**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**


**FORM
        10-K/A**


**Amendment
      No. 1**





x **ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934**


**For
      the fiscal year ended December 31, 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: 000-51572








**PokerTek,
                Inc.**


*(Exact
      name of registrant as specified in its charter)*




**North
                Carolina**
            
            **61-1455265**(State
                or other jurisdiction of incorporation or organization)
            
            (I.R.S.
                Employer Identification No.)**1150
                Crews Road, Suite F, Matthews, North Carolina
                28105**(Address
                of principal executive offices) (Zip Code)


**(704)
                849-0860**(Registrant’s
                telephone number, including area
                code)





**Securities
      registered pursuant to Section 12(b) of the Act:**


Title
                of each class
            Name
                of each exchange on which registeredCommon
                Stock, no par value
            The
                NASDAQ Stock Market LLC





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





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





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





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.  Yes x No o





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, a non-accelerated filer, or a smaller reporting company.
      See
      the definitions of “large accelerated filer,” “accelerated filer” and “smaller
      reporting company” in Rule 12b-2 of the Exchange Act (check one):


o
              Large
                  accelerated filer
              o
              Accelerated
                  filero
              Non-accelerated
                  filer (do not check if a smaller reporting company)
              x
              Smaller
                  reporting company




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





The
      aggregate market value of the common equity held by non-affiliates of the
      registrant as of June 30, 2007 was $59,064,416 based upon the last reported
      sale
      price on the NASDAQ Global Market on June 29, 2007.





On
      March
      31, 2008, there were 10,934,464 outstanding shares of the registrant’s common
      stock.





**DOCUMENTS
      INCORPORATED BY REFERENCE**





None.









**TABLE
      OF CONTENTS**


**Page****PART
                III**Item
                10.
            
            Directors,
                Executive Officers and Corporate Governance
            
            1Item
                11.
            
            Executive
                Compensation
            
            3Item
                12.
            
            Security
                Ownership of Certain Beneficial Owners and Management and Related
                Stockholder Matters
            
            16Item
                13.
            
            Certain
                Relationships and Related Transactions, and Director
                Independence
            
            17Item 14.
            
            Principal
                Accounting Fees and Services
            
            18Signatures
            
            20Exhibit
                Index
            
            21







**EXPLANATORY
      NOTE**




This
      Form
      10-K/A (“Amendment No. 1”) amends the annual report on Form 10-K
      of PokerTek, Inc. (the “Company”) for the year ended December 31,
      2007, filed with the Securities and Exchange Commission (the “SEC”)
      on March 31, 2008 (the “2007 Form 10-K”).  The primary purpose
      of this Amendment No. 1 is to provide the information required by
      Items 10-14 of Part III of the 2007 Form 10-K, which originally had been
      intended to be incorporated by reference from the Company’s 2008 definitive
      proxy statement into the 2007 Form 10-K. On the cover page of this Amendment
      No.
      1, the Company has also deleted the disclosure noting that portions of the
      definitive proxy statement were to be incorporated by reference (the “Cover Page
      Change”).




This
      Amendment No. 1 has no effect on the Company’s consolidated statements of
      operations, statements of cash flows or balance sheets.




This
      Amendment No. 1 is limited in scope to Items 10-14 of Part III and the
      Cover Page Change, and does not amend, update or change any other items or
      disclosures contained in the 2007 Form 10-K or otherwise reflect events that
      occurred subsequent to the filing of the 2007 Form 10-K.  This Amendment
      No. 1 continues to speak as of the date of filing of the 2007 Form
      10-K except with respect to Items 10-14 of Part III and the Cover Page Change
      contained in Amendment No. 1, which speak as of the date of filing
      of Amendment No. 1 or as otherwise disclosed in this Amendment No.
      1.








**PART III**





**Item 10.**  **Directors,
      Executive Officers and Corporate Governance**





**BOARD
      OF DIRECTORS AND MANAGEMENT**




**Directors**




Under
      our
      amended and restated bylaws,
      the Board of Directors consists of five to nine members, as determined by the
      Board or the shareholders from time to time. The Board has determined that
      the
      number of directors within the range shall be five. Directors are elected
      annually to serve for one-year terms and until their successors are duly elected
      and qualified or until
      their prior death, resignation, removal or disqualification or until there
      is a
      decrease in the number of directors .
      The
      five nominees named below have been recommended by our Nominating and Governance
      Committee and approved by the Board to be presented as nominees to serve on
      the
      Board. All nominees presently serve as a director and each director is standing
      for re-election. There are no family relationships among any of our directors
      or
      officers.




The
      names
      of the nominees for election to the Board, their principal occupations and
      certain other information follow:




*Lyle
      Berman*  **          *Age
      66*




*Lyle
      Berman* has
      served as the Chairman of our Board of Directors since January 2005. Mr. Berman
      also currently serves as Chairman and Chief Executive Officer of Lakes
      Entertainment, Inc., a publicly-held company that develops and manages Native
      American-owned casinos, a position he has held since January 1999. He also
      currently serves as Executive Chairman of WPT Enterprises, Inc., a publicly-held
      media and entertainment company, a position he has held since April 2005. Prior
      to serving as WPT’s Executive Chairman, he served as WPT’s Chairman of the Board
      from WPT’s inception in March 2002 until April 2005 and also served as Chief
      Executive Officer of WPT from February 2004 until April 2005. Previously, Mr.
      Berman served as Chief Executive Officer of Rainforest Cafe, Inc. from February
      1993 until December 2000. Mr. Berman received a B.S. degree in Business
      Administration from the University of Minnesota.





*Gehrig
      H. “Lou” White*          *Age
      45*





*Gehrig
      “Lou” White* served
      as
      our Chief Executive Officer from our inception in August 2003 until September
      2007 when he became Vice-Chairman of the Board of Directors. In July 2002,
      Mr.
      White retired from Network Appliance, Inc., a provider of enterprise network
      storage and data management solutions, with the intention of identifying a
      business that he may acquire or establish. From July 2001 to July 2002, Mr.
      White served as an account executive for Network Appliance, Inc. Previously,
      from 1994 to 2001, Mr. White was a National Account Executive at Dell Inc.
      Mr.
      White received a B.S. degree in Computer Science from North Carolina State
      University and a Masters in Business Administration from Queens College.





*James
      T. Crawford, III*          *Age
      47*





*James
      Crawford* has
      served in an executive officer capacity and as a member of our Board of
      Directors since our inception in August 2003 and currently serves as our
      President and Secretary. Previously, from 1998 to 2004, Mr. Crawford owned
      and
      managed FastSigns franchises in Charlotte, North Carolina.





*Joseph
      J. Lahti*           *Age
      47*





*Joseph
      Lahti* has
      served as a member of our Board of Directors since February 2006. Mr. Lahti
      served as president,
      chief executive officer and chairman of the board of Shuffle Master, Inc.,
      a
      gaming supply company for the casino industry, from 1993 to 2002. He currently
      is active
      as
      both a shareholder and member of the boards and executive committees of several
      privately held companies in industries ranging from software, manufacturing,
      asset management (equities) and real estate development. He also served on
      the
      board of Zomax Incorporated, a publicly traded outsourcing service company,
      from
      May 2004 through May 2006.  Mr.
      Lahti
      received a B.S. degree from Harvard University, with an emphasis in economics.





*Arthur
      Lee Lomax*          *Age
      51*




*Lee
      Lomax* has
      served as a member of our Board of Directors since our inception in August
      2003.
      From our inception until July 2005, Mr. Lomax also served as our Treasurer.
      Previously, in 2002, he founded Carolina Classical School in Tryon, North
      Carolina where he served as Headmaster since its founding through August 2007.
      From 1994 to 2002, Mr. Lomax worked at Dell Computer Corporation and concluded
      his career there as Area Vice President of Sales within Dell’s Enterprise
      Customer Group. Mr. Lomax received a B.S. in Business Administration from
      University of North Carolina at Chapel Hill.




1


**Executive
      Officers**




Our
      current executive officers are as follows:


**Name**
              **Age**
              **Title**Christopher
                  J.C. Halligan
              41
              Chief
                  Executive Officer (principal executive officer, "PEO”)Mark
                  D. Roberson
              43
              Chief
                  Financial Officer (principal financial officer, “PFO”)James
                  T. Crawford, III
              47
              President
                  and SecretaryHal
                  J. Shinn, III
              43
              Chief
                  Technology Officer


Certain
      information with respect to our executive officers is provided below. Officers
      are appointed to serve at the discretion of the Board. Information regarding
      Mr.
      Crawford is included in the director profiles set forth above.




*Christopher
      J.C. Halligan* **** has
      served as our Chief Executive Officer since September 2007. Prior to his
      appointment as CEO, Mr. Halligan served as our Vice President - Sales and
      Planning from October 2006 to September 2007. In January 2006, he co-founded
      Kieden Corporation, an on-demand software business located in San Francisco,
      California, where he served as a director until Kieden was purchased by
      Salesforce.com, Inc. **** in
      August
      2006. Since April 2005, Mr. Halligan has been a significant shareholder and
      served as a member of the board of directors of Chantilly, Virginia-based Mascot
      Books, Inc., which publishes children’s books featuring popular sports teams and
      well-known entertainment personalities. From April 2001 to December 2004, Mr.
      Halligan was a self-employed consultant in the software and marketing industry.
      Prior to 2001, he served in several managerial positions with webMethods, Inc.,
      which is now part of Software AG, and Dell Computer Corporation. Mr. Halligan
      acquired a Bachelor of Arts degree in English Literature, with a Minor in
      Physics/Calculus, from the University of Arizona.





