<PAGE>


                                    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, 1998

                                          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       (I.R.S. Employer Identification No.)
     incorporation or organization)

        2209 W. 1ST STREET, 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 [   ]



<TABLE>
<CAPTION>
     Class                                   Outstanding at March 13, 1998
     -----                                   -----------------------------
<S>                                          <C>
COMMON STOCK, PAR VALUE $.001 PER SHARE           9,847,092

</TABLE>


<PAGE>

                            GAMETECH INTERNATIONAL, INC.

                                       INDEX

 
<TABLE>
<CAPTION>
Part I.   Financial Information:                                                            Page No.
<S>                                                                                         <C>
Item 1.   Financial Statements  (Unaudited)


     Balance Sheets
          January 31, 1998 and October 31, 1997. . . . . . . . . . . . . . . . . . . . . . . . .  3

     Statements of Operations
          Three Months Ended January 31, 1998 and 1997 . . . . . . . . . . . . . . . . . . . . .  4

     Statements of Cash Flows
          Three Months Ended January 31, 1998 and 1997 . . . . . . . . . . . . . . . . . . . . .  5

     Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  7

Item 2.   Management's Discussion and Analysis of Financial Condition and
          Results of Operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  8

Item 3.   Mark Risk Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11

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>
 
<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,
                                                            1998       1997
                                                        ------------------------
                                                        (unaudited)
<S>                                                     <C>          <C>
 ASSETS:
 Current assets:
   Cash and equivalents                                   $  29,539   $   1,020
   Accounts receivable, less allowance for
     doubtful accounts of $191 in 1998
     and $164 in 1997                                         1,641       1,151
   Deposits                                                     752         108
   Prepaid expenses and other current assets                    125          49
   Prepaid income taxes                                          67           -
   Deferred income taxes                                        196         196
                                                        ------------------------

 Total current assets                                        32,320       2,524

 Bingo units, furniture and equipment, net                    9,284       9,025
 Intangibles, less accumulated amortization of
   $269 in 1998 and $238 in 1997                                336         368
 Investment in and advances to affiliate                          -         526
 Other assets                                                   156         808
                                                        ------------------------
 Total assets                                              $ 42,096    $ 13,251
                                                        ------------------------
                                                        ------------------------

 LIABILITIES AND STOCKHOLDERS' EQUITY:
 Current liabilities:
   Short-term borrowings from bank                               --    $    550
   Accounts payable                                             572         403
   Accrued payroll and related obligations                      192         325
   Other accrued liabilities                                    284         235
   Income taxes payable                                          --         167
   Current portion of long-term debt                             --       1,266
                                                        ------------------------
 Total current liabilities                                    1,048       2,946

 Convertible notes payable to officers, including
   accrued interest                                              --       1,526
 Long-term debt                                                  --       1,600
 Deferred income taxes                                          368         368

 Commitments and contingencies

 Redeemable convertible preferred stock, $.001 par
   value; 5,000,000 shares authorized; 400,000
   shares issued and outstanding in 1997 (none in
   1998);                                                        --       2,835

 Stockholders' equity:
   Common stock, $.001 par value;
     40,000,000 shares authorized;
     9,847,092 shares issued and
     outstanding in 1998 and 4,621,491
     in 1997                                                     10           5
   Capital in excess of par value                            36,979          36
   Retained earnings                                          3,691       3,935
                                                        ------------------------
 Total stockholders' equity                                  40,680       3,976
                                                        ------------------------
 Total liabilities and stockholders' equity               $  42,096   $  13,251
                                                        ------------------------
                                                        ------------------------

</TABLE>

                     See notes to financial statements.


