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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
 
                             WASHINGTON, D.C. 20549
 
                            ------------------------
 
                                   FORM 10-Q
 
(Mark One)
 
  /X/    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934
 
                FOR THE QUARTERLY PERIOD ENDED JANUARY 31, 1999
                                       OR
 
  / /    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934
 
        FOR THE TRANSITION PERIOD FROM ______________ TO ______________
 
                        COMMISSION FILE NUMBER 000-23401
 
                            ------------------------
 
                          GAMETECH INTERNATIONAL, INC.
 
             (Exact name of registrant as specified in its charter)
 
                  DELAWARE                             33-0612983
      (State or other jurisdiction of       (IRS Employer Identification No.)
       incorporation or organization)
 
                 2209 W. 1ST STREET, SUITE 113, TEMPE, ARIZONA
                                     85281
                    (Address of principal executive offices)
                                   (Zip code)
 
(Registrant's telephone number, including area code):  (602) 804-1101
 
                            ------------------------
 
    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 / /
 
    On March 12, 1999 the registrant had outstanding 11,249,914 shares of its
Common Stock, par value $.001 per share.
 
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<PAGE>
                          GAMETECH INTERNATIONAL, INC.
                                     INDEX
 
<TABLE>
<CAPTION>
                                                                              PAGE
                                                                              NO.
                                                                              ----
<S>         <C>                                                               <C>
Part I.     Financial Information:
 
  Item 1.   Financial Statements (Unaudited)
 
            Balance Sheets
              January 31, 1999 and October 31, 1998.........................   3
 
            Statements of Income
              Three Months Ended January 31, 1999 and 1998..................   4
 
            Statements of Cash Flows
              Three Months Ended January 31, 1999 and 1998..................   5
 
            Notes to Financial Statements...................................   6
 
  Item 2.   Management's Discussion and Analysis of Financial Condition and
              Results of Operations.........................................  10
 
  Item 3.   Market Risk Disclosure..........................................  12
 
Part II.    Other Information
 
  Item 1.   Legal Proceedings...............................................  14
 
  Item 2.   Changes in Securities and Use of Proceeds.......................  15
 
  Item 6.   Exhibits and Reports on Form 8-K................................  16
 
Signatures..................................................................  17
</TABLE>
 
                                       2
<PAGE>
PART I. FINANCIAL INFORMATION
 
ITEM 1. FINANCIAL STATEMENTS
 
                          GAMETECH INTERNATIONAL, INC.
 
                                 BALANCE SHEETS
 
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
 
<TABLE>
<CAPTION>
                                                              JANUARY 31,  OCTOBER 31,
                                                                 1999         1998
                                                              -----------  -----------
                                                              (UNAUDITED)
<S>                                                           <C>          <C>
ASSETS:
Current assets:
  Cash and equivalents......................................  $   12,890   $   21,485
  Short-term investments....................................      13,014        4,102
  Accounts receivable, less allowance for doubtful accounts
    of $122 in 1999 and $49 in 1998.........................       1,705        1,677
  Deposits..................................................         174          167
  Prepaid expenses and other current assets.................         356          292
  Deferred income taxes.....................................         610          610
                                                              -----------  -----------
Total current assets........................................      28,749       28,333
Bingo units, furniture and equipment, net...................      13,048       12,496
Intangibles, less accumulated amortization of $422 in 1999
  and $269 in 1998..........................................         679          454
Other assets, net...........................................       1,128        1,194
                                                              -----------  -----------
Total assets................................................  $   43,604   $   42,477
                                                              -----------  -----------
                                                              -----------  -----------
 
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
  Accounts payable..........................................  $      400   $      325
  Accrued payroll and related obligations...................         218          258
  Other accrued liabilities.................................         255           78
  Income taxes payable......................................         319           74
  Current portion of long-term debt.........................         338          338
                                                              -----------  -----------
Total current liabilities...................................       1,530        1,073
 
Long-term debt..............................................         430          515
Deferred income taxes.......................................         567          567
 
Commitments and contingencies
 
Stockholders' equity:
  Common stock, $.001 par value: 40,000,000 shares
    authorized; 10,134,286 shares issued and outstanding in
    1999 and 10,126,226 in 1998.............................          10           10
  Capital in excess of par value............................      37,117       37,117
  Retained earnings.........................................       6,775        6,005
  Less: treasury stock, 762,400 shares in 1999 and 755,400
    shares in 1998, at cost.................................      (2,825 )     (2,810 )
                                                              -----------  -----------
Total stockholders' equity..................................      41,077       40,322
                                                              -----------  -----------
Total liabilities and stockholders' equity..................  $   43,604   $   42,477
                                                              -----------  -----------
                                                              -----------  -----------
</TABLE>
 
                       See notes to financial statements.
 
