*Table
            of Contents*





**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
      10-Q**





**(Mark
                One)**R
            **QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934****For
                the quarterly period ended January 31, 2008****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
            
            (I.R.S.
                Employerof
                incorporation or organization)
            
            Identification
                No.)**900
                SANDHILL ROAD, RENO,
                NEVADA**
            
            **89521**(Address
                of principal executive
                offices)
            
            (Zip
                code)




Registrant’s
      telephone number, including area code: (775) 850-6000





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 R No £





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




Large
                accelerated filer£
            Accelerated
                filerRNon-accelerated
                filer£
            Smaller
                reporting company£





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).


Yes £ No R





On
      March
      3, 2008 the registrant had 12,309,201 outstanding shares of its Common Stock,
      par value $0.001 per share.







*Table
        of Contents*




**GAMETECH
      INTERNATIONAL, INC.**


**QUARTERLY
      REPORT ON FORM 10-Q**


**FOR
      THE QUARTERLY PERIOD ENDED JANUARY 31, 2008**


**INDEX**





**Page
                  No.**Part
                I. Financial Information:Item
                1. Financial Statements (Unaudited)Condensed
                Consolidated Balance Sheets as of January 31, 2008
                (Unaudited) and October 31, 2007
            
            
            3Unaudited
                Condensed Consolidated Statements of Income for the
                Three Months Ended January 31, 2008 and 2007
            
            
            4Unaudited
                Condensed Consolidated Statements of Cash Flows for
                the Three Months Ended January 31, 2008 and 2007
            
            
            5Notes
                to Unaudited Condensed Consolidated Financial
                Statements
            
            
            6Item
                2. Management’s Discussion and Analysis of Financial
                Condition and Results of Operations
            
            
            14Item
                3. Quantitative and Qualitative Disclosures About
                Market Risk
            
            
            17Item
                4. Controls and Procedures
            
            
            18Part
                II. Other Information:Item
                1. Legal Proceedings
            
            
            18Item
                1A. Risk Factors
            
            
            18Item
                2. Unregistered Sales of Equity Securities and Use of
                Proceeds
            
            
            19Item
                3. Defaults Upon Senior Securities
            
            
            19Item
                4. Submission of Matters to a Vote of Security
                Holders
            
            
            19Item
                5. Other Information
            
            
            19Item
                6. Exhibits
            
            
            19Signatures
            
            
            21




-2-
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          of Contents*




**PART
        1. FINANCIAL INFORMATION**
 
 **ITEM
        1. FINANCIAL STATEMENTS.**


**GAMETECH
        INTERNATIONAL, INC.**
 **CONDENSED
        CONSOLIDATED BALANCE SHEETS**
 **(In
        thousands, except share and per share amounts)**


**January
                  31,**
              
              **October
                  31,****2008**
              
              **2007****(Unaudited)**
              
              **(Note
                  1)****Assets:**Current
                  assets:Cash
                  and cash equivalents
              
              $
              7,632
              
              $
              3,630Short-term
                  investments
              
              
              500
              
              
              7,763Accounts
                  receivable, less allowance of $834 in 2008 and $2,429 in
                  2007
              
              
              6,452
              
              
              8,585Inventory
              
              
              4,230
              
              
              4,298Deposits
              
              
              14
              
              
              14Prepaid
                  expenses and other current assets
              
              
              990
              
              
              818Prepaid
                  taxes
              
              
              167
              
              
              76Deferred
                  income taxes
              
              
              2,635
              
              
              2,651Total
                  current assets
              
              
              22,620
              
              
              27,835Bingo
                  equipment, furniture and other equipment, net
              
              
              18,191
              
              
              19,902Goodwill,
                  net
              
              
              37,519
              
              
              37,519Intangibles,
                  less accumulated amortization of $5,069 in 2008 and $4,634 in
                  2007
              
              
              7,331
              
              
              7,766Restricted
                  cash
              
              
              506
              
              
              502Notes
                  Receivables
              
              
              100
              
              
              132Deferred
                  income taxes, long-term
              
              
              226
              
              
              226Investments
              
              
              3,167
              
              
              -Total
                  assets
              
              $
              89,660
              
              $
              93,882**Liabilities
                  and stockholders’ equity:**Current
                  liabilities:Accounts
                  payable
              