*Mark
      D. Roberson* has
      served as our Chief Financial Officer since October 2007. Prior to his
      appointment as CFO, from November 2006 to October 2007, Mr. Roberson served
      as
      Vice President and Controller of Baker & Taylor, Inc., a leading distributor
      of books and entertainment products with fiscal year 2007 revenues of
      approximately $1.7 billion. At Baker & Taylor, Mr. Roberson was responsible
      for all financial reporting and accounting functions. Prior to his employment
      at
      Baker & Taylor, Mr. Roberson was Director of Financial Reporting for
      Curtiss-Wright Controls from January 2005 to November 2006 and Director of
      Finance for the Manufacturing & Distribution operations of Krispy Kreme
      Doughnuts, Inc. from October 2002 to January 2005. From
      July
      1996 to October 2002, Mr. Roberson served in various financial management roles
      with LifeStyle Furnishings International, Ltd., concluding with the sale of
      the
      company. Mr. Roberson, a Certified Public Accountant, received his MBA from
      Wake
      Forest University in 2001 and undergraduate degrees in Economics and Accounting
      from Southern Methodist University and UNC-Greensboro.





*Hal
      J. Shinn, III* **** has
      served as our Chief Technology Officer since August 2004. Before joining us,
      from January 1999 through August 2004, Mr. Shinn served as Chief Information
      Officer of V3 Systems, Inc. Mr. Shinn is a graduate of the Georgia Institute
      of
      Technology, where he earned a B.S. degree in Aerospace Engineering and an M.S.
      degree in Technology and Science Policy.








**SECTION
      16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE**




Under
      federal securities laws, our directors, officers and beneficial owners of more
      than ten percent of PokerTek’s common stock are required to report their
      beneficial ownership of common stock and any changes in that ownership to the
      SEC. Specific dates for such reporting have been established, and we are
      required to report in this proxy statement any failure to file by the
      established dates during the last fiscal year. In the last fiscal year, to
      our
      knowledge based solely on a review of Forms 3, 4 and 5 and any amendments
      thereto, all of these filing requirements were satisfied by our directors,
      officers and principal shareholders with the exception of the following
      transactions:




2


·
            Christopher
                J.C. Halligan failed to file a timely Form 4 with respect to each
                of 4
                purchase transactions on November 26, 2007, pursuant to which he
                purchased
                an aggregate of 4,138 shares of our common stock. A Form 4 disclosing
                these transactions was filed with the SEC on December 5,
                2007.







**CODE
      OF BUSINESS CONDUCT AND ETHICS**




We
      maintain a Code of Business Conduct and Ethics to provide guidance on sustaining
      our commitment to high ethical standards. The code applies to employees,
      officers, directors, agents, representatives, consultants, advisors and
      independent contractors of PokerTek.





A
      copy of
      this code is available in the “Investor Relations” section of our website under
      the heading “Corporate Governance” at http://www.pokertek.com/corporategovernance.html or may
      be obtained by contacting our Investor Relations Department at the address
      set
      forth above or at investor_relations@pokertek.com .
      We will
      disclose any waivers of the code applicable to our directors or executive
      officers, and the reasons therefor, on a Form 8-K as required by NASDAQ listing
      standards or applicable law. Any waivers of the code for executive officers
      or
      directors may be made only by the Board or by a Board committee.








**AUDIT
      COMMITTEE**





The
      Audit
      Committee is a separately-designated standing Audit Committee established in
      accordance with section 3(a)(58)(A) of the Securities Exchange Act of 1934.
      The
      current members of the Audit Committee are Messrs. Berman, Lahti and Lomax.
      Mr.
      Lahti serves as chairman of the Audit Committee. None of Messrs. Berman, Lahti
      and Lomax is an employee of PokerTek and each has been determined to be
      independent under applicable listing standards of The NASDAQ Stock Market LLC
      and applicable SEC rules. In addition, the Board has examined the SEC’s
      definition of “audit committee financial expert” and determined that Mr. Lahti
      satisfies this definition .








**Item 11.**   **Executive
      Compensation**








**COMPENSATION
      DISCUSSION AND ANALYSIS**





**2007
      Executive Officer Compensation Program**





Our
      objectives with respect to compensation of our executive officers are to:
      (1) link executive compensation to our business strategy execution and
      performance; (2) offer compensation designed to attract, retain and reward
      key executive officers; and (3) offer salary, cash bonus and incentive
      compensation pay opportunities that are competitive in the marketplace,
      recognize achievement of our business strategy objectives, and align the
      long-term interests of executive officers with those of our shareholders. The
      primary objectives that we consider are market penetration of product, revenue
      growth, and analysis of our financial performance as compared to our internal
      budget and projected forecasts.




We
      currently have four named executive officers: Mr. Christopher J.C.
      Halligan, our Chief Executive Officer; Mr. James T. Crawford, III, our
      President; Mr. Mark D. Roberson, our Chief Financial Officer; and
      Mr. Hal J. Shinn, III, our Chief Technology Officer. During 2007, we also
      employed two additional named executive officers: Mr. Christopher Daniels,
      who
      served as our Chief Financial Officer until June 2007, and Mr. Gehrig H. “Lou”
White, who served as our Chief Executive Officer until he resigned to assume
      the
      vice chairman position in September 2007. Our executive compensation program
      is
      comprised of two components: annual cash compensation, paid in the form of
      annual salary and discretionary bonuses; and long-term compensation, paid
      historically in the form of options to purchase our common stock. Mr. Crawford
      was paid only an annual base salary during 2007. Mr. Halligan, Mr.
      Roberson, and Mr. Shinn received a base salary and Mr.
      Halligan and Mr. Roberson received long-term
      compensation in the form of options to purchase our common stock. The
      Compensation Committee retains the right to offer our named executive officers
      restricted shares of our common stock and other forms of equity compensation
      in
      lieu of, or in conjunction with, stock options.




3


Messrs.
      Halligan, Roberson and Shinn have employment agreements with certain severance
      provisions and accelerated vesting of options upon termination of employment,
      as
      discussed in more detail under “Executive Officer Compensation - Employment
      Agreements,” below.




Prior
      to
      our initial public offering, we granted a relatively large stock option package
      to Mr. Shinn. Mr. Crawford was a founder of the Company and holds a significant
      percentage of our common stock. As such, the Compensation Committee has not
      deemed it necessary to incentivize him with an employment agreement, a severance
      agreement or any retirement plans other than a 401(k) plan that is available
      to
      all employees. The Compensation Committee also considers whether prior awards
      and current stock ownership are sufficient in deciding the amount of
      equity-based compensation to award in a particular year. On that basis, Messrs.
      Crawford and Shinn were not awarded equity-based compensation during 2007.
      Currently, our executive compensation philosophy is focused on current cash
      payment in the form of annual base salary and performance-based discretionary
      bonuses based upon certain objective criteria, including market penetration
      of
      product, revenue growth, and analysis of our financial performance as compared
      to our internal budget and projected forecasts. In establishing the equity
      component of our executive compensation program, we considered the effects
      of
      Statement of Financial Accounting Standards No. 123R (“FAS 123R”), “Share-Based
      Compensation,” which requires us to currently expense an estimated fair value of
      equity compensation. The Compensation Committee believes that the combination
      of
      cash compensation and equity compensation is important to align the interests
      of
      our executive officers with those of our shareholders and provides an effective
      motivational tool at this stage of the Company’s growth.




The
      Compensation Committee typically reviews and adjusts base salaries and awards
      of
      cash bonuses and equity-based compensation at least once per fiscal year. During
      2007, our CEO presented the Compensation Committee and the Board of Directors
      with a forecast of our performance for the current year and made recommendations
      regarding annual base salaries and discretionary bonus payments for our
      executive officers. Mr. Crawford does not make any recommendation or participate
      in any decisions regarding his own compensation. The Compensation Committee
      considered the recommendations of the CEO in determining executive officer
      compensation for 2007. In order to qualify as an incentive stock option,
      equity-based compensation awards have historically been priced based upon the
      closing market price of our common stock on the last day of the fiscal quarter,
      which also is the date of grant.





**Annual
      Cash Compensation**





Annual
      cash compensation for our executive officers consists of a base salary and
      a
      discretionary bonus based upon certain objective criteria (including market
      penetration of product, revenue growth, and analysis of our financial
      performance as compared to our internal budget and projected forecasts). The
      2007 annual cash compensation was also targeted to be competitive in relation
      to
      other similar companies. However, because of our short operating history, the
      total compensation of our executive officers is currently below average when
      compared with other publicly traded companies. The Compensation Committee did
      not utilize the services of an independent compensation consulting firm to
      determine the cash compensation paid to executive officers in 2007. The
      Compensation Committee determined that the annual cash compensation that was
      paid to our executive officers was an adequate reward for the executive
      officer’s performance and discretionary bonuses were not awarded during
      2007.




*Annual
      Base Salary*





The
      annual base salaries of our executive officers and adjustments to executive
      officers’ base salaries are generally based upon a subjective evaluation of the
      individual executive officer’s performance by the Compensation Committee. The
      Compensation Committee’s evaluation is based upon non-quantitative factors such
      as the current responsibilities of each executive officer, the compensation
      of
      similarly situated executive officers at comparable companies, the performance
      of each executive officer during the prior calendar year, our performance during
      the prior calendar year, and the recommendations submitted to the Compensation
      Committee by our Chief Executive Officer. For 2007, Messrs. Crawford, Halligan
      and Roberson had base salaries of $160,000.    Mr. Shinn’s
      annual base salary was $145,000 from January 1, 2007 through June 30, 2007
      and such amount was increased to $152,250 from July 1, 2007 through December
      31,
      2007. These base salaries remain unchanged as of March 31, 2008.