<PAGE>

                            GAMETECH INTERNATIONAL, INC.
                          STATEMENTS OF INCOME OPERATIONS
                FOR THE THREE MONTHS ENDED JANUARY 31, 1998 AND 1997
                  (In thousands, except share and per share amounts)

<TABLE>
<CAPTION>
                                                             1998       1997
                                                               (Unaudited)
<S>                                                        <C>         <C>
 Revenues                                                   $ 3,956    $ 2,487

 Operating expenses:                                          
    Cost of revenues                                          1,149        608
    General and administrative                                  758        334
    Sales and marketing                                         474        282
    Research and development                                    180        116
                                                              -----      -----
                                                              2,561      1,340
                                                              -----      -----

 Income from operations                                       1,395      1,147

 Equity in net loss of affiliate                             (2,000)        --
 Interest expense                                               (42)      (102)
 Interest income                                                247         --
 Other                                                           --         12
                                                              -----      -----

 Income (loss) before provision for income taxes               (400)     1,057
 Provision (benefit) for income taxes                          (156)       425
                                                               ----        ---

 Net income (loss)                                          $ ( 244)     $ 632
                                                            -------       ----
                                                            -------       ----

 Basic net income (loss) per share                          $ (0.03)      $.14
                                                            -------       ----
                                                            -------       ----

 Diluted net income (loss) per share                        $ (0.03)      $.11
                                                            -------       ----
                                                            -------       ----

 Shares used in the calculation of net income
    per share


           Basic                                           8,241,460  4,477,852
                                                           ---------  ---------
           Diluted                                         8,241,460  6,445,887
                                                           ---------  ---------

</TABLE>

                      See notes to financial statements.

<PAGE>


                            GAMETECH INTERNATIONAL, INC.
                              STATEMENTS OF CASH FLOWS
                FOR THE THREE MONTHS ENDED JANUARY 31, 1998 AND 1997
                               (Dollars in thousands)


<TABLE>
<CAPTION>
                                                         1998           1997
                                                       ------------------------
                                                             (unaudited)
<S>                                                    <C>            <C>
 CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income (loss)                                     $    (244)     $    632
 Adjustments to reconcile net income (loss)
   to net cash provided by operating
   activities:                                               
     Depreciation and amortization                           481           265
     Accrued interest payable to officers                     13            45
     Equity in net loss of affiliate                       2,000            --
     Changes in operating assets and liabilities:
       Accounts receivable, net                             (490)         (399)
       Deposits                                             (644)           53
       Prepaid expenses and other current assets             (76)           11
       Prepaid income taxes                                  (67)           --
       Accounts payable                                      169           100
       Accrued payroll and related obligations              (133)          (24)
       Other accrued liabilities                              49           (29)
       Income taxes payable                                 (167)          348
                                                       ------------------------

 Net cash provided by operating activities                   891         1,002

 CASH FLOWS FROM INVESTING ACTIVITIES:
 Capital expenditures for bingo units, furniture
   and equipment                                            (709)       (1,071)
 Investment in and advances to affiliate                  (1,474)           --
 Capitalized software development costs                       --           (37)
                                                       ------------------------


 Net cash used in investing activities                    (2,183)       (1,108)

 CASH FLOWS FROM FINANCING ACTIVITIES:
 Proceeds from short-term borrowings from bank                --           350
 Payments on short-term notes payable and
   borrowings from bank                                     (550)           --
 Payments on long-term debt                               (2,866)           --
 Payment for repurchase of common stock and
   cancellation of a note payable to an officer               --          (250)
 Proceeds from sales of common stock                      33,227            10
                                                       ------------------------

 Net cash provided by financing activities                29,811           110
                                                       ------------------------

 Net increase in cash and equivalents                     28,519             4

 Cash and equivalents at beginning of year                 1,020           166
                                                       ------------------------
 Cash and equivalents at end of year                   $  29,539      $    170
                                                       ------------------------
                                                       ------------------------

</TABLE>

                         See notes to financial statements.
<PAGE>

                            GAMETECH INTERNATIONAL, INC.
                           NOTES TO FINANCIAL STATEMENTS
                                  JANUARY 31, 1998
                                    (UNAUDITED)