                                       3
<PAGE>
                          GAMETECH INTERNATIONAL, INC.
 
                              STATEMENTS OF INCOME
 
              FOR THE THREE MONTHS ENDED JANUARY 31, 1999 AND 1998
 
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
 
<TABLE>
<CAPTION>
                                                                                           1999           1998
                                                                                       -------------  ------------
                                                                                               (UNAUDITED)
<S>                                                                                    <C>            <C>
Revenues.............................................................................  $       4,534  $      3,956
 
Operating expenses:
  Cost of revenue....................................................................          1,656         1,149
  General and administrative.........................................................            874           758
  Sales and marketing................................................................            838           474
  Research and development...........................................................            211           180
                                                                                       -------------  ------------
                                                                                               3,579         2,561
                                                                                       -------------  ------------
Income from operations...............................................................            955         1,395
Equity in net loss of affiliate......................................................              0        (2,000)
Interest income, net.................................................................            308           205
                                                                                       -------------  ------------
Income (loss) before provision for income taxes......................................          1,263          (400)
Provision (benefit) for income taxes.................................................            493          (156)
                                                                                       -------------  ------------
Net income (loss)....................................................................  $         770  $       (244)
                                                                                       -------------  ------------
                                                                                       -------------  ------------
Basic net income (loss) per share....................................................  $        0.08  $      (0.03)
                                                                                       -------------  ------------
                                                                                       -------------  ------------
Diluted net income per share.........................................................  $        0.08  $      (0.03)
                                                                                       -------------  ------------
                                                                                       -------------  ------------
 
Shares used in the calculation of net income per share:
    Basic............................................................................      9,371,886     8,241,460
                                                                                       -------------  ------------
                                                                                       -------------  ------------
    Diluted..........................................................................     10,135,683     8,241,460
                                                                                       -------------  ------------
                                                                                       -------------  ------------
</TABLE>
 
                       See notes to financial statements.
 
                                       4
<PAGE>
                          GAMETECH INTERNATIONAL, INC.
 
                            STATEMENTS OF CASH FLOWS
 
              FOR THE THREE MONTHS ENDED JANUARY 31, 1999 AND 1998
 
                             (DOLLARS IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                                                                1999       1998
                                                                                              ---------  ---------
                                                                                                  (UNAUDITED)
<S>                                                                                           <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)...........................................................................  $     770  $    (244)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
  Depreciation and amortization.............................................................        827        481
  Accrued interest payable to officers......................................................          0         13
  Equity in net loss of affiliate...........................................................          0      2,000
  Changes in operating assets and liabilities:
    Accounts receivable, net................................................................        (28)      (490)
    Deposits................................................................................         (7)      (644)
    Prepaid expenses and other current assets...............................................        (64)      (143)
    Accounts payable........................................................................         75        169
    Accrued payroll and related obligations.................................................        (40)      (133)
    Other accrued liabilities...............................................................        177         49
    Income taxes payable....................................................................        245       (167)
                                                                                              ---------  ---------
Net cash provided by operating activities...................................................      1,955        891
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in short-term investments........................................................     (8,912)         0
Capital expenditures for bingo units, furniture and equipment...............................     (1,268)      (709)
Investment in and advances to affiliate.....................................................          0     (1,474)
Capitalized software development costs......................................................        (45)         0
Copyright costs.............................................................................       (225)         0
                                                                                              ---------  ---------
Net cash used in investing activities.......................................................    (10,450)    (2,183)
 
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on short-term notes payable and borrowings from bank...............................          0       (550)
Payments on long-term debt..................................................................          0     (2,866)
Payments for buy out of distributorship agreement...........................................        (85)         0
Proceeds from sales of common stock.........................................................          0     33,227
Payments for repurchase of common stock for treasury........................................        (15)         0
                                                                                              ---------  ---------
Net cash provided by (used in) financing activities.........................................       (100)    29,811
                                                                                              ---------  ---------
Net increase (decrease) in cash and equivalents.............................................     (8,595)    28,519
Cash and equivalents at beginning of period.................................................     21,485      1,020
                                                                                              ---------  ---------
Cash and equivalents at end of period.......................................................  $  12,890  $  29,539
                                                                                              ---------  ---------
                                                                                              ---------  ---------
</TABLE>
 
                       See notes to financial statements.
 