**Long-Term
      Equity Compensation**





We
      believe that an appropriate level of equity-based compensation is part of a
      balanced and effective compensation program designed to align the interests
      of
      executive officers with those of our shareholders. We believe that the level
      of
      equity-based compensation awarded to our executive officers is adequate to
      align
      those officers’ interests with the interests of our shareholders. Our long-term
      compensation program has historically been based principally upon awards of
      options to purchase our common stock under the PokerTek, Inc. 2004 Stock Option
      Plan and the PokerTek, Inc. 2005 and 2007 Stock Incentive Plans. Awards of
      equity-based compensation are based upon a subjective evaluation of the
      executive officer’s performance by the Compensation Committee and
      recommendations submitted to the Compensation Committee by our Chief Executive
      Officer. The Compensation Committee’s evaluation considers a number of
      non-quantitative factors, including the responsibilities of the individual
      officers for, and contribution to, our operating results and their expected
      future contributions. The Compensation Committee also considers whether prior
      awards of equity-based compensation were sufficient in deciding the amount
      of
      equity-based compensation to award in a particular year. Messrs. Crawford and
      Shinn were not awarded equity-based compensation during 2007 because the
      Compensation Committee concluded that additional equity-based compensation
      would
      not further the goals of our executive compensation policies in light of Mr.
      Crawford’s large equity stake in PokerTek and Mr. Shinn’s previous stock option
      awards.


4





**Compliance
      With Internal Revenue Code Section 162(m)**





Section 162(m)
      of the Internal Revenue Code of 1986, as amended, limits the corporate tax
      deduction to $1 million for compensation paid to certain executives of
      public companies. However, performance-based compensation that has been approved
      by shareholders is excluded from the $1 million limit if, among other
      requirements, the compensation is payable only upon attainment of
      pre-established, objective performance goals and the board committee that
      establishes the goals consists only of “outside directors.” Additionally, stock
      options will qualify for the performance-based exception where, among other
      requirements, the exercise price of the stock option is not less than the fair
      market value of the stock on the date of grant, and the plan includes a
      per-executive limitation on the number of shares for which stock options may
      be
      granted during a specified period. All members of the Compensation Committee
      qualify as outside directors within the meaning and as defined by
      Section 162(m) and the regulations thereunder. Historically, the combined
      salary and bonus of each of our executive officers has been below this
      $1 million limit. The Compensation Committee’s present intention is to
      grant future compensation that does not exceed the limitations of Code
      Section 162(m).








**COMPENSATION
      COMMITTEE REPORT**





The
      Compensation Committee has reviewed and discussed the Compensation Discussion
      and Analysis that accompanies this report with our management. Based on its
      review and discussions, the Compensation Committee recommended to the Board
      of
      Directors that the Compensation Discussion and Analysis be included in our
      Annual Report on Form 10-K for the fiscal year ended December 31,
      2007.





Except
      for the Annual Report on Form 10-K described above, this Compensation Committee
      report is not incorporated by reference into any of our previous or future
      filings with the SEC, unless any such filing explicitly incorporates the
      report.





Lyle
      Berman (Chairman)


Joseph
      J.
      Lahti


Arthur
      Lee Lomax








**EXECUTIVE
      OFFICER COMPENSATION**





The
      following table sets forth the compensation paid by or on behalf of PokerTek
      to
      each person who served as Chief Executive Officer, each person who served as
      Chief Financial Officer and our other named executive officers for services
      rendered during the fiscal years ended December 31, 2007 and
      2006.





5


**SUMMARY
        COMPENSATION TABLE**
  **Name
                  and Principal Position**
              
              
              **Year**
              
              
              **Salary**
              
              
              **Bonus**
              
              
              **Option
                  Awards**
                (1)
              
              
              **All
                    OtherCompensation**(2)
              
              
              **Total**Christopher
                  J.C. Halligan(3)
              
              
              2007
              
              $
              160,000
              
              $
              -
              
              $
              182,461
              
              $
              -
              
              $
              342,461Chief
                  Executive Officer
              
              
              2006
              (7)Mark
                  D. Roberson(4)
              
              
              2007
              
              $
              32,804
              
              $
              -
              
              $
              -
              
              
              -
              
              $
              32,804Chief
                  Financial Officer
              
              
              2006
              (7)James
                  T. Crawford, III
              
              
              2007
              
              $
              160,000
              
              $
              -
              
              $
              -
              
              $
              4,133
              
              $
              164,133President
                  and Secretary
              
              
              2006
              
              
              151,250
              
              
              -
              
              
              -
              
              
              6,050
              
              
              157,300Hal
                  J. Shinn, III
              
              
              2007
              
              $
              148,021
              
              $
              -
              
              $
              19,403
              
              $
              5,921
              
              $
              173,345Chief
                  Technology Officer
              
              
              2006
              
              
              139,167
              
              
              -
              
              
              27,288
              
              
              5,567
              
              
              172,022Gehrig
                  H. White(5)
              
              
              2007
              
              $
              160,000
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              160,000Vice
                  Chairman of the Board and
              
              
              2006
              
              
              151,250
              
              
              -
              
              
              -
              
              
              -
              
              
              151,250former
                  Chief Executive OfficerChristopher
                  Daniels(6)
              
              
              2007
              
              $
              100,304
              
              $
              -
              
              $
              -
              
              $
              4,485
              
              $
              104,789Former
                  Chief Financial Officer
              
              
              2006
              
              
              126,250
              
              
              20,326
              
              
              27,288
              
              
              5,863
              
              
              179,727


(1)
              The
                  amounts in the Option Awards column reflect the dollar amount recognized
                  by the Company for financial reporting purposes for the years ended
                  December 31, 2007 and 2006 in accordance with FAS 123R and may
                  include
                  options granted in and prior to 2007 and 2006. A discussion of
                  the
                  assumptions used in calculating these values may be found in Note
                  9 to our
                  2007 audited financial statements on page F-14 to our Annual
                  Report.(2)
              The
                  amounts in the All Other Compensation column consist of Company
                  matching
                  contributions to our 401(k) plan.(3)
              Salary
                  for Mr. Halligan includes earnings during his employment with the
                  Company
                  during 2007, including periods prior to his appointment as Chief
                  Executive
                  Officer.(4)
              Salary
                  for Mr. Roberson represents earnings from his date of hire, October
                  18,
                  2007, through December 31, 2007.(5)
              Salary
                  for Mr. White includes earnings during 2006 and 2007, including
                  his
                  earnings subsequent to his resignation as Chief Executive Officer,
                  effective September 24, 2007. Mr. White continues as an employee
                  of the
                  Company and also serves as Vice Chairman of the Board, but does not receive
                  compensation for his position on the Board.(6)
              Mr.
                Daniels’
                employment
                as our Chief Financial Officer ceased as of September 14, 2007. The
                amount
                shown as Bonus was a discretionary cash bonus awarded during 2006.
                The
                amount shown in the All Other Compensation column includes health
                care
                benefits received by Mr. Daniels through September 30, 2007 as part
                of his
                severance.(7)
              Messrs.
                  Halligan and Roberson became named executive officers in
                  2007.





The
      following table sets forth information regarding all individual grants of
      plan-based awards granted to named executive officers for the fiscal year ending
      December 31, 2007.





6


**GRANTS
                  OF PLAN-BASED AWARDS****All
                  Other Option****Awards:
                  Number of**
              
              **Exercise
                  or Base**
              
              **Grant
                  Date Fair****Securities
                  Underlying**
              
              **Price
                  of Option**
              
              **Value
                  of Stock and****Name**
              
              **Grant
                  Date**
              
              **Options
                  (1)**
              
              **Awards
                  ($/Sh)**
              
              **Option
                  Awards ($) (2)**Christopher
                  J.C. Halligan
              
              
              September
                  28, 2007
              
              
              125,000
              
              $
              9.62
              
              $
              542,500Mark
                  D. Roberson
              
              
              December
                  31, 2007
              
              
              75,000
              
              $
              7.75
              
              $
              279,000
  (1)
              All
                  options were granted pursuant to the 2007 Stock Incentive Plan.
                  The
                  exercise price was the closing market price of our common stock
                  on the
                  NASDAQ Global Market on the grant date. The options vest in equal
                  installments every six months over a four-year period.(2)
              Grant
                  date fair value was calculated in accordance with FAS 123R. See
                  Note 9 to
                  the Financial Statements in our Annual Report on Form 10-K for
                  the year
                  ended December 31, 2007 regarding our valuation assumptions with
                  respect
                  to stock option awards.






**Employment
      Agreements**




We
      have
      not entered into an employment agreement with our President and Secretary,
      James
      T. Crawford, III. The salary of Mr. Crawford is determined by our Compensation
      Committee from time to time, as discussed in more detail under “Compensation
      Discussion and Analysis,” above. The Compensation Committee has currently set
      the annual salary of Mr. Crawford at $160,000.




*Employment
      Agreement with Christopher J.C. Halligan*





We
      have
      entered into an employment agreement, dated January 17, 2008, with Christopher
      J.C. Halligan, our Chief Executive Officer. The agreement has a term of two
      years.





Pursuant
      to this agreement, Mr. Halligan is entitled to receive a base salary of $160,000
      per year, subject to our right to reduce Mr. Halligan’s salary in connection
      with a reduction of all of our employees’ salaries. Mr. Halligan’s salary,
      however, may not be reduced by more than 20% in any single reduction or a series
      of reductions, may not be reduced for a period greater than six months, and
      any
      severance payments payable to Mr. Halligan will be based on his original base
      salary before any such reduction.




In
      connection with Mr. Halligan’s promotion to Chief Executive Officer, Mr.
      Halligan previously received a grant of 125,000 stock options at fair market
      value determined by the closing price of our common stock on September 28,
      2007,
      which vest 12.5% every six months (together with an earlier grant of 150,000
      options). If Mr. Halligan’s employment is terminated by us for any reason except
      cause (as defined in the employment agreement), all stock options granted to
      him
      through the date of termination will vest immediately if he executes a general
      release with language acceptable to us on or before the effective date of
      termination. Mr. Halligan is also entitled to receive standard benefits
      generally available to other senior officers.