1.   NOTES TO FINANCIAL STATEMENTS

NOTE A. BASIS OF PRESENTATION

     The balance sheet as of October 31, 1997 has been derived from the 
audited financial statements at that date. The accompanying financial 
statements as of January 31, 1998 and for the three months ended January 31, 
1998 and 1997 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, 1998 should not 
be considered indicative of results for the fiscal year ending October 31, 
1998. 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, 1997.
<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, which is effective
for reporting periods ending after December 31, 1997. SFAS No. 128 requires the
restatement of prior periods earnings (loss) per share to conform to the new
standard. Presented below is 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,
Numerator:                                           1998                    1997
                                                     ----                    ----
<S>                                                  <C>                     <C>
  Net income (loss)                               $     (244)             $       632
                                              ---------------------------------------
  Numerator for basic earnings per share                (244)                     632

  Effect of dilutive securities:
    After-tax interest on
    convertible notes payable                              8                       27
                                              ---------------------------------------

  Numerator for diluted earnings per share        $     (236)             $       659
                                              ---------------------------------------
                                              ---------------------------------------

Denominator:

  Denominator for basic
                                 
  Weighted average shares                          8,241,460                4,477,852

  Effect of dilutive securities:
    Stock options                                  1,299,373                  586,044
    Convertible preferred stock                      130,434
    Convertible notes payable                        399,829                1,381,991
                                              ---------------------------------------

  Denominator for diluted earnings per share      10,071,096                6,445,887
                                              ---------------------------------------
                                              ---------------------------------------

  Basic earnings per share                       $    (0.03)             $      0.14
                                              ---------------------------------------
                                              ---------------------------------------

  Diluted earnings per share(1)                  $    (0.02)             $      0.10
                                              ---------------------------------------
                                              ---------------------------------------
</TABLE>

(1) The computed per share amount assuming full dilution for the 1998 period 
is antidilutive: therefore the basic per share amount for this period is also 
presented as the diluted amount on the face of the accompanying statement of 
operations.


<PAGE>

NOTE C. COMMITMENTS AND CONTINGENCIES

LITIGATION

     In November 1996, a patent infringement action and demand for jury trial
was commenced against the Company and five other defendants by FortuNet, Inc. in
the U.S. District Court, Southern District of California.  The other defendants
were Advanced Gaming Technology, Inc., American Video Systems, FortuNet Canada,
Inc., Network Gaming, Inc. (f/k/a/ Artificial Intelligence), and Multimedia
Games, Inc.  The complaint alleges that the Company, among others, has
infringed, actively induced or contributed to the infringement of U.S. Patent
No. 4,624,462 (the "'462 Patent") by making, using and selling, among other
acts, electronic bingo devices that allegedly infringe upon at least one claim
of the '462 Patent.  The '462 Patent was issued in 1986 and will expire in 2001
and is allegedly infringed by the Company's fixed-base bingo units.  The
plaintiff seeks a preliminary and permanent injunction prohibiting the Company
from infringement of the '462 Patent, as well as actual damages, enhanced
(treble) damages, attorneys' fees and any other costs.  The Company, in July
1997, won its motion for transfer and severance in this action.  The U.S.
District Court, for the District of Arizona, has set a pre-trial conference date
of February 22, 1999 at which time a trial date will be chosen.

     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 alleges that the Company has 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 seeks a
preliminary and permanent injunction prohibiting the Company from infringement
of the '940 Patent, as well as actual damages, enhanced (treble) damages,
attorneys' fees and costs.  A trial date has been set for December 7, 1998.

     The Company believes that its products do not infringe any valid claim of
either the '462 Patent or the '940 Patent and intends to continue to defend
against both actions vigorously.  However, both actions are in the early stages
of litigation, and there can be no assurance that favorable outcomes will be
obtained or that if either or both actions are resolved in favor of the
plaintiffs, such results would not have a material adverse effect on the
Company's financial position, results of operations or cash flow.