                                       5
<PAGE>
                          GAMETECH INTERNATIONAL, INC.
                         NOTES TO FINANCIAL STATEMENTS
                                JANUARY 31, 1999
                                  (UNAUDITED)
 
1. NOTES TO FINANCIAL STATEMENTS
 
NOTE A. BASIS OF PRESENTATION
 
    The balance sheet as of October 31, 1998 has been derived from the audited
financial statements at that date. The accompanying financial statements as of
January 31, 1999 and for the three months ended January 31, 1999 and 1998 have
been prepared by the Company without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Accordingly, certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principals have been
condensed or omitted. In the opinion of management, all adjustments, consisting
only of normal recurring adjustments considered necessary for a fair
presentation of the Company's financial condition, results of operations and
cash flows have been included. The results of operations for the three months
ended January 31, 1999 should not be considered indicative of results for the
fiscal year ending October 31, 1999. These financial statements should be read
in conjunction with the financial statements, and notes thereto, included in the
Company's Annual Report on Form 10-K for the year ended October 31,1998.
 
                                       6
<PAGE>
NOTE B. NET INCOME (LOSS) PER SHARE OF COMMON STOCK
 
    Net income (loss) per share of common stock is computed in accordance with
Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings per
Share". Presented below is a reconciliation of net income (loss) available to
common shareholders and the differences between actual weighted average shares
outstanding, which are used in computing basic earnings per share and diluted
weighted average shares, which are used in computing diluted earnings per share.
 
<TABLE>
<CAPTION>
                                                     (IN THOUSANDS, EXCEPT SHARE
                                                        AND PER SHARE AMOUNTS)
                                                    THREE MONTHS ENDED JANUARY 31
                                                    ------------------------------
                                                       1999               1998
                                                    -----------        -----------
                                                             (UNAUDITED)
<S>                                                 <C>                <C>
Numerator:
  Net income (loss), numerator for basic earnings
    per share.....................................  $       770        $      (244)
 
  Effect of dilutive securities:
    After-tax interest on convertible notes
      payable.....................................            0                  8
                                                    -----------        -----------
  Numerator for diluted earnings per share........  $       770        $      (236)
                                                    -----------        -----------
                                                    -----------        -----------
 
Denominator:
  Denominator for basic, weighted average
    shares........................................    9,371,886          8,241,460
 
  Effect of dilutive securities:
    Stock options.................................      763,797          1,299,373
    Convertible preferred stock...................            0            130,434
    Convertible notes payable.....................            0            399,829
                                                    -----------        -----------
  Denominator for diluted earnings per share......   10,135,683         10,071,096
                                                    -----------        -----------
                                                    -----------        -----------
Basic earnings per share..........................  $      0.08        $     (0.03)
                                                    -----------        -----------
                                                    -----------        -----------
Diluted earnings per share (1)....................  $      0.08        $     (0.02)
                                                    -----------        -----------
                                                    -----------        -----------
</TABLE>
 
------------------------
 
(1) The computed per share amount assuming full dilution for the 1998 period in
    antidilutive; therefore the basic per share amount for this period is also
    presented as the diluted amount on the face of the accompanying statements
    of income.
 
                                       7
<PAGE>
NOTE C. COMMITMENTS AND CONTINGENCIES
 
LITIGATION -
 
    In March 1996, a patent infringement action and demand for jury trial was
commenced against the Company by Bingo Technology Corporation, Inc. (formerly
Bingo Card Minder Corporation), in the U.S. District Court, Northern District of
California. The complaint alleged that the Company infringed, actively induced
or contributed to the infringement of U.S. Patent No. 4,378,940 (the "'940
Patent") by making, using and selling, among other acts, electronic bingo
devices that allegedly infringe upon at least one claim of the '940 Patent. The
'940 Patent was issued in 1983 and will expire in 2000 and is allegedly
infringed by the Company's hand-held bingo units. The plaintiff sought a
permanent injunction prohibiting the Company from infringement of the '940
Patent, as well as actual damages, enhanced (treble) damages, attorneys' fees
and costs.
 
    The Company acquired all of the Capital Stock of Bingo Technology
Corporation, Inc. on February 8, 1999. The patent infringement action was
dismissed with prejudice on February 17, 1999.
 
    On December 1, 1997, a cross-complaint for breach of contract and
declaratory relief was brought against the Company, Richard T. Fedor and Gary R.
Held by Diamond Game Enterprises ("Diamond") in the Superior Court of the State
of California, Los Angeles County. The cross-complaint is a response to a
complaint for recovery of money, and money received, and breach of contract
brought by Richard T. Fedor on September 30, 1997 against Diamond. Mr. Fedor
alleged that Diamond breached the terms of an oral agreement pursuant to which
Mr. Fedor loaned $300,000 to Diamond. In its cross-complaint, Diamond alleged
that the Company breached the terms of an oral contract by failing to pay a
$671,000 balance allegedly owed under an oral purchase agreement for 134
pull-tab dispensers which were to be manufactured by Diamond. The action was
settled on March 11, 1999 and the Company expects that it will be dismissed
imminently.
 