In
      the
      event we terminate Mr. Halligan’s employment without cause (as defined in the
      employment agreement) or if Mr. Halligan terminates his employment for good
      reason (as defined in the employment agreement, which includes relocation to
      a
      Company office more than 75 miles from Charlotte, North Carolina without his
      consent), and upon execution of a general release, Mr. Halligan is entitled
      to
      severance in the form of continuation of his base salary for three months.
      In
      addition, if Mr. Halligan terminates his employment for good reason, he will
      be
      entitled to additional severance in the form of reimbursement of any COBRA
      payments during the three-month period. If Mr. Halligan is terminated for cause
      or if he voluntarily terminates his employment with us for any reason other
      than
      good reason (as defined in the employment agreement), he would not receive
      severance pay or any such other compensation.





In
      the
      event we terminate Mr. Halligan’s employment following a change of control, he
      is entitled to severance in the form of continuation of his base salary and
      benefits for three months.




7




We
      have
      also entered into a proprietary information and inventions agreement with Mr.
      Halligan that, among other things, (i) provides that Mr. Halligan will not
      disclose our proprietary information to any third party during his employment
      with us and thereafter, and (ii) requires that Mr. Halligan assign to us his
      right, title and interest to any and all inventions made or conceived during
      his
      employment with us. For a period of six months after termination of his
      employment, Mr. Halligan also would be required to inform us of all inventions
      made or conceived by him and, for a period of one year after termination of
      his
      employment, he would be required to inform us of all patent applications filed
      by him or on his behalf. In addition, for a period of one year after the
      termination of his employment with us he will not:




•
            provide
                services to any of our competitors within the continental United
                States
                similar to those provided to us during his employment with us;




•
            solicit
                or attempt to solicit any of our employees, independent contractors
                or
                consultants to terminate his or her relationship with us in order
                to
                become an employee, independent contractor or consultant of another
                entity; or




•
            solicit
                or attempt to solicit any of our customers with whom Mr. Halligan
                had
                contact as a result of his employment with us.





*Employment
      Agreement with Mark D. Roberson*





We
      have
      entered into an employment agreement, dated January 17, 2008 with Mark D.
      Roberson, our Chief Financial Officer. The agreement has a term of two years.




Pursuant
      to this agreement, Mr. Roberson is entitled to receive a base salary of $160,000
      per year, subject to our right to reduce Mr. Roberson’s salary in connection
      with a reduction of all of our employees’ salaries. Mr. Roberson’s salary,
      however, may not be reduced by more than 20% in any single reduction or a series
      of reductions, may not be reduced for a period greater than six months, and
      any
      severance payments payable to Mr. Roberson will be based on his original base
      salary before any such reduction.




In
      connection with Mr. Roberson’s appointment as Chief Financial Officer, Mr.
      Roberson previously received a grant of 75,000 stock options at fair market
      value determined by the closing price of our common stock on December 31, 2007,
      which vest 12.5% every six months. If Mr. Roberson’s employment is terminated by
      us for any reason except cause (as defined in the employment agreement), all
      stock options granted to him through the date of termination will vest
      immediately if he executes a general release with language acceptable to us
      on
      or before the effective date of termination. Mr. Roberson is also entitled
      to
      receive standard benefits generally available to other senior officers.




In
      the
      event we terminate Mr. Roberson’s employment without cause (as defined in the
      employment agreement) or if Mr. Roberson terminates his employment for good
      reason (as defined in the employment agreement, which includes relocation to
      a
      Company office more than 75 miles from Charlotte, North Carolina without his
      consent), and upon execution of a general release, Mr. Roberson is entitled
      to
      severance in the form of continuation of his base salary for six months. In
      addition, if Mr. Roberson terminates his employment for good reason, he will
      be
      entitled to additional severance in the form of reimbursement of any COBRA
      payments during the six-month period. If Mr. Roberson is terminated for cause
      or
      if he voluntarily terminates his employment with us for any reason other than
      good reason (as defined in the employment agreement), he would not receive
      severance pay or any such other compensation.





In
      the
      event we terminate Mr. Roberson’s employment following a change of control, he
      is entitled to severance in the form of continuation of his base salary and
      benefits for six months.




We
      have
      also entered into a proprietary information and inventions agreement with Mr.
      Roberson that, among other things, (i) provides that Mr. Roberson will not
      disclose our proprietary information to any third party during his employment
      with us and thereafter, and (ii) requires that Mr. Roberson assign to us his
      right, title and interest to any and all inventions made or conceived during
      his
      employment with us. For a period of six months after termination of his
      employment, Mr. Roberson also would be required to inform us of all inventions
      made or conceived by him and, for a period of one year after termination of
      his
      employment, he would be required to inform us of all patent applications filed
      by him or on his behalf. In addition, for a period of one year after the
      termination of his employment with us he will not:




•
            provide
                services to any of our competitors within the continental United
                States
                similar to those provided to us during his employment with us;




•
            solicit
                or attempt to solicit any of our employees, independent contractors
                or
                consultants to terminate his or her relationship with us in order
                to
                become an employee, independent contractor or consultant of another
                entity; or




8




•
            solicit
                or attempt to solicit any of our customers with whom Mr. Roberson
                had
                contact as a result of his employment with us.





*Employment
      Agreement with Hal J. Shinn, III*




We
      have
      entered into an employment agreement dated August 9, 2004, as amended effective
      July 1, 2005, with Hal J. Shinn, III, our Chief Technology Officer. The original
      agreement had a term of two years and on August 9, 2006 the agreement was
      extended for an additional two years through August 9, 2008.




Pursuant
      to this agreement, Mr. Shinn is entitled to receive a base salary of at least
      $126,000 per year, subject to our right to reduce Mr. Shinn’s salary in
      connection with a reduction of all of our employees’ salaries. Mr. Shinn’s
      salary, however, may not be reduced by more than 20% in any single reduction
      or
      a series of reductions, may not be reduced for a period greater than six months,
      and any severance payments payable to Mr. Shinn will be based on his original
      base salary before any such reduction. The Compensation Committee has authorized
      an increase in Mr. Shinn’s base salary each year since the employment agreement
      was executed, as discussed in more detail in the “Compensation Discussion and
      Analysis” section of this proxy statement.




Pursuant
      to the agreement, Mr. Shinn was granted an option to purchase 75,000 shares
      of
      our common stock, 7,500 shares of which vested on August 9, 2004 and 7,500
      shares of which vest every quarter thereafter, and an additional option to
      purchase 75,000 shares of our common stock, 9,375 shares of which vested on
      February 28, 2005, and 9,375 shares of which vest every six months thereafter.
      The exercise price of the shares underlying both option grants is $2.67 per
      share. Mr. Shinn is also entitled to receive standard benefits generally
      available to other senior officers.




In
      the
      event we terminate Mr. Shinn’s employment without cause (as defined in the
      employment agreement) or if Mr. Shinn terminates his employment for good reason
      (as defined in the employment agreement), and upon execution of a general
      release, Mr. Shinn is entitled to severance in the form of continuation of
      his
      base salary for two months. In addition, if Mr. Shinn terminates his employment
      for good reason, he will be entitled to additional severance in the form of
      reimbursement of any COBRA payments during the two-month period. Further, if
      Mr.
      Shinn’s employment is terminated by us for any reason except cause, all stock
      options granted will vest immediately if he executes a general release with
      language acceptable to us on or before the effective date of
      termination.





In
      the
      event we terminate Mr. Shinn’s employment following a change of control or we
      relocate Mr. Shinn to an office that is more than 75 miles from Charlotte,
      North
      Carolina without his consent, he is entitled to severance in the form of
      continuation of his base salary and benefits for two months.




We
      have
      also entered into a proprietary information and inventions agreement with Mr.
      Shinn that provides that Mr. Shinn will not disclose our proprietary information
      to any third party during his employment with us and thereafter, and for a
      period of one year after the termination of his employment with us he will
      not:




•
            provide
                services to any of our competitors within the continental United
                States
                similar to those provided to us during his employment with us;




•
            solicit
                or attempt to solicit any of our employees, independent contractors
                or
                consultants to terminate his or her relationship with us in order
                to
                become an employee, independent contractor or consultant of another
                entity; or




•
            solicit
                or attempt to solicit any of our customers with whom Mr. Shinn had
                contact
                during his employment with us.





**** *Agreements
      with Christopher Daniels*




We
      had
      entered into an employment agreement dated July 14, 2004, as amended July 1,
      2005, with Christopher Daniels, who served as our Chief Financial Officer until
      September 14, 2007. Mr. Daniels’ employment agreement has since been replaced
      with the Severance Agreement and Full and Final Mutual Release (the “Separation
      Agreement”), pursuant to which Mr. Daniels’ employment with us ceased effective
      September 14, 2007.





The
      Separation Agreement was executed in connection with an independent
      investigation by the Audit Committee of the Board of Directors into use of
      our
      corporate credit cards. The Separation Agreement provided that the Company
      and
      Mr. Daniels mutually agreed to terminate his employment relationship with us.
      Mr. Daniels agreed to remain available to fully assist with the transition
      to
      our successor chief financial officer.





9


Under
      the
      terms of the Separation Agreement, Mr. Daniels was entitled to (i) retain 14,000
      of
      his existing and vested options to purchase our common stock, each with a strike
      price of $2.67 per share, and (ii) continue to receive health benefits provided by
      us through September 30, 2007. Mr. Daniels was not to receive any additional or
      continuing compensation or other benefits from us in connection with his
      departure and, pursuant to the Separation Agreement, the balance of Mr. Daniels’
stock options and his Key Employee Agreement, as amended, were terminated as
      of
      September 14, 2007.