     In October 1997, two actions were commenced against the Company by Apex
Wholesale, Inc. ("Apex") in the U.S. District Court for the Southern District of
California.  The Company formerly purchased its hand-held units manufactured by
Tidalpower Technologies, Inc. ("Tidalpower") through Apex but terminated such
arrangement in September 1996 and now purchases hand-held units directly from
Tidalpower. The defendants (in addition to the Company) were Tidalpower, Green
Dollars Industrial Ltd. (a foreign corporation), Vern D. Blanchard, Richard T.
Fedor, Clarence H. Thiesen, Leo Lee (a foreign national), Doris Tsao (a foreign
national), and Morgan Chen (a foreign national).  In one action, Apex is
asserting copyright infringement, breach of contract, breach of fiduciary duty,
interference with contract and prospective economic advantage, and trade secret
claims on GameTech's hand-held bingo units. The complaint alleges that the
Company breached various oral agreements with Apex and then misappropriated,
developed and marketed hand-held bingo units which allegedly were developed
through a cooperative effort of Apex, Vern D. Blanchard, and Jeff Rogers (an
individual).  Apex seeks general damages, injunctive relief, exemplary and
punitive damages, attorney's fees, and any other costs the court deems proper.
The Company has filed two motions to dismiss for lack of subject matter
jurisdiction and failure to state a claim.  Both of these motions are scheduled
to be heard on March 23, 1998.

      In the second action, Apex seeks to avoid an alleged fraudulent transfer.
Apex alleges that the Company, as well as Tidalpower, Green Dollars Industrial
Ltd., Leo Lee, Doris Tsao, and Morgan Chen conspired to avoid a default judgment
entered in favor of Apex against Green Dollars Industrial Ltd.  Apex seeks
general damages in the amount of $400,400, special damages totaling $35,000,
exemplary or punitive damages in the sum of $1,201,200, prejudgment interest,
costs of suit and any other relief the court finds proper.   The Company has
filed two motions to dismiss for failure to state a claim and failure to join a
necessary party.  Both of these motions are scheduled to be heard on March 23,
1998.  On January 21, 1998, Apex filed a motion for writ of attachment in the
alleged fraudulent transfer action, seeking to attach $400,400 of the Company's
assets arising out of a writ of attachment directed against the property of a
third party, Green Dollars Industrial, Ltd., in an earlier proceeding.

<PAGE>

     The Company intends to vigorously defend itself against the Apex actions.
These actions are in the early stages of litigation and there can be no
assurance that favorable outcomes will be obtained or that if the actions are
resolved in favor of the plaintiff, such results would not have a material
adverse effect on the Company.

     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
alleges that Diamond breached the terms of an oral agreement pursuant to which
Mr. Fedor loaned $300,000 to Diamond.  In its cross-complaint, Diamond alleges
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.

     These actions are in the early stages of litigation and there can be no
assurance that favorable outcomes will be obtained or that if the actions are
resolved in favor of Diamond, such results would not have a material adverse
effect on the Company.  All activities in relation to both the cross-complaint
and complaint have been stayed by the mutual agreement of the parties until
March 23, 1998 so that ongoing settlement discussions may continue.

     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 has grown rapidly, and management believes that the Company has
had a competitive advantage resulting from the experience of its management and
the value it has provided its customers through a combination of quality
electronic bingo units and superior customer service and support. The Company's
recent growth has been driven by the increase in its installed base of bingo
units primarily resulting from the Company's entry into the Texas market in
August 1996 and introduction of an improved hand-held unit in April 1997.

     GameTech generates revenues by installing electronic bingo systems in bingo
halls under revenue sharing agreements, or to a lesser extent, 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, 1998 and 1997, the Company's capital expenditures were approximately
$709,000 and $1.1 million, 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.

     The Satellite Bingo Network ("TSBN") the Company's 50% owned joint 
venture, which launched operations on December 1, 1997, discontinued 
operations in February 1998. TSBN incurred losses principally due to a number 
of large bingo halls which had agreed to participate delaying their 
participation. The Company funded the operating losses of TSBN and 
consequently for financial reporting purposes has recorded 100 % of the 
operating losses. For the three months ended January 31, 1998, the Company 
recorded a loss of $ 2.0 million in connection with writing off its 
investment in and advances to TSBN. The Company does not anticipate any 
significant additional costs to be recognized due to the discontinuance of 
TSBN's operations.