    On February 13, 1998, a purported securities class action complaint, WEISS
V. GAMETECH INTERNATIONAL, INC., No. 98-0268 PHX-ROS, was filed in the United
States District Court for the District of Arizona against the Company and
certain officers and directors alleging that defendants violated Section 11 of
the Securities Act of 1933 (the "Securities Act") by making false misleading
statements and omissions in GameTech's Form S-1 Registration Statement in
connection with the Company's public offering on November 25, 1997. Two other
complaints making nearly identical factual allegations have been consolidated
with the WEISS action for all purposes as IN RE GAMETECH, INC. SECURITIES
LITIGATION, Master File No. Civ. 98-0268 PHX-ROS. On July 17, 1998, the Court
appointed "lead plaintiff" and co-lead counsel.
 
    On September 21, 1998, plaintiffs filed a consolidated complaint, alleging a
claim against the Company and the individual defendants under Section 11 of the
Securities Act and a claim against the individual defendants under Section 15 of
the Securities Act, based upon the conduct alleged in the original complaints.
Plaintiffs seek an unspecified amount of damages.
 
    On November 5, 1998, defendants moved to dismiss the complaint. Defendants'
motion to dismiss is scheduled to be heard by the Court on May 24, 1999. There
has been no discovery to date and no trial is scheduled in this action.
Defendants believe that there is no merit to plaintiffs' allegations and intend
to defend the action vigorously.
 
    On December 7, 1998, GameTech intervened in Cause No. 97-11164, pending in
the 160th District Court in Dallas County, Texas. The lawsuit was filed by Trend
Gaming Systems, LLC, the Company's exclusive Texas distributor against four
charities and two individuals for breach of contract and tortious interference
with contract. GameTech alleges that it is a third-party beneficiary of the
contract between Trend and the four charities. Actual damages are estimated at
$126,000, plus attorneys' fees.
 
                                       8
<PAGE>
    The charities have filed a counter claim for damages, alleging that
misrepresentations were made in connection with the original contract, and
seeking to be reimbursed for their attorneys' fees. The charities and Trend
filed cross motions for summary judgment. Both motions were denied by the Court.
on February 22, 1999, the judge granted the charities motion to strike the
Company's plea in intervention. As a result GameTech is no longer officially a
party to the case.
 
    The case is set for jury trial on April 12, 1999.
 
    Many aspects of the Company's business involve substantial risks of
liability. In the normal course of business, the Company may be named as
defendant or co-defendant in lawsuits involving primarily claims for damages.
The Company's management believes that any pending litigation will not have a
material adverse effect on the Company.
 
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
  OF OPERATIONS
 
    The following discussion should be read in conjunction with the financial
statements and notes thereto included elsewhere in this Form 10-Q.
 
OVERVIEW
 
    GameTech installs electronic bingo systems in bingo halls under revenue
sharing agreements or at fixed rates per bingo session. The Company recognizes
revenue as its bingo units are utilized by players. Revenue growth is affected
by player acceptance of electronic bingo as an alternative to paper bingo and
the Company's ability to expand operations into new markets. Fixed-base bingo
units generate greater revenue per unit than hand-held bingo units, but also
require greater initial capital investment.
 
    The Company installs its electronic bingo systems at no charge to its
customers and capitalizes the costs. During the three month periods ended
January 31, 1999 and 1998, the Company's capital expenditures were approximately
$1.3 million and $709,000, respectively, almost all of which represented
investments in bingo equipment. The Company's cost of revenues consists
primarily of the expenses of providing customer service, including labor;
service related overhead and depreciation of the bingo systems installed in
customer locations. The Company records depreciation of bingo equipment over a
five-year estimated useful life using the straight-line method of depreciation.
 
RECENT DEVELOPMENTS
 
    On February 8, 1999, GameTech acquired all of the outstanding capital stock
of Bingo Technologies Corporation, a privately-held company specializing in
electronic bingo systems, pursuant to a Stock Purchase Agreement with the
stockholders of Bingo Technologies.
 
    Under terms of the Stock Purchase Agreement, GameTech issued 1,866,938
shares of Common Stock and paid an aggregate of $8,817,994 in cash and
$4,624,333 in unsecured promissory notes as consideration for the purchase of
all the outstanding stock of Bingo Technologies. Of these amounts, $1,952,211
and 373,387 shares were placed into escrow to secure certain indemnification
obligations of the Bingo Technology shareholders. In addition, GameTech entered
into employment agreements and noncompetition agreements with Gerald Novotny,
Keith Novotny and John Larsen , the Chairman and Chief Executive Officer, Chief
Operating Officer and President, respectively, of Bingo Technologies. Gerald
Novotny, Keith Novotny and John Larsen have also joined the Board of Directors
of GameTech.
 