In
      accordance with the Separation Agreement, Mr. Daniels agreed to: (i) reimburse
      us for $6,000 of charges made by Mr. Daniels to our corporate credit cards
      on or
      before September 30, 2007, and (ii) facilitate the transfer of approximately
      244,000 frequent flyer miles to us, in each case without admission of liability
      by Mr. Daniels in connection therewith.  The
      Separation Agreement also included mutual releases and a non-competition and
      non-solicitation covenant by Mr. Daniels.





**Equity
      Plans**





The
      discussion which follows describes the material terms of our principal equity
      plans.





*PokerTek,
      Inc. 2004 Stock Incentive Plan*




On
      July
      15, 2004, we adopted the 2004 Plan, which was amended and restated on July
      29,
      2005. The 2004 Plan authorizes the issuance of up to 825,000 shares of common
      stock and is administered by the Compensation Committee of the Board of
      Directors. We have amended the 2004 Plan to provide that no further awards
      will
      be made thereunder. Both incentive and non-qualified stock options were granted
      under the 2004 Plan. Each award agreement under the 2004 Plan specifies the
      number and type of award, together with any other terms and conditions of such
      award.





Unless
      an
      award agreement or applicable law provides otherwise, if a change of control
      (as
      defined in the 2004 Plan) occurs, and if the agreements effectuating the change
      of control do not provide for the assumption or substitution of all options
      granted under the 2004 Plan, with respect to any non-assumed options the
      Compensation Committee may:




•
            accelerate
                the vesting and/or exercisability of such awards;




•
            unilaterally
                cancel any such award that has not vested and/or which has not become
                exercisable as of the effective date of such change of control;




•
            unilaterally
                cancel such award in exchange for:




•
            whole
                and/or fractional shares of our common stock (or for cash in lieu
                of any
                fractional share) that, in the aggregate, are equal in value to the
                excess
                of the fair market value of the shares of common stock that could
                be
                purchased subject to such award, determined as of the effective date
                of
                the change of control, over the aggregate exercise price for such
                award;
                or




•
            cash
                or other property equal in value to the excess of the fair market
                value of
                the shares of common stock that could be purchased subject to such
                award,
                determined as of the effective date of the change of control, over
                the
                aggregate exercise price for such shares; or




•
            unilaterally
                cancel such options after providing the holder of such options with:




•
            an
                opportunity to exercise such options to the extent vested within
                a
                specified period before the date of the change of control; and




•
            notice
                of such opportunity to exercise such options before the commencement
                of
                such specified period; or




•
            unilaterally
                cancel such award and notify the holder of such award of such action,
                but
                only if the fair market value of the shares of common stock that
                could be
                purchased subject to such award determined as of the effective date
                of the
                change of control does not exceed the aggregate exercise price for
                such
                shares.




The
      2004
      Plan will continue in effect until July 15, 2014, unless earlier terminated.
      The
      Compensation Committee generally may amend, alter or terminate the 2004 Plan
      at
      any time, provided that without shareholder approval, the 2004 Plan cannot
      be
      amended to increase the number of shares authorized, extend the term of the
      2004
      Plan, change the class of persons eligible to receive incentive stock options
      or
      effect any other change that would require shareholder approval under any
      applicable law or NASDAQ rule. Generally, any amendment, alteration or
      termination of the 2004 Plan or any award agreement may not adversely affect
      any
      outstanding award without the consent of the participant, except under certain
      circumstances as set forth in the 2004 Plan.





10


*PokerTek,
      Inc. 2005 Stock Incentive Plan*




On
      July
      29, 2005, we adopted the 2005 Plan. The 2005 Plan authorizes the issuance of
      up
      to 800,000 shares of our common stock, plus up to 825,000 shares under the
      2004
      Plan that cease for any reason to be subject to such awards, up to a maximum
      of
      1,625,000 shares of our common stock. Notwithstanding the maximum number of
      shares authorized for issuance under the 2005 Plan, the maximum number of shares
      of common stock that we may issue pursuant to incentive stock options is
      800,000.




The
      authority to administer the 2005 Plan has been delegated by the Board of
      Directors to the Compensation Committee. The Compensation Committee has the
      power to make awards, to determine when and to whom awards will be granted,
      the
      form of each award, the amount of each award, and any other terms or conditions
      of each award consistent with the terms of the 2005 Plan. Awards may be made
      to
      our employees, directors and independent contractors.





The
      types
      of awards that may be granted under the 2005 Plan include incentive and
      non-qualified stock options, restricted awards, stock appreciation rights,
      performance awards, phantom stock awards, dividend equivalent awards and other
      stock-based awards. Each award agreement will specify the number and type of
      award, together with any other terms and conditions as determined by the
      Compensation Committee in its sole discretion.




Upon
      a
      change in control, as defined in the 2005 Plan, and unless an award agreement,
      employment agreement or other agreement between a participant and us provides
      otherwise or Internal Revenue Code Section 409A or related regulations or
      guidance requires otherwise, the 2005 Plan provides that:




•
            all
                options and stock appreciation rights outstanding as of the date
                of the
                change in control will become fully exercisable, whether or not then
                otherwise exercisable; and




•
            any
                restrictions applicable to any restricted award, performance award
                or
                phantom stock award will be deemed to have been met, and such awards
                will
                become fully vested, earned and payable to the fullest extent of
                the
                original grant of the applicable award.




However,
      under certain conditions, the 2005 Plan authorizes the Compensation Committee,
      in the event of a merger, share exchange, reorganization, sale of all or
      substantially all of our assets or other similar transaction or event affecting
      us or one of our affiliates or shareholders, to determine that any or all awards
      will not vest or become exercisable on an accelerated basis, if we or the
      surviving or acquiring corporation takes action, including but not limited
      to
      the assumption of awards or the grant of substitute awards, that, in the opinion
      of the Compensation Committee, is equitable or appropriate to protect the rights
      and interest of participants under the 2005 Plan.




The
      2005
      Plan will continue in effect until July 29, 2015, unless earlier terminated.
      Generally, the Board of Directors may amend, alter or terminate the 2005 Plan
      at
      any time, provided that without shareholder approval, the 2005 Plan cannot
      be
      amended to increase the number of shares authorized, change the class of persons
      eligible to receive incentive stock options or effect any other change that
      would require shareholder approval under any applicable law or NASDAQ rule.
      Generally, the Compensation Committee may amend, alter or terminate an award,
      except that a recipient must consent to any change that would materially
      adversely affect the rights of the recipient with respect to the award. The
      Compensation Committee, however, has unilateral authority to amend the 2005
      Plan
      or any award as necessary to comply with applicable law.





*PokerTek,
      Inc. 2007 Stock Incentive Plan*





On
      May
      23, 2007, we adopted the 2007 Stock Incentive Plan (the “2007 Plan”). The
      maximum number of shares of our common stock that may be issued pursuant to
      awards granted under the 2007 Plan may not exceed the sum of: (i) 500,000 shares
      plus (ii) any shares of common stock remaining available for issuance as of
      the
      effective date of the 2007 Plan under the 2004 Plan and the 2005 Plan
      (collectively, the “Prior Plans”), plus (iii) any shares of common stock subject
      to an award granted under a Prior Plan if the award is forfeited, canceled,
      terminated, expires or lapses for any reason without the issuance of shares
      pursuant to the award or shares subject to an award granted under a Prior Plan
      which shares are forfeited to, or repurchased or reacquired by us.
      Notwithstanding the maximum number of shares authorized for issuance under
      the
      2007 Plan, the maximum number of shares of common stock that we may issue
      pursuant to incentive stock options is 500,000.





The
      Board
      of Directors has authority to administer the 2007 Plan and may delegate such
      authority to the Compensation Committee of the Board. However, the Board has
      sole authority to grant awards to directors who are not our employees or
      employees of our affiliates. Under the terms of the 2007 Plan, the Administrator
      has authority to take any action with respect to the 2007 Plan and make
      determinations deemed necessary or advisable for administering the 2007 Plan.
      Without limiting the foregoing, the Administrator may also accelerate the date
      that any award may become exercisable, vested or earned in whole or in part
      without any obligation to accelerate such date with respect to any other award
      and may modify terms and conditions for exercise, vesting or earning of an
      award. Awards may be made to our employees, directors, and independent
      contractors.





11


The
      types
      of awards that may be granted under the 2007 Plan include stock options in
      the
      form of incentive stock options and nonqualified stock options, restricted
      awards in the form of restricted stock awards and restricted stock units, stock
      appreciation rights, performance awards in the form of performance shares and
      performance units, phantom stock awards and dividend equivalent awards. Each
      award agreement will specify the number and type of award, together with any
      other terms and conditions as determined by the Administrator.





Upon
      a
      change in control event, as defined in the 2007 Plan, and unless otherwise
      provided in individual award agreements or other agreements between us and
      a
      participant, awards generally will become fully exercisable, vested, earned
      and
      payable to the fullest extent of the original grant of the applicable award.
      However, if the Administrator determines that any or all awards will not vest
      or
      become exercisable on an accelerated basis if we (or the surviving or acquiring
      corporation, as the case may be) have taken such action, including but not
      limited to the assumption of awards granted under the 2007 Plan or the grant
      of
      substitute awards (in either case, with substantially similar terms or
      equivalent economic benefits as awards granted under the 2007 Plan), as the
      Administrator determines to be equitable or appropriate to protect the rights
      and interests of participants under the 2007 Plan.




The
      2007
      Plan will continue in effect until May 22, 2017, unless earlier terminated.
      The
      2007 Plan may be amended, altered, suspended and/or terminated at any time
      by
      the Board of Directors, subject to the following: (i) shareholder approval
      is
      required of any 2007 Plan amendment if such approval is required by applicable
      law, rule or regulation; and (ii) except for anti-dilution adjustments made
      under the 2007 Plan, the option price for any outstanding option or base price
      of any outstanding SAR granted under the 2007 Plan may not be decreased after
      the date of grant, nor may any outstanding option or SAR granted under the
      2007
      Plan be surrendered to us as consideration for the grant of a new option or
      SAR
      with a lower option price or base price than the original option or SAR, as
      the
      case may be, without shareholder approval of any such action. In addition,
      the
      Administrator may amend, alter, suspend and/or terminate any award,
      prospectively or retroactively, although, generally, no such action may be
      taken
      without a participant’s consent if his rights with respect to the award would be
      materially adversely affected.