<PAGE>

                             GAMETECH INTERNATIONAL, INC.
                  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                         CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

QUARTER ENDED JANUARY 31, 1998 COMPARED TO QUARTER ENDED JANUARY 31, 1997

     REVENUES.  Revenues increased $1.5 million, or 59.1%, to $4.0 million for
the three months ended January 31, 1998 from $2.5 million for the three months
ended January 31, 1997. This increase in revenues was primarily due to a 123%
increase in the average number of units installed to 8,456 during the quarter
ended January 31, 1998 from 3,787 during the quarter ended January 31, 1997,
partially offset by an 29% decrease in average revenues per unit attributable 
to the increased percentage of hand-held units installed, which generate lower
average revenue per unit.  Expansion into Texas accounted for $1.0 million of
the revenue increase during the quarter ended January 31, 1998.

     COST OF REVENUES.  Cost of revenues increased $541,000 or 89.0%, to $1.1 
million for the three months ended January 31, 1998, from $608,000 for the 
three months ended January 31, 1997.  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 29.0% from 24.4% in the 
prior period. The increase was primarily due to increased depreciation 
expense of $205,000 in the three months ended January 31, 1998 resulting from 
the higher number of installed units. Personnel costs increased $159,000 in 
the three months ended January 31, 1998 to enable the Company to service its 
customers and to facilitate the Company's growth in installations.

     GENERAL AND ADMINISTRATIVE.  General and administrative expenses increased
$424,000 or 127%, to $758,000 for the three months ended January 31, 1998 from
$334,000 for the three months ended January 31, 1997. As a percentage of
revenues, general and administrative expenses increased to 19.2% from 13.4% in
the prior period.  The significant components of the $424,000 increase consist
of: higher personnel costs of $107,000 resulting from hiring seven additional
personnel to help manage the Company's growth; increased professional services
of $244,000 and increased insurance costs of $30,000.

     SALES AND MARKETING.  Sales and marketing expenses increased $192,000, or
68.4%, to $474,000 for the three months ended January 31, 1998 from $282,000 for
the three months ended January 31, 1997.  The increase was primarily due to
larger distributor commissions of $129,000, costs associated with hiring an
additional salesperson of $22,000 and an increase in marketing expenses of
$19,000.

     RESEARCH AND DEVELOPMENT.  Research and development expenses increased
$64,000, or 55.2%, to $180,000 for the three months ended January 31, 1998 from
$116,000 for the three months ended January 31, 1997.  As a percentage of
revenues, research and development expenses remained constant at approximately
5%.

     INTEREST (EXPENSE) INCOME AND OTHER.  Interest (expenses) income and
other increased $295,000, to $205,000 of income for the three months ended
January 31, 1998 from $90,000 of expense for the three months ended January 31,
1997. The increase in net interest income was due primarily to the approximate
$32.5 million of net proceeds from the Company's initial public offering (IPO)
which closed on December 1, 1997. The Company paid off its approximate $ 3.4
million in debt with proceeds from the IPO in December 1997. The Company also 
paid off its approximately $3.4 million in debt with proceeds from the IPO in 
December 1997, thereby decreasing its interest payment obligations.

     EQUITY IN NET LOSS OF AFFILIATE.   Equity in net loss of affiliate of 
$2.0 million resulted from losses incurred by the TSBN joint venture for the 
quarter ended January 31, 1998 and to 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 financed this venture, it 
recorded 100% of the losses rather than the 50% share which would arise from 
its 50% ownership interest.

     PROVISION (BENEFIT) FOR INCOME TAXES.  Provision (benefit) for income taxes
decreased $581,000 to a benefit of $(156,000) for the three months ended January
31, 1998 from a provision of $425,000 for the three months ended January 31,
1997 primarily due to a net loss as a result of the loss from TSBN's
discontinuance. The Company's effective income tax rate remained constant at
approximately 40% in each quarter.