    After the acquisition, the Company had over 32,000 portable units and 5,500
fixed base units generating revenue. GameTech gained access to new markets as
Bingo Technologies had product placed in twelve states in which GameTech had not
previously operated. GameTech's sales network grew by thirty additional
distributors and eleven sales representatives.
 
                                       9
<PAGE>
RESULTS OF OPERATIONS
 
THREE MONTHS ENDED JANUARY 31, 1999 COMPARED TO THREE MONTHS ENDED JANUARY 31,
1998
 
    REVENUES.  Revenues increased $578,000, or 14.6%, to $4.5 million for the
three months ended January 31, 1999 from $4.0 million for the three months ended
January 31, 1998. This increase in revenues was primarily due to a 65.1%
increase in the average number of units installed to 13,961 during the quarter
ended January 31, 1999 from 8,456 during the quarter ended January 31, 1998. The
impact of the large increase in the number of units was partially offset by a
competitive price adjustment made in mid-year 1998 and the higher ratio of hand
held units, which generate lower revenue per unit, verses fixed base units in
the installed base.
 
    COST OF REVENUES.  Cost of revenues increased $507,000 or 44.1%, to $1.7
million for the three months ended January 31, 1999, from $1.2 million for the
three months ended January 31, 1998. The increase in cost of revenues was
primarily due to the greater average number of units installed. As a percentage
of revenues, cost of revenues increased to 36.5% from 29.0% in the prior period.
The increase was primarily due to increased depreciation expense of $228,000
resulting from the higher number of installed units and increased personnel
costs of $180,000 due to the hiring of additional personnel to enable the
Company to service its customers and to facilitate the Company's growth in
installations. The increase in cost of revenues as a percent of revenue was due
primarily to the competitive price adjustment made in mid-year 1998.
 
    GENERAL AND ADMINISTRATIVE.  General and administrative expenses increased
$116,000, or 15.3%, to $874,000 for the three months ended January 31, 1999 from
$758,000 for the three months ended January 31, 1998. As a percentage of
revenues, general and administrative expenses remained constant at approximately
19.2%. The increase was due primarily to increased personnel costs of $74,000,
increased provision for allowance for doubtful accounts of $96,000 and increased
rent of $34,000, partially offset by reduced legal fees of $102,000.
 
    SALES AND MARKETING.  Sales and marketing expenses increased $364,000, or
76.8%, to $838,000 for the three months ended January 31, 1999 from $474,000 for
the three months ended January 31, 1998. The increase was primarily due to
larger distributor commissions of $172,000, and higher personnel costs of
$118,000 resulting from hiring additional salespersons to help achieve the
increased installed units and revenue.
 
    RESEARCH AND DEVELOPMENT.  Research and development expenses increased
$31,000, or 17.2%, to $211,000 for the three months ended January 31, 1999 from
$180,000 for the three months ended January 31, 1999. As a percentage of
revenues, research and development expenses remained constant at approximately
5%.
 
    INTEREST INCOME, NET.  Net interest income increased $103,000, to $308,000
of income for the three months ended January 31, 1999 from $205,000 for the
three months ended January 31, 1998. The increase was due primarily to the
interest earned on the net proceeds from the Company's initial public offering
(IPO), which closed on December 1, 1997, for a full three month period in 1999
compared to the two month period from the close of the IPO until January 31,
1998.
 
    EQUITY IN NET LOSS OF AFFILIATE.  For the three months ended January 31,
1998 the equity in net loss of affiliate of $2.0 million resulted from losses
incurred by the TSBN joint venture and the write-off of the Company's investment
in and advances to the joint venture with the discontinuance of the TSBN
operations in February 1998. Since the Company had financed this venture, it
recorded 100% of the losses rather than the 50% share which would have arisen
from its 50% ownership interest.
 
    PROVISION (BENEFIT) FOR INCOME TAXES.  The provision for income taxes
increased $649,000 to a provision of $493,000 for the three months ended January
31, 1999 from a benefit of $156,000 for the
 
                                       10
<PAGE>
three months ended January 31, 1998. The Company's effective income tax rate
remained constant at approximately 39% in each period.
 
    NET INCOME (LOSS).  As a result of the factors discussed above, net income
increased $1.0 million to net income of $770,000 for the three months ended
January 31, 1999 from a net loss of $244,000 for the three months ended January
31, 1998.
 
LIQUIDITY AND CAPITAL RESOURCES
 
    The Company received net proceeds of approximately $32.5 million from the
sale of 3,270,000 shares of Common Stock in its IPO, which closed on December 1,
1997. At January 31, 1999,the Company had cash and equivalents and short-term
investments totaling $25.9 million. The Company used $3.4 million of the net
proceeds to repay all outstanding long-term debt and short-term borrowings in
December 1997.
 