However,
      the Administrator has the unilateral authority to (i) make adjustments to the
      terms and conditions of awards upon the occurrence of certain unusual or
      nonrecurring events affecting us or any affiliate or our financial statements
      or
      those of any affiliate, and to (ii) amend the 2007 Plan and any award to the
      extent necessary to comply with applicable laws, rules and regulations or
      changes to applicable laws, rules and regulations. The Administrator also may
      unilaterally cause any award granted under the 2007 Plan to be canceled in
      consideration of an alternative award or cash payment of an equivalent cash
      value (as determined by the Administrator) made to the holder of such canceled
      award. The Administrator also may impose forfeiture, recoupment or similar
      restrictions upon awards or shares issued or cash paid or payable pursuant
      to
      awards.





The
      following table sets forth information regarding all outstanding equity awards
      held by named executive officers at December 31, 2007 .




12


**OUTSTANDING
        EQUITY AWARDS AT FISCAL YEAR-END**
  **Option
                    Awards****Number
                    of**
                
                
                
                
                **Number
                    of****Securities**
                
                
                
                
                **Securities****Underlying**
                
                
                
                
                **Underlying****Unexercised**
                
                
                
                
                **Unexercised**
                
                
                
                
                **Option**
                
                
                **Option****Options
                    (#)**
                
                
                
                
                **Options
                    (#)**
                
                
                
                
                **Exercise**
                
                
                **Expiration****Name**
                
                
                **Exercisable**
                
                
                
                
                **Unexercisable**
                
                
                
                
                **Price**
                
                
                **Date**Christopher
                    J.C. Halligan
                
                
                37,500
                
                (1
                )
                
                112,500
                
                (1
                )
                $
                12.65
                
                
                September
                    29, 2016-
                
                
                
                
                125,000
                
                (1
                )
                $
                9.62
                
                
                September
                    28, 2017Mark
                    D. Roberson
                
                
                -
                
                
                
                
                75,000
                
                (1
                )
                $
                7.75
                
                
                December
                    31, 2017Hal
                    J. Shinn, III
                
                
                75,000
                
                (1
                )
                
                -
                
                
                
                $
                2.67
                
                
                August
                    31, 201456,250
                
                (1
                )
                
                18,750
                
                (1
                )
                $
                2.67
                
                
                August
                    31, 201415,000
                
                (1
                )
                
                5,000
                
                (1
                )
                $
                2.67
                
                
                December
                    31, 20145,625
                
                (1
                )
                
                9,375
                
                (1
                )
                $
                11.96
                
                
                March
                    31, 2016
 
 (1)
              These
                  options were granted on 09/30/2006. The unexercisable portion of
                  this
                  option as of December 31, 2007 vests and becomes exercisable in
                  equal
                  installments on 03/31/08, 09/30/08, 03/31/09, 09/30/09, 03/31/10
                  and
                  09/30/10.(2)
              These
                  options were granted on 09/28/2007. The unexercisable portion of
                  this
                  option as of December 31, 2007 vests and becomes exercisable in
                  equal
                  installments on 03/31/08, 09/30/08, 03/31/09, 09/30/09, 03/31/10,
                  09/30/10, 03/31/11 and 09/30/11.(3)
              These
                  options were granted on 12/31/2007. The unexercisable portion of
                  this
                  option as of December 31, 2007 vests and becomes exercisable in
                  equal
                  installments on 06/30/08, 12/31/08, 06/30/09, 12/31/09, 06/30/10,
                  12/31/10, 06/30/11, 12/31/11 and 06/30/12.(4)
              These
                  options were granted on 08/31/04 and are fully vested and
                  exercisable.(5)
              These
                  options were granted on 08/31/04. The unexercisable portion of
                  this option
                  as of December 31, 2007 vests and becomes exercisable in equal
                  installments on 02/29/08 and 08/31/08.(6)
              These
                  options were granted on 12/31/04. The unexercisable portion of
                  this option
                  as of December 31, 2007 vests and becomes exercisable in equal
                  installments on 06/30/08 and 12/31/08.(7)
              These
                  options were granted on 03/31/06. The unexercisable portion of
                  this option
                  as of December 31, 2007 vests and becomes exercisable in equal
                  installments on 03/31/08, 09/30/08, 03/31/09, 09/30/09 and
                  03/31/10.





In
      the
      event of termination of employment other than for cause (unless the applicable
      employment agreement provides to the contrary and unless the administrator
      of
      the 2007 Stock Incentive Plan determines otherwise), options and restricted
      stock awards granted in fiscal 2007 to certain of our executive and other
      officers, including the named executive officers, generally will continue to
      vest pursuant to the same vesting schedule as if such individual had remained
      an
      employee of PokerTek and, with respect to such options, the vested portions
      will
      be exercisable for the full option term.





**POTENTIAL
      PAYMENTS UPON TERMINATION, RETIREMENT, SEVERANCE OR
      CHANGE-IN-CONTROL**





Under
      SEC
      rules, we are required to estimate and quantify the payments and benefits that
      would be payable upon the occurrence of a triggering event, as if the triggering
      event had occurred as of the last business day of the last fiscal year.
      Accordingly, the discussion below sets forth the estimated payments and benefits
      that would have become payable if we had terminated the employment of one of
      our
      named executive officers without just cause or if one of our named executive
      officers had terminated his employment with us for good reason as of December
      31, 2007.





13


Mr.
      Crawford does not have an employment agreement and is not entitled to any
      potential payments upon termination, retirement, severance or change-in-control.
      Although Mr. White is no longer an employee, while he served as our Chief
      Executive Officer he did not have an employment agreement and is also not
      entitled to any potential payments upon termination, retirement, severance
      or
      change-in-control.





*Executive
      Employment Agreements*





In
      the
      event we terminate Mr. Halligan’s employment without cause (as defined in the
      employment agreement) or if Mr. Halligan terminates his employment for good
      reason (as defined in the employment agreement), Mr. Halligan is entitled to
      severance in the form of continuation of his base salary for three months,
      which
      would equal $40,000. In addition, if Mr. Halligan terminates his employment
      for
      good reason, he will be entitled to the severance benefits of $40,000 identified
      above, as well as additional severance in the form of reimbursement of any
      COBRA
      payments during the three-month period of $2,769. Further, if Mr. Halligan’s
      employment is terminated by us for any reason except cause, all stock options
      granted to him through the date of termination will vest immediately if he
      executes a general release with language acceptable to us on or before the
      effective date of termination. Because the closing price of our common stock
      on
      the NASDAQ Global Market on December 31, 2007 was less than the exercise price
      per share of each of Mr. Halligan’s stock options for which vesting would be
      accelerated, his stock options were valued at $0. In the event we terminate
      Mr.
      Halligan’s employment following a change of control or if we relocate Mr.
      Halligan to an office that is more than 75 miles from Charlotte, North Carolina
      without Mr. Halligan’s consent, Mr. Halligan is entitled to severance in the
      form of continuation of his base salary and benefits for three months, which
      would equal $40,000 and $2,769 respectively.





In
      the
      event we terminate Mr. Roberson’s employment without cause (as defined in the
      employment agreement) or if Mr. Roberson terminates his employment for good
      reason (as defined in the employment agreement), Mr. Roberson is entitled to
      severance in the form of continuation of his base salary for six months, which
      would equal $80,000. In addition, if Mr. Roberson terminates his employment
      for
      good reason, he will be entitled to the severance benefits of $80,000 identified
      above, as well as additional severance in the form of reimbursement of any
      COBRA
      payments during the six-month period of $5,539. Further, if Mr. Roberson’s
      employment is terminated by us for any reason except cause, all stock options
      granted to him through the date of termination will vest immediately if he
      executes a general release with language acceptable to us on or before the
      effective date of termination. Because the closing price of our common stock
      on
      the NASDAQ Global Market on December 31, 2007 was equal to the exercise price
      per share of each of Mr. Roberson’s stock options for which vesting would be
      accelerated, his stock options were valued at $0. In the event we terminate
      Mr.
      Roberson’s employment following a change of control or if we relocate Mr.
      Roberson to an office that is more than 75 miles from Charlotte, North Carolina
      without Mr. Roberson’s consent, Mr. Roberson is entitled to severance in the
      form of continuation of his base salary and benefits for six months, which
      would
      equal $80,000 and $5,539 respectively.





In
      the
      event we terminate Mr. Shinn’s employment without cause (as defined in the
      employment agreement) or if Mr. Shinn terminates his employment for good reason
      (as defined in the employment agreement), Mr. Shinn is entitled to severance
      in
      the form of continuation of his base salary for two months, which would equal
      $25,375. In addition, if Mr. Shinn terminates his employment for good reason,
      he
      will be entitled to the severance benefits of $25,375 identified above, as
      well
      as additional severance in the form of reimbursement of any COBRA payments
      during the two-month period of $1,846. Further, if Mr. Shinn’s employment is
      terminated by us for any reason except cause, all stock options granted will
      vest immediately if he executes a general release with language acceptable
      to us
      on or before the effective date of termination. Mr. Shinn’s stock options were
      valued at $863,600, which was calculated based on the difference between $7.75,
      the closing price of our common stock on the NASDAQ Global Market on December
      31, 2007, and the exercise price per share of each option for which vesting
      would be accelerated. In the event we terminate Mr. Shinn’s employment following
      a change of control or if we relocate Mr. Shinn to an office that is more than
      75 miles from Charlotte, North Carolina without Mr. Shinn’s consent, Mr. Shinn
      is entitled to severance in the form of continuation of his base salary and
      benefits for two months, which would equal $25,375 and $1,846
      respectively.