              $
              824
              
              $
              2,094Accrued
                  payroll and related obligations
              
              
              1,162
              
              
              1,074Accrued
                  loss contingencies
              
              
              4,022
              
              
              4,022Current
                  portion of long-term debt
              
              
              4,573
              
              
              4,462Other
                  accrued liabilities
              
              
              1,547
              
              
              2,230Total
                  current liabilities
              
              
              12,128
              
              
              13,882Long-term
                  debt, net of current portion
              
              
              24,209
              
              
              25,297Deferred
                  income taxes
              
              
              258
              
              
              224Total
                  liabilities
              
              $
              36,595
              
              $
              39,403Commitments
                  and contingencies
              
              
              -
              
              
              -Stockholders’
                  equity:Common
                  stock, $0.001 par value: 40,000,000 shares authorized; 14,447,732
                  shares
                  issued at January 31, 2008, and 14,371,547 shares issued at October
                  31,
                  2007
              
              $
              14
              
              $
              14Additional
                  paid in capital
              
              
              51,407
              
              
              51,355Retained
                  earnings
              
              
              12,037
              
              
              11,706Treasury
                  stock, at cost: 2,186,231 shares at January 31, 2008 and 1,855,325
                  shares
                  at October 31, 2007
              
              
              (10,393
              )
              
              (8,096
              )Related
                  party receivable
              
              
              -
              
              
              (500
              )Total
                  stockholders’ equity
              
              
              53,065
              
              
              54,479Total
                  liabilities and stockholders’ equity
              
              $
              89,660
              
              $
              93,882




The
        accompanying notes are an integral part of these unaudited condensed
        consolidated financial statements.
  -3-
 *Table
            of Contents*




**GAMETECH
        INTERNATIONAL, INC.**
 **CONDENSED
        CONSOLIDATED STATEMENTS OF INCOME**
 **(In
        thousands, except per share amounts)**
 **(Unaudited)**


**Three
                  Months****Ended
                  January 31,****2008**
              
              **2007**Net
                  revenue
              
              $
              15,184
              
              $
              12,016Cost
                  of revenue
              
              
              6,600
              
              
              4,922Gross
                  profit
              
              
              8,584
              
              
              7,094Operating
                  expenses:General
                  and administrative
              
              
              2,758
              
              
              1,972Sales
                  and marketing
              
              
              2,537
              
              
              2,908Research
                  and development
              
              
              1,489
              
              
              602Loss
                  contingencies
              
              
              -
              
              
              46Total
                  operating expenses
              
              
              6,784
              
              
              5,528Income
                  from operations
              
              
              1,800
              
              
              1,566Interest
                  expense
              
              
              (714
              )
              
              -Impairment
                  of investments
              
              
              (691
              )
              
              -Other
                  income, net
              
              
              123
              
              
              155Income
                  before income taxes
              
              
              518
              
              
              1,721Provision
                  for income taxes
              
              
              187
              
              
              649Net
                  income
              
              $
              331
              
              $
              1,072Net
                  income per share:Basic
              
              $
              0.03
              
              $
              0.09Diluted
              
              $
              0.03
              
              $
              0.08Shares
                  used in calculating net income per share:Basic
              
              
              12,426
              
              
              12,614Diluted
              
              
              12,677
              
              
              13,261




The
        accompanying notes are an integral part of these unaudited condensed
        consolidated financial statements.




-4-
 *Table
          of Contents*




**GAMETECH
        INTERNATIONAL, INC**
 **CONDENSED
        CONSOLIDATED STATEMENTS OF CASH
        FLOWS**
 **(Unaudited,
        in thousands)**


**Three
                  Months**
                **Ended
                  January 31,****2008**
              
              **2007****Cash
                  flows from operating activities:**Net
                  income
              
              $
              331
              
              $
              1,072Adjustments
                  to reconcile net income to net cash provided by operating
                  activities:Depreciation
                  and amortization
              
              
              2,691
              
              
              2,676Obsolescence
                  and loss on disposal of bingo terminals and related
                  equipment
              
              
              150
              
              
              (85
              )(Gain)/loss
                  on disposal of furniture and other equipment
              
              
              (6
              )
              
              62Loss
                  on investment impairment
              
              
              691
              
              
              -Stock
                  compensation expense
              
              
              52
              
              
              165Deferred
                  income taxes
              
              
              50
              
              
              (88
              )Interest
                  on short-term investments
              
              
              (108
              )
              
              (108
              )Interest
                  on restricted cash
              
              
              (4
              )
              
              (7
              )Change
                  in operating assets and liabilities:Accounts
                  receivable, net
              
              
              2,140
              
              
              (126
              )Inventory
              
              
              68
              
              
              -Prepaid
                  taxes
              
              
              (91
              )
              
              64Prepaid
                  expenses and other assets
              
              
              (42
              )
              
              (220
              )Notes
                  receivable
              
              
              32
              
              
              -Accounts
                  payable
              
              
              (900
              )
              