    The Company used its cash flow to primarily purchase additional bingo units
to install in customers' bingo halls and to meet its ordinary operating
expenses. GameTech currently has a $10.0 million line of credit (the "Revolving
Credit Facility") with Wells Fargo Bank, N. A. ("Wells Fargo"), which has an
interest rate based on the prime rate or LIBOR plus 2.0%, at the Company's
option, on which there was no outstanding balance at January 31, 1999.
 
    The Revolving Credit Facility expires on March 31, 2000. Covenants under
this credit facility restrict payment of cash dividends as well as other
customary covenants. The Revolving Credit Facility is secured by substantially
all of the Company's assets.
 
    Operating activities provided $2.0 million of cash for the three months
ended January 31, 1999 compared to $891,000 for the three months ended January
31, 1998. The $2.0 million consists primarily of $770,000 of net income,
adjusted for $827,000 of depreciation and amortization.
 
    Investing activities used $10.5 million in the three months ended January
31,1999 compared to $2.2 million in the three months ended January 31, 1998. The
increase was primarily due to $8.9 million of short-term investments.
 
    Financing activities used cash of $100,000 in the three months ended January
31, 1999 compared to providing $29.8 million for the three months ended January
31, 1998. The $29.8 million represented the net proceeds from the IPO less the
repayment of the Company's debt in December 1998.
 
    The Company believes that cash flow from operations and the remaining net
proceeds to the Company from the IPO, together with funds available under the
Revolving Credit Facility, will be sufficient to support its operations and
provide for budgeted capital expenditures and liquidity requirements for the
next twelve months. However, the Company's long term liquidity requirements will
depend on many factors, including, but not limited to, the rate at which the
Company expands its business, whether internally or through acquisitions and
strategic alliances. To the extent that the funds generated from the sources
described above are insufficient to fund the Company's activities in the long
term, the Company will be required to raise additional funds through public or
private financing. No assurance can be given that additional financing will be
available or that, if it is available, it will be on terms acceptable to the
Company.
 
                                       11
<PAGE>
YEAR 2000 RISKS
 
    Year 2000 compliance concerns the ability of certain computerized
information systems to properly recognize date-sensitive information as the year
2000 approaches. Systems that do not recognize such information could generate
erroneous data or cause systems to fail. The Company is at risk both for its own
Year 2000 compliance and for the Year 2000 compliance of those with whom it does
business.
 
    The Year 2000 compliance assessments of the Company's information and
operating systems are in progress. The Company is also investigating the Year
2000 compliance efforts of suppliers and other third party entities with whom
the Company does business and has material relationships, with the goal of
preventing the Company's operations from being adversely affected by significant
compliance problems of others. Based on the Company's current assessment, the
Company believes the current versions of its products are Year 2000
compliant--that is, they are capable of adequately distinguishing 21(st) century
dates from 20(th) century dates. During the remaining months prior to the
century change, the Company will continue to evaluate new versions of its
products and new software and information systems provided by third parties to
determine whether they are Year 2000 compliant.
 
    The total amount of costs to be incurred by the Company to address Year 2000
compliance issues cannot be reasonably estimated at this time. To date, the
Company has not incurred any material costs directly associated with the Year
2000 compliance efforts, except for compensation expenses associated with
salaried employees who have devoted some of their time to the Year 2000
assessment and remediation efforts. The Company does not expect the total cost
of the Year 2000 compliance issues to be material to its business, financial
condition and operating results. Despite the Company's current assessment, the
Company may not identify and correct all significant Year 2000 problems on a
timely basis. Year 2000 compliance efforts may involve significant time and
expense and unremediated problems could harm the Company's business, financial
condition and operating results. The Company currently has no contingency plans
to address the risks associated with unremediated Year 2000 problems.
 
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
    The Company's Revolving Credit Facility with Wells Fargo is a $10.0 million
line of credit with an interest rate based on the prime rate or LIBOR plus 2.0%,
at the Company's option. The line of credit will expire on March 31, 2000.
 
    Because the interest rate on the Revolving Credit Facility is variable, the
Company's cash flow may be affected by increases in interest rates, in that the
Company would be required to pay more interest in the event that both the prime
and LIBOR interest rates increase. Management does not, however, believe that
any risk inherent in the variable-rate nature of the loan is likely to have a
material effect on the Company's interest or available cash. The Company
currently maintains a zero balance on the Revolving Credit Facility. Even if the
Company were to draw down on the line prior to its expiration and an unpredicted
increase in both alternate rates occurred, it would not be likely to have a
material effect on the Company's interest expense or available cash.
 