**DIRECTOR
      COMPENSATION**





Except
      as
      described below, none of our directors received an annual retainer or other
      form
      of compensation for his services as a member of the Board during fiscal
      2007.





14


In
      January 2005, we entered into a Board Member Agreement with Lyle Berman pursuant
      to which, for his service on the Board, we granted Mr. Berman an option to
      purchase 200,000 shares of our common stock at a purchase price equal to $2.67,
      under the terms and conditions set forth in the Stock Option Agreement (the
      “Option Agreement”). Under the Board Member Agreement, 50,000 shares vested in a
      series of four (4) successive equal quarterly installments over the one year
      period measured from the date of the agreement upon Mr. Berman’s completion of
      each additional quarter over a one-year period. The remaining option shares
      will
      vest in a series of twelve successive equal quarterly installments upon Mr.
      Berman’s completion of each additional quarter serving as a member of the Board
      over the three-year period beginning one year from the date of the Option
      Agreement. The Option Agreement provides that all shares subject to the Option
      Agreement at the time of a change of control (as defined in the 2004 Stock
      Incentive Plan) not otherwise vested shall automatically vest in full
      immediately prior to the effective date of the change of control so that the
      option may be exercised for any or all of the shares. In addition, if Mr. Berman
      is terminated without cause (as defined in the Option Agreement) as a member
      of
      the Board without his written consent, or if our shareholders do not re-elect
      Mr. Berman to the Board at any time during the term of the option, or in the
      event of a constructive termination (as defined in the Option Agreement) of
      Mr.
      Berman’s service as a member of the Board at any time during the term of the
      option, the option shall become exercisable in full and may be exercised for
      any
      or all of the shares. In January 2005, we also entered into an Indemnification
      Agreement with Lyle Berman which is described in more detail under the heading
      “Indemnification Agreement” below.





In
      March
      2006, the Board entered into a Board Member Agreement and a Non-Employee
      Director Stock Option Agreement with Mr. Lahti that established his compensation
      for service as a member of the Board as follows : (i) an
      annual fee of $50,000, payable on a quarterly basis; and (ii) a one-time
      grant of a nonqualified option for 50,000 shares of our common stock at the
      closing market price of our common stock on March 31, 2006, which was
      $11.96. Pursuant to the Non-Employee Director Stock Option Agreement, the option
      has a 10-year term and the shares of our common stock subject to option will
      vest 5% per quarter. The first 5% installment became exercisable on
      June 30, 2006. In addition, pursuant to the Board Member Agreement:
      (i) Mr. Lahti agreed to certain representations and covenants relating
      to non-disclosure of certain information and restrictions on activities relating
      to the marketing and distribution of certain poker tables; and (ii) we will
      reimburse all expenses incurred by Mr. Lahti in the course of the
      performance of his duties as a director that we approve in advance.





All
      non-employee directors are eligible to receive discretionary stock-based awards
      under our 2007 Stock Incentive Plan. **** For
      fiscal year 2007, no such discretionary equity awards were made to non-employee
      directors.


**Fees
                  Earned****or
                  Paid in**
              
              
              
              
              **Option****Name**
              
              
              **Cash**
              
              
              
              
              **Awards**
              
              
              
              
              **Total**Joseph
                  J. Lahti
              
              $
              50,000
              
              (1
              )
              $
              -
              
              (2
              )
              $
              50,000Arthur
                  Lee Lomax
              
              $
              27,000
              
              (3
              )
              $
              -
              
              
              
              $
              27,000Lyle
                  Berman
              
              $
              -
              
              
              
              $
              -
              
              (4
              )
              $
              -


(1)
              Pursuant
                  to his Board Member Agreement, Mr. Lahti received this amount as
                  a
                  retainer for his service on the Board during 2007.(2)
              As
                  of December 31, 2007, Mr. Lahti held options to acquire 50,000
                  shares of
                  the Company’s common stock, of which 17,500 are vested and
                  exercisable.(3)
              Mr.
                  Lomax received this amount as a pro-rated retainer for his service
                  on the
                  Board during 2007.(4)
              As
                  of December 31, 2007, Mr. Berman held options to acquire 200,000
                  shares of
                  the Company’s common stock, of which 137,500 are vested and
                  exercisable.





As
      noted
      above, Messrs. Berman, Lomax and Lahti received no stock option grants in 2007,
      and Mr. Berman received no compensation during 2007.








**COMPENSATION
      COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION**




15


The
      current members of the Compensation Committee are Messrs. Berman (Chairman),
      Lomax and Lahti, each of whom also served as a member of the Compensation
      Committee during 2007. None of the current members of the Compensation Committee
      has ever served as an officer or employee of PokerTek. No interlocking
      relationships exist between PokerTek’s current Board of Directors or
      Compensation Committee and the board of directors or compensation committee
      of
      any other company.







**Item 12.**   **Security
      Ownership of Certain Beneficial Owners and Management**  **and
      Related Stockholder Matters**





**EQUITY
      COMPENSATION PLAN INFORMATION**





The
      following table summarizes information as of December 31, 2007 relating to
      our
      equity compensation plans, under which grants of stock options, restricted
      stock
      and other rights to acquire shares of our common stock may be granted from
      time
      to time.


**Number
                  of securities****remaining
                  available for****Number
                    of securities to be**
              
              **Weighted
                  average**
              
              **future
                  issuance under the****issued
                    upon exercise of**
              
              **exercise
                  price of**
              
              **equity
                  compensation plan****outstanding
                    options,**
              
              **outstanding
                  options,**
              
              **(excluding
                  securities****Plan
                    Category**
              
              **warrants
                    and rights**
              
              **warrants
                  and rights (1**)****
              
              **reflected
                  in column(a)) (2**)******(a)**
              
              **(b)**
              
              **(c)**Equity
                  compensation plan approved
              
              
              2,034,825
              
              $
              8.42
              
              
              90,175by
                  security holdersEquity
                  compensation plan notapproved
                  by security holders
              
              
              -
              
              
              -
              
              
              -Total
              
              
              2,034,825
              
              $
              8.42
              
              
              90,175
  (1)
              The
                  exercise prices for outstanding options granted to employees under
                  the
                  2004, 2005 and 2007 plans range from $2.67 to $12.65 per share,
                  with a
                  weighted average exercise price of $8.42 per share.(2)
              In
                  addition to being available for future issuance upon exercise of
                  stock
                  options that may be granted after December 31, 2006, our 2005 stock
                  incentive plan provides for the issuance of restricted stock awards
                  and
                  other stock-based awards.





**SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT**




The
      following table sets forth information with respect to the beneficial ownership
      of our common stock as of March 31, 2008 by (a) each person known by us to
      own
      beneficially more than five percent of the outstanding shares of our common
      stock, (b) each director and nominee for director, (c) the Named Executives
      (as
      defined in “Summary Compensation Table,” below), and (d) all current directors
      and executive officers as a group. Beneficial ownership is determined in
      accordance with the rules of the SEC. In computing the number of shares
      beneficially owned by a person and the percentage ownership of that person,
      shares of common stock subject to options or warrants held by that person that
      are currently exercisable or that are or may become exercisable within 60 days
      of March 31, 2008 are deemed outstanding. These shares, however, are not deemed
      outstanding for purposes of computing the percentage ownership of any other
      person. Except as indicated in the footnotes to this table and under applicable
      community property laws, each shareholder named in the table has sole voting
      and
      dispositive power with respect to the shares set forth opposite the
      shareholder’s name. Unless otherwise noted, the address of all listed
      shareholders is c/o PokerTek, Inc., 1150 Crews Road, Suite F, Matthews, North
      Carolina 28105.





16


**Number
                  of Shares**
              
              
              **Percent
                  of****Name
                  of Beneficial Owner**
              **Beneficially
                  Owned**
              
              
              **Class****Directors
                  and Executive Officers:**Gehrig
                  H. White
              2,129,900
              (1
              )
              19.48
              %Lyle
                  Berman
              479,438
              (2
              )
              4.38
              %James
                  T. Crawford, III
              1,224,900
              (3
              )
              11.20
              %Joseph
                  J. Lahti
              20,000
              (4
              )
              *Arthur
                  Lee Lomax
              360,100
              (5
              )
              3.29
              %Christopher
                  J. C. Halligan
              80,298
              (6
              )
              *Hal
                  Shinn
              163,125
              (4
              )
              1.49
              %Mark
                  D. Roberson
              1,000
              (7
              )
              *Al
                  directors and executive officers as a group (8 persons)
              4,458,761
              