     NET INCOME (LOSS).  As a result of the factors discussed above, net income
decreased $ 876,000 for the three months ended January 31, 1998 from net income
of $632,000 for the three months ended January 31, 1997 to a net loss of
$244,000 for the three months.


<PAGE>

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, 1998, the Company had cash and equivalents 
of $29.5 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 has primarily used its cash flow to purchase additional 
bingo units to install in customers' bingo halls and to meet its ordinary 
operating expenses.  GameTech currently has with Wells Fargo Bank, N.A. 
("Wells Fargo") a $3 million line of credit (the "Revolving Credit 
Facility"), which has an interest rate based on the prime rate plus 0.5% or 
LIBOR plus 2.5%, at the Company's option on which the outstanding balance at 
January 31, 1998 was zero. The principal sources of the Company's liquidity 
prior to the IPO were: cash flow from operations; borrowing under the 
Revolving Credit Facility and a term loan with Wells Fargo (the "Term Loan"), 
which was repaid with a portion of the net proceeds for the IPO; the issuance 
to officers of promissory notes payable convertible into Common Stock and 
sales of Common Stock.  In addition on September 2, 1997 the Company issued 
and sold 400,000 shares of Series A Preferred Stock for net proceeds of $2.8 
million. All outstanding shares of Series A Preferred Stock were converted 
into Common Stock at the close of the IPO.

      The Revolving Credit Facility expires on April 11, 1998. The Company 
repaid borrowings under the Revolving Credit Facility with a portion of the 
net proceeds the IPO. The Company expects to maintain availability under the 
Revolving Credit Facility and does not anticipate that it will have 
difficulty refinancing or replacing the Revolving Credit Facility should it 
so desire. Covenants under this credit facility restrict payment of cash 
dividends and interest to holders of convertible notes without prior consent 
of Wells Fargo.

     Operating activities provided $891,000 of cash for the three months 
ended January 31, 1998 compared to $1.0 million for the three months ended 
January 31, 1997. The decrease was due to reduced earnings of $876,000, 
principally related to a $2.0 million charge to earnings from the 
discontinuance of operations and write-off of its investment in TSBN, 
partially offset by net increases in accounts receivable and deposits and 
decreases in accrued payroll and income taxes payable.

     Investing activities used $2.1 million in the three months ended January
31,1998 compared to $1.1 million in the three months ended January 31, 1997. The
increase was due advances of $1.5 million to TSBN, partially offset by lower
capital expenditure of $400,000.

     Financing activities provided cash of $29.8 million in the three months
ended January 31, 1998 compared to $110,000 for the three months ended January
31, 1997. The $29.8 million represents the net proceeds from the IPO less the
repayment of the Company's debt under the Revolving Credit Facility and the 
Term Loan.

     The Company believes that cash flow from operations and the 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.

<PAGE>

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     The Company's Revolving Credit Facility with Wells Fargo is a $3 
million line of credit with an interest rate based on the prime rate plus 
0.5% or LIBOR plus 2.5%, at the Company's option. It expires on April 11, 
1998.

     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. The Company currently 
maintains a zero balance on the Revolving Credit Facility (at the end of the 
fiscal 1997 period, the outstanding balance was approximately $550,000). 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.

     SENSITIVITY ANALYSIS. Assuming the Company had a $2 million balance 
outstanding as of January 31, 1998, the rate of interest calculated using the 
prime rate plus 0.5% option would be 9%. The Company's monthly interest 
payment, if the rate stayed constant would be $15,000. If the prime rate rose 
to 13%, which assumes a very large increase, the Company's monthly payment 
would be $22,500. 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 $16,667 or $18,333, respectively. The Company does not 
believe the risk resulting form such fluctuations is material nor that the 
payment required would have a material effect on cash flow.