    SENSITIVITY ANALYSIS.  Assuming the Company had a $2 million balance
outstanding as of January 31, 1999, the rate of interest calculated using the
prime rate option would be 7.75%. The Company's monthly interest payment, if the
rate stayed constant would be $12,917. If the prime rate rose to 13% , which
assumes a very large increase, the Company's monthly payment would be $21,667. A
more likely increase of 1 or 2%, given the recent trend of decreasing and
relatively low interest rates, would give the Company a monthly payment of
$14,583 or $16,250, respectively. The Company does not believe the risk
resulting from such fluctuations is material nor that the payment required would
have a material effect on cash flow.
 
                                       12
<PAGE>
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995
 
    This document includes various "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Sections
21E of the Securities Exchange Act of 1934, as amended, which represent the
Company's expectations or beliefs concerning future events. Statements
containing expressions such as "believes," "anticipates" or "expects" used in
the Company's press releases and periodic reports on Forms 10-K and 10-Q filed
with the Commission are intended to identify forward-looking statements. All
forward-looking statements involve risks and uncertainties. Although the Company
believes its expectations are based upon reasonable assumptions within the
bounds of its knowledge of its business and operations, there can be no
assurances that actual results will not materially differ from expected results.
The Company cautions that these and similar statements included in this report
are further qualified by important factors that could cause actual results to
differ materially from those in the forward-looking statements. Such factors
could include, without limitation, the following: increased competition in
existing markets; a decline in the public participation in bingo; the
limitation, conditioning or suspension of any of the Company's bingo permits or
licenses; increases in or new taxes imposed on bingo revenues or bingo devices;
a finding of unsuitability by regulatory officers with respect to the Company's
officers, directors or key employees; loss or retirement of key executives;
adverse economic or regulatory conditions in the Company's key markets; adverse
results of significant litigation matters. Readers are cautioned not to place
undue reliance on forward-looking statements, which speak only as of the date
thereof. The Company undertakes no obligation to publicly release any revisions
to such forward-looking statements to reflect events or circumstances after the
date hereof.
 
                                       13
<PAGE>
PART II. OTHER INFORMATION
 
ITEM 1. LEGAL PROCEEDINGS
 
    In March 1996, a patent infringement action and demand for jury trial was
commenced against the Company by Bingo Technology Corporation, Inc. (formerly
Bingo Card Minder Corporation), in the U.S. District Court, Northern District of
California. The complaint alleged that the Company infringed, actively induced
or contributed to the infringement of U.S. Patent No. 4,378,940 (the "'940
Patent") by making, using and selling, among other acts, electronic bingo
devices that allegedly infringe upon at least one claim of the '940 Patent. The
'940 Patent was issued in 1983 and will expire in 2000 and is allegedly
infringed by the Company's hand-held bingo units. The plaintiff sought a
permanent injunction prohibiting the Company from infringement of the '940
Patent, as well as actual damages, enhanced (treble) damages, attorneys' fees
and costs.
 
    The Company acquired all of the Capital Stock of Bingo Technology
Corporation, Inc. on February 8, 1999. The patent infringement action was
dismissed with prejudice on February 17, 1999.
 
    On December 1, 1997, a cross-complaint for breach of contract and
declaratory relief was brought against the Company, Richard T. Fedor and Gary R.
Held by Diamond Game Enterprises ("Diamond") in the Superior Court of the State
of California, Los Angeles County. The cross-complaint is a response to a
complaint for recovery of money, and money received, and breach of contract
brought by Richard T. Fedor on September 30, 1997 against Diamond. Mr. Fedor
alleged that Diamond breached the terms of an oral agreement pursuant to which
Mr. Fedor loaned $300,000 to Diamond. In its cross-complaint, Diamond alleged
that the Company breached the terms of an oral contract by failing to pay a
$671,000 balance allegedly owed under an oral purchase agreement for 134
pull-tab dispensers which were to be manufactured by Diamond. The action was
settled on March 11, 1999 and the Company expects that it will be dismissed
imminently.
 
    On February 13, 1998, a purported securities class action complaint, WEISS
V. GAMETECH INTERNATIONAL, INC., No. 98-0268 PHX-ROS, was filed in the United
States District Court for the District of Arizona against the Company and
certain officers and directors alleging that defendants violated Section 11 of
the Securities Act of 1933 (the "Securities Act") by making false misleading
statements and omissions in GameTech's Form S-1 Registration Statement in
connection with the Company's public offering on November 25, 1997. Two other
complaints making nearly identical factual allegations have been consolidated
with the WEISS action for all purposes as IN RE GAMETECH, INC. SECURITIES
LITIGATION, Master File No. Civ. 98-0268 PHX-ROS. On July 17, 1998, the Court
appointed "lead plaintiff" and co-lead counsel.
 