              
              40.78
              %**5%
                  Shareholders:**GHW
                  Enterprises, LLC
              1,829,900
              (8
              )
              16.74
              %Crawford
                  Ventures, LLC
              1,373,900
              (9
              )
              12.56
              %Aristocrat
                  International Pty. Limited
              1,807,545
              (10
              )
              16.53
              %*
                  Indicates less than one percent
  (1)
              Consists
                  of 300,000 shares of common stock owned by Mr. White and 1,829,900
                  shares
                  of common stock owned by GHW Enterprises, LLC, which is controlled
                  by Mr.
                  White. Mr. White has sole voting and dispositive power with respect
                  to all
                  of the shares of common stock.(2)
              Includes
                  329,438 shares of common stock and 150,000 presently exercisable
                  options
                  to purchase our common stock owned by the Lyle A. Berman Revocable
                  Trust,
                  for which Mr. Berman serves as trustee and with respect to which
                  Mr.
                  Berman has sole voting and dispositive power.(3)
              Consists
                  of shares of common stock owned by Crawford Ventures, LLC, which
                  is
                  controlled by Mr. Crawford. Mr. Crawford has sole voting and dispositive
                  power with respect to all of the shares of common
                  stock.(4)
              Consists
                  of presently exercisable options to purchase our common
                  stock.(5)
              Consists
                  of 296,700 shares of common stock owned by Mr. Lomax, with respect to
                  which he has sole voting and dispositive power and 63,400 shares of
                  common stock owned by Charitable Remainder Unitrust, for which Mr.
                  Lomax shares dispositive power with Larry Swartz.(6)
              Consists
                  of 8,423 shares of common stock owned by Mr. Halligan and 71,875
                  presently
                  exercisable options to purchase our common stock.(7)
              Consists
                  of 1,000 shares of common stock owned by Mr. Roberson.(8)
              The
                  address of GHW Enterprises, LLC is 6207 Glynmoor Lakes Drive, Charlotte,
                  North Carolina 28277. Gehrig H. White, as manager, controls GHW
                  Enterprises, LLC and has sole voting and dispositive power with
                  respect to
                  the shares of common stock held by GHW Enterprises,
                  LLC.(9)
              The
                  address of Crawford Ventures, LLC is 5237 Lancelot Drive, Charlotte,
                  North
                  Carolina 28270. James T. Crawford, III, as manager, controls Crawford
                  Ventures, LLC and has sole voting and dispositive power with respect
                  to
                  the shares of common stock held by Crawford Ventures,
                  LLC.(10)
              Consists
                  of shares of common stock for which voting and dispositive power
                  is shared
                  by Aristocrat International Pty. Limited and Aristocrat Leisure
                  Limited.
                  The address of each of Aristocrat International Pty. Limited and
                  Aristocrat Leisure Limited is 71 Longueville Road, Lane Cove, NSW
                  2066,
                  Australia. Information reported is based on information provided
                  by
                  Aristocrat International Pty. Limited on February 12,
                  2008.
  17





**Item 13.**  **Certain
      Relationships and Related Transactions, and Director
      Independence**





**RELATED
      PERSON TRANSACTIONS**




*Identification
      of Transactions*




In January
      2006, we entered into an international distribution rights agreement with
      Aristocrat International Pty. Limited and its affiliates, which we refer to
      collectively as Aristocrat. Aristocrat International Pty. Limited is a wholly
      owned subsidiary and affiliate of Aristocrat Leisure Limited, a leading
      global provider of gaming solutions that focuses primarily on video slot
      machines, progressive systems and casino management systems. Aristocrat owns
      approximately 19% of our outstanding common stock and is currently one of our
      three largest shareholders. The distribution agreement provides Aristocrat
      with
      the sole and exclusive right to globally ( excluding
      the United States and Canada) distribute, market, enter into license agreements and, under certain
      circumstances, manufacture our PokerPro
      system, in return for Aristocrat’s payment to us of a portion of the license
      fees received by Aristocrat from each customer in connection with Aristocrat’s
      licensing of the PokerPro system. During 2007, we recorded $388,611 of license
      fees from Aristocrat, as discussed above, and also recorded $1,337,342 of
      equipment sales to Aristocrat to facilitate Aristocrat’s demonstrations of the
      PokerPro system to potential customers and regulatory bodies. At December 31,
      2007, Aristocrat owed the Company $176,476, which was paid in full during
      January 2008. During 2006, we recorded $13,735 of license fees from Aristocrat,
      as discussed above, and also recorded $1,144,829 of equipment sales to
      Aristocrat to facilitate Aristocrat’s demonstrations of the PokerPro system to
      potential customers and regulatory bodies. At December 31, 2006, Aristocrat
      owed
      the Company $169,344, which was paid in full during January 2007.





In
      September 2006, Crawford White Investments, LLC, an entity owned and controlled
      by our former Chief Executive Officer and our current President, purchased
      one
      of the buildings in which we lease one of our two spaces. During February 2007,
      the entity purchased the other building in which we lease space. The initial
      terms of our lease were negotiated at arms’ length and the terms of our existing
      leases were not modified upon this change in building ownership. Rent expense
      recorded for the aggregate leased space for the year ended December 31, 2007
      was
      $160,766 of which $176,500 was paid to Crawford White Investments, LLC. Rent
      expense recorded for the aggregate leased space for the year ended December
      31,
      2006 was $147,090 of which $45,490 was paid to Crawford White Investments,
      LLC.








**INDEMNIFICATION
      AGREEMENT**





In
      January 2005, we entered into an Indemnification Agreement with Lyle Berman,
      the
      Chairman of the Board of Directors, which provides for (i) indemnification
      against Mr. Berman’s personal liability to the fullest extent permitted by law
      and (ii) advancing of related expenses to Mr. Berman, including attorneys’ fees,
      judgments, fines and settlement amounts incurred by Mr. Berman in any action
      or
      proceeding.





In
      accordance with the listing standards of The NASDAQ Stock Market LLC, our Board
      of Directors must consist of a majority of independent directors. The Board
      has
      determined that Messrs. Berman, Lahti and Lomax are each an “independent
      director,” as that term is defined under the applicable NASDAQ listing
      standards. The Board performed a review to determine the independence of its
      members and made a subjective determination as to each of these independent
      directors that no transactions, relationships or arrangements exist that, in
      the
      opinion of the Board, would interfere with the exercise of independent judgment
      in carrying out the responsibilities of a director of PokerTek, Inc. In making
      these determinations, the Board reviewed information provided by the directors
      and us with regard to each director’s business and personal activities as they
      may relate to us and our management. Each of the members of the Board’s Audit
      Committee, Compensation Committee and Nominating and Governance Committee also
      has been determined by the Board to be independent under applicable NASDAQ
      listing standards and, in the case of the Audit Committee, under the
      independence requirements established by the Securities and Exchange
      Commission.







**Item 14.**   **Principal
      Accounting Fees and Services**





**INDEPENDENT
      REGISTERED PUBLIC ACCOUNTING FIRM FEE INFORMATION**




The
      following table shows the aggregate fees that we paid or accrued for the audit
      and other services provided by McGladrey & Pullen, LLP for fiscal years 2006
      and 2007.




18


**2007**
              
              **2006**Audit
                  Fees
              
              $
              177,605
              
              $
              118,000Tax
                  Fees
              
              
              19,700
              
              
              21,947All
                  Other Fees
              
              
              19,580
              
              
              4,100**Total**
              
              $
              216,885
              
              $
              144,047


*Audit
      Fees.* This
      category includes fees for (i) the audit of our annual financial statements
      and
      review of financial statements included in our quarterly reports on Form 10-Q;
      and (ii) services that are normally provided by the independent registered
      public accounting firm in connection with statutory and regulatory filings
      or
      engagements for the relevant fiscal years.




*Tax
      Fees* .
      This
      category consists of professional services rendered by McGladrey & Pullen,
      LLP for tax compliance, tax planning, tax return preparation, tax research
      and
      tax advice.




*All
      Other Fees* .
      This
      category includes the aggregate fees for products that are not reported above
      under “Audit Fees,” “Audit-Related Fees” or “Tax Fees.” These fees consist of
      professional services rendered
      by McGladrey & Pullen, LLP for assistance with investigations by various regulatory bodies.




The
      Audit
      Committee has considered the compatibility of the non-audit-related services
      performed by and fees paid to McGladrey & Pullen, LLP in fiscal year 2007
      and the proposed non-audit related services and proposed fees for fiscal year
      2008 and the possible effect of the performance of such services and payment
      of
      such fees on the independence of McGladrey & Pullen, LLP. All audit and
      non-audit services were approved by the Audit Committee, either specifically
      or
      in accordance with the Audit Committee’s pre-approval policies and procedures,
      prior to such services being rendered.








**AUDIT
      COMMITTEE PRE-APPROVAL POLICY**




The
      Audit
      Committee has adopted a policy that requires the Audit Committee to pre-approve
      all audit and permissible non-audit services to be provided by the independent
      registered public accounting firm (and any non-audit service provided by any
      other accounting firm) prior to the performance of each such
      service.







19


**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.


POKERTEK,
                  INC.Date:
                  April 29, 2008By: 
                  /s/ Christopher J.C. HalliganChristopher
                  J.C. HalliganChief
                  Executive Officer





Pursuant
      to the requirements of the Securities Exchange Act of 1934, this report has
      been
      signed below by the following persons on behalf of the registrant and in the
      capacities and on the dates indicated.





/s/
                  Christopher J.C. Halligan
              Date:
              April
                  29, 2008Name:
              Christopher
                  J.C. HalliganTitle:
              Chief
                  Executive Officer(Principal
                  Executive Officer)/s/
                  Mark D. Roberson
              Date:
              April
                  29, 2008Name:
              Mark
                  D. RobersonTitle:
              Chief
                  Financial Officer(Principal
                Financial
                Officer and Principal Accounting Officer)/s/
                  Lyle Berman
              Date:
              April
                  29, 2008Name:
              Lyle
                  BermanTitle:
              Chairman
                  of the Board of Directors/s/
                  Gehrig H. White
              Date:
              April
                  29, 2008Name:
              Gehrig
                  H. WhiteTitle:
              Vice
                  Chairman of the Board of Directors/s/
                  James T. Crawford, III
              Date:
              April
                  29, 2008Name:
              James
                  T. Crawford, IIITitle:
              President,
                  Secretary and Director/s/
                  Joseph J. Lahti
              Date:
              April
                  29, 2008Name:
              Joseph
                  J. LahtiTitle:
              Director/s/
                  Arthur Lee Lomax
              Date:
              April
                  29, 2008Name:
              Arthur
                  Lee LomaxTitle:
              Director


20


**EXHIBIT
      INDEX**





Exhibit
              No.
            Description





31.1
            Certification
                of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002.





31.2
              Certification
                  of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
                  Act of 2002.





21