedures for certain audit and non-audit services, the Company's external auditor cannot be engaged to provide any
audit and non-audit services to the Company unless the engagement is pre-approved by the Audit Committee in compliance with the Sarbanes-Oxley Act of 2002. All fees set forth
in the table above were pre-approved by the Audit Committee pursuant to this pre-approval policy.

33

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Report of the Audit Committee

The
Audit Committee reviews the Company's financial reporting process on behalf of the Board of Directors. Management has the primary responsibility with respect to the financial statements and the
reporting process of the Company, and the Company's independent registered public accounting firm is responsible for expressing an opinion on the conformity of the Company's audited financial
statements to generally accepted accounting principles. The Audit Committee hereby reports as follows:



Based
on the review and discussions referred to above, the Audit Committee recommended to the Board of Directors, and the Board of Directors has approved, that the audited financial statements be
included in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2007, for filing with the SEC.

| |  | Respectfully submitted,                          
| |  | -------------------------------------------------
| |  | AUDIT COMMITTEE                                  
| |  | Robert Guido, Chairman
David Robbins
Kevin Verner

34

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PART IV

ITEM 15    EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Documents
filed as part of this amended report:

|Exhibit
Number |  | Description                                                                                 
|-------------- |  | --------------------------------------------------------------------------------------------
|31.1           |  | Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a).
|31.2           |  | Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a).
|32.1           |  | Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350.            
|32.2           |  | Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350.            

35

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SIGNATURES

Pursuant
to the requirements of Section 13 or 15(d) 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.

BALLY
TECHNOLOGIES, INC.                DATED: January 14, 2008

| |  | By |  | /s/RICHARD M. HADDRILLRichard M. Haddrill Chief Executive Officer
(Principal Executive Officer)                                                 
| |  | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------
| |  | By |  | /s/ROBERT C. CALLERRobert C. Caller Executive Vice President,
Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)

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