    On September 21, 1998, plaintiffs filed a consolidated complaint, alleging a
claim against the Company and the individual defendants under Section 11 of the
Securities Act and a claim against the individual defendants under Section 15 of
the Securities Act, based upon the conduct alleged in the original complaints.
Plaintiffs seek an unspecified amount of damages.
 
    On November 5, 1998, defendants moved to dismiss the complaint. Defendants'
motion to dismiss is scheduled to be heard by the Court on May 24, 1999. There
has been no discovery to date and no trial is scheduled in this action.
Defendants believe that there is no merit to plaintiffs' allegations and intend
to defend the action vigorously.
 
    On December 7, 1998, GameTech intervened in Cause No. 97-11164, pending in
the 160th District Court in Dallas County, Texas. The lawsuit was filed by Trend
Gaming Systems, LLC, the Company's exclusive Texas distributor against four
charities and two individuals for breach of contract and tortious interference
with contract. GameTech alleges that it is a third-party beneficiary of the
contract between Trend and the four charities. Actual damages are estimated at
$126,000, plus attorneys' fees.
 
                                       14
<PAGE>
    The charities have filed a counter claim for damages, alleging that
misrepresentations were made in connection with the original contract, and
seeking to be reimbursed for their attorneys' fees. The charities and Trend
filed cross motions for summary judgment. Both motions were denied by the Court.
on February 22, 1999, the judge granted the charities motion to strike the
Company's plea in intervention. As a result GameTech is no longer officially a
party to the case.
 
    The case is set for jury trial on April 12, 1999.
 
    Many aspects of the Company's business involve substantial risks of
liability. In the normal course of business, the Company may be named as
defendant or co-defendant in lawsuits involving primarily claims for damages.
The Company's management believes that any pending litigation will not have a
material adverse effect on the Company.
 
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
 
    SALES OF UNREGISTERED SECURITIES DURING THE THREE MONTHS ENDED JANUARY 31,
     1999
 
    On various dates during the three months ended January 31, 1999, Company
employees exercised options granted in partial compensation for their services
to purchase an aggregate of 6,250 shares of Common Stock in private sales for an
aggregate consideration of $62.50 in reliance upon Section 4(2) of the
Securities Act as a transaction not involving a public offering.
 
    USE OF PROCEEDS
 
    On November 24, 1997, the Securities and Exchange Commission (the
"Commission") declared the Company's Registration Statement on Form S-1 (the
"Registration Statement") effective. The Commission file number assigned to the
Registration Statement is 333-34967. The Company filed the Registration
Statement in connection with the offering (the "Offering") of 3,710,000 shares
of its Common Stock.
 
    From the effective date of the Registration Statement to the end of the
reporting period the Company has used none of the net offering proceeds for
construction of plant, building and facilities; for the purchase of real estate;
for the acquisition of other businesses; or for working capital. The Company has
used $3.4 million for the repayment of indebtedness and $2.9 million for the
repurchase of Common Stock.
 
    None of these payments have been direct or indirect payments to directors,
officers or other affiliates of the Company.
 
                                       15
<PAGE>
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
 
    Not Applicable
 
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
    Not Applicable
 
ITEM 5. OTHER INFORMATION
 
    Not Applicable
 
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
 
    a)  Exhibits:
 
<TABLE>
<C>        <S>
      2.1  Stock Purchase Agreement by and among GameTech International, Inc.,
           Bingo Technologies Corporation and the Stockholders and Indemnitors,
           Dated as February 8, 1999 and related agreements
 
     10.1  Employment Agreement between GameTech International, Inc. and Richard
           H. Irvine
 
     27.1  Financial Data Schedule
</TABLE>
 
    b)  Reports on Form 8-K:
 
       There were no reports filed on Form 8-K during the quarter ended January
       31, 1999. Subsequent to January 31, 1999 the following reports were filed
       on Form 8K:
 
       On February 4, 1999, the Company filed a Form 8K announcing the
       resignation of Conrad J. Granito, Jr. as President and Chief Operating
       Officer.
 
       On February 23, 1999, the Company filed a Form 8K announcing the
       acquisition of Bingo Technologies Corporation.
 
                                       16
<PAGE>
                                   SIGNATURES
 
    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.
 
<TABLE>
<CAPTION>
          SIGNATURE                       TITLE                    DATE
------------------------------  --------------------------  -------------------
 
<C>                             <S>                         <C>
                                Chief Financial Officer /
     /s/ JOHN J. PAULSON          Treasurer (Authorized
------------------------------    Officer and Principal       March 17, 1999
       John J. Paulson            Financial Officer)
</TABLE>
 
                                       17