     The Company anticipates that it will renew the Revolving Line of Credit 
after its term expires. It is too early to predict whether, if the line is 
renewed,the interest rate terms will remain the same or will be renegotiated.



<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


<PAGE>

PART II. OTHER INFORMATION

Item 1. Legal Proceedings


     In November 1996, a patent infringement action and demand for jury trial
was commenced against the Company and five other defendants by FortuNet, Inc. in
the U.S. District Court, Southern District of California.  The other defendants
were Advanced Gaming Technology, Inc., American Video Systems, FortuNet Canada,
Inc., Network Gaming, Inc. (f/k/a/ Artificial Intelligence), and Multimedia
Games, Inc.  The complaint alleges that the Company, among others, has
infringed, actively induced or contributed to the infringement of U.S. Patent
No. 4,624,462 (the "'462 Patent") by making, using and selling, among other
acts, electronic bingo devices that allegedly infringe upon at least one claim
of the '462 Patent.  The '462 Patent was issued in 1986 and will expire in 2001
and is allegedly infringed by the Company's fixed-base bingo units.  The
plaintiff seeks a preliminary and permanent injunction prohibiting the Company
from infringement of the '462 Patent, as well as actual damages, enhanced
(treble) damages, attorneys' fees and any other costs.  The Company, in July
1997, won its motion for transfer and severance in this action.  The U.S.
District Court, for the District of Arizona, has set a pre-trial conference date
of February 22, 1999 at which time a trial date will be chosen.

     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 alleges that the Company has 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 seeks a
preliminary and permanent injunction prohibiting the Company from infringement
of the '940 Patent, as well as actual damages, enhanced (treble) damages,
attorneys' fees and costs.  A trial date has been set for December 7, 1998.

     The Company believes that its products do not infringe any valid claim of
either the '462 Patent or the '940 Patent and intends to continue to defend
against both actions vigorously.  However, both actions are in the early stages
of litigation, and there can be no assurance that favorable outcomes will be
obtained or that if either or both actions are resolved in favor of the
plaintiffs, such results would not have a material adverse effect on the
Company's financial position, results of operations or cash flow.

     In October 1997, two actions were commenced against the Company by Apex
Wholesale, Inc. ("Apex") in the U.S. District Court for the Southern District of
California.  The Company formerly purchased its hand-held units manufactured by
Tidalpower Technologies, Inc. ("Tidalpower") through Apex but terminated such
arrangement in September 1996 and now purchases hand-held units directly from
Tidalpower. The defendants (in addition to the Company) were Tidalpower, Green
Dollars Industrial Ltd. (a foreign corporation), Vern D. Blanchard, Richard T.
Fedor, Clarence H. Thiesen, Leo Lee (a foreign national), Doris Tsao (a foreign
national), and Morgan Chen (a foreign national).  In one action, Apex is
asserting copyright infringement, breach of contract, breach of fiduciary duty,
interference with contract and prospective economic advantage, and trade secret
claims on GameTech's hand-held bingo units. The complaint alleges that the
Company breached various oral agreements with Apex and then misappropriated,
developed and marketed hand-held bingo units which allegedly were developed
through a cooperative effort of Apex, Vern D. Blanchard, and Jeff Rogers (an
individual).  Apex seeks general damages, injunctive relief, exemplary and
punitive damages, attorney's fees, and any other costs the court deems proper.
The Company has filed two motions to dismiss for lack of subject matter
jurisdiction and failure to state a claim.  Both of these motions are scheduled
to be heard on March 23, 1998.

      In the second action, Apex seeks to avoid an alleged fraudulent transfer.
Apex alleges that the Company, as well as Tidalpower, Green Dollars Industrial
Ltd., Leo Lee, Doris Tsao, and Morgan Chen conspired to avoid a default judgment
entered in favor of Apex against Green Dollars Industrial Ltd.  Apex seeks
general damages in the amount of $400,400, special damages totaling $35,000,
exemplary or punitive damages in the sum of $1,201,200, prejudgment interest,
costs of suit and any other relief the court finds proper.   The Company has
filed two motions to dismiss for failure to state a claim and failure to join a
necessary party.  Both of these motions are scheduled to be heard on March 23,
1998.  On January 21, 1998, Apex filed a motion for writ of attachment in the
alleged fraudulent transfer action, seeking to attach $400,400 of the Company's
assets arising out of a writ of attachment directed against the property of a
third party, Green Dollars Industrial, Ltd., in an earlier proceeding.
<PAGE>

     The Company intends to vigorously defend itself against the Apex actions.
These actions are in the early stages of litigation and there can be no
assurance that favorable outcomes will be obtained or that if the actions are
resolved in favor of the plaintiff, such results would not have a material
adverse effect on the Company.

     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
alleges that Diamond breached the terms of an oral agreement pursuant to which
Mr. Fedor loaned $300,000 to Diamond.  In its cross-complaint, Diamond alleges
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.

     These actions are in the early stages of litigation and there can be no
assurance that favorable outcomes will be obtained or that if the actions are
resolved in favor of Diamond, such results would not have a material adverse
effect on the Company.  All activities in relation to both the cross-complaint
and complaint have been stayed by the mutual agreement of the parties until
March 23, 1998 so that ongoing settlement discussions may continue.

     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, 1998

     On various dates during the three months ended January 31, 1998, Company 
employees exercised options granted in partial compensation of their services 
to purchase an aggregate of 16,250 shares of Common Stock in private sales for 
an aggregate consideration of $162.50 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 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 $29.2 
million for temporary investments in short-term securities of the net 
offering proceeds.

     None of these payments have been direct or indirect payments to 
directors, officers or other affiliates of the Company.

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:
               See Attached Exhibit Index

     b)   Reports on Form 8-K:

          There were no reports filed on Form 8-K during the quarter ended
          January 31, 1998


<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.


     SIGNATURE                     TITLE                         DATE

----------------------   Chief Financial Officer/Treasurer       -----------
John J. Paulson          (Authorized Officer and 
                         Principal Financial Officer)



<PAGE>

EXHIBIT INDEX


Exhibit
Number

 3.1    Certificate of Incorporation of the Company, as amended (1)
 3.2    Amended and Restated Bylaws of the Company (1)
 4.1    GameTech International, Inc. Incentive Stock Plan (1)
 4.2    Specimen Common Stock certificate (1)
10.1    GameTech International, Inc. Incentive Stock Plan (1)
10.2    Lease Agreement between Russ Jeter and GameTech International, Inc. (1)
10.3    Lease Agreement between Russ Jeter and TSBN, LLC (1)
10.4    Lease Agreement between North Point Associates Limited Partnership and 
        GameTech International, Inc. (1)
10.5    Joint Venture and Limited Liability Company Agreement by and between 
        GameTech International, Inc. and the Satellite Bingo Network (1)
10.6    Distribution Agreement between GameTech International, Inc. and 
        Trend Gaming Systems (1)
10.7    Distribution Agreement between M&M Operators and GameTech 
        International, Inc. (1)
10.8    Revolving Line of Credit Note of GameTech International, Inc., dated 
        April 11, 1997 in the principal amount of $3,000,000 payable to 
        Wells Fargo Bank, N.A. (1)
10.9    Form of Video Bingo System Placement Agreement (1)
10.10   Sublease Agreement between Trend Gaming Systems, LLC and GameTech 
        International, Inc. (1)
10.11   Amended Employment Agreement between GameTech International, Inc. and 
        Richard T. Fedor (1)
10.12   Amended Employment Agreement between GameTech International, Inc. and 
        Clarence H. Thiesen (1)
10.13   Amended Employment Agreement between GameTech International, Inc. and 
        Gary R. Held (1)
10.14   Amended Employment Agreement between GameTech International, Inc. and 
        Conrad J. Granito (1)
27.1    Financial Data Schedule (2)

---------------
(1)  Incorporated Herein by Reference to Registration Statement No. 333-34967
(2)  File with this Report