              (1,593
              )Accrued
                  payroll and related obligations
              
              
              88
              
              
              (83
              )Accrued
                  loss contingencies
              
              
              -
              
              
              46Income
                  taxes payable
              
              
              -
              
              
              657Other
                  accrued liabilities
              
              
              (683
              )
              
              (349
              )Net
                  cash provided by operating activities
              
              
              4,459
              
              
              2,083**Cash
                  flows from investing activities:**Proceeds
                  from sale of short-term investments
              
              
              3,513
              
              
              7,660Payments
                  for purchase of short-term investments
              
              
              -
              
              
              (7,669
              )Capital
                  expenditures for bingo equipment, furniture, and other
                  equipment
              
              
              (1,066
              )
              
              (2,706
              )Payment
                  for the acquisition of Summit Amusement & Distributing,
                  Ltd.
              
              
              -
              
              
              (36
              )Net
                  cash provided by (used in) investing activities
              
              
              2,447
              
              
              (2,751
              )**Cash
                  flows from financing activities:**Tax
                  benefit from stock options exercised
              
              
              -
              
              
              15Payments
                  on long-term debt
              
              
              (1,107
              )
              
              (6
              )Repurchase
                  of treasury stock
              
              
              (1,797
              )
              
              -Proceeds
                  from issuance of common stock
              
              
              -
              
              
              120Net
                  cash provided by (used in) financing activities
              
              
              (2,904
              )
              
              129Net
                  increase (decrease) in cash and cash equivalents
              
              
              4,002
              
              
              (539
              )Cash
                  and cash equivalents at beginning of period
              
              
              3,630
              
              
              5,411Cash
                  and cash equivalents at end of period
              
              $
              7,632
              
              $
              4,872**Supplemental
                  cash flow information:**Cash
                  paid during the period for:Interest
              
              $
              724
              
              $
              -Income
                  taxes
              
              $
              228
              
              $
              2**Non-cash
                  investing and financing activities:**Acquisition
                  of assets included in accounts payable
              
              $
              114
              
              $
              492Settlement
                  of related party receivable in the company's common stock
              
              $
              500
              
              $
              -Issuance
                  of receivable for asset disposal
              
              $
              7
              
              $
              -Issuance
                  of note payable for insurance
              
              $
              130
              
              $
              -




The
        accompanying notes are an integral part of these unaudited condensed
        consolidated financial statements.
  -5-
 *Table
            of Contents*




**GAMETECH
        INTERNATIONAL, INC.**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL
        STATEMENTS**
 **(UNAUDITED)**


**NOTES
      TO FINANCIAL STATEMENTS**





**1.
      BASIS OF PRESENTATION**





The
      accompanying unaudited condensed consolidated financial statements and related
      disclosures as of January 31, 2008 have been prepared in accordance with U.S.
      generally accepted accounting principles applicable to interim financial
      information and with the instructions to Form 10-Q and Rule10-01 of Regulation
      S-X. Accordingly, they do not include all of the information and footnotes
      required by U.S. generally accepted accounting principles for complete financial
      statements. In our opinion, all adjustments (consisting of normal recurring
      adjustments) considered necessary for a fair presentation of our financial
      position and interim results have been included. Operating results for the
      three-month period ended January 31, 2008 are not necessarily indicative of
      the
      results that may be expected for the current fiscal year or any other
      period.





The
      balance sheet at October 31, 2007 has been derived from the audited financial
      statements at that date but does not include all of the information and
      footnotes required by U.S. generally accepted accounting principles for complete
      financial statements. These condensed unaudited consolidated financial
      statements should be read in conjunction with the consolidated financial
      statements and related notes, as well as other information included in our
      Annual Report on Form 10-K for the year ended October 31, 2007 and any other
      of
      our filings with the Securities and Exchange Commission.





**USE
      OF ESTIMATES**





The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States requires management to make estimates
      and assumptions that affect the amounts reported in the consolidated financial
      statements and accompanying notes. Allowance for doubtful accounts,
      obsolescence, impairment of goodwill, loss contingencies, and stock-based
      compensation are significant estimates made by us. Actual results could
      ultimately differ from those estimates.





**RECLASSIFICATIONS**





Certain
      prior period reclassifications have been made to conform to classifications
      in
      the current period.





**2.
      SIGNIFICANT ACCOUNTING POLICIES**





**REVENUE
      RECOGNITION**





We
      recognize revenue when the following criteria are met:




·
            
            Persuasive
                evidence of an arrangement between us and our customer
                exists,·
            
            Delivery
                has occurred or services have been rendered,·
            
            The
                price is fixed or determinable, and·
            
            Collectability
                is reasonably assured.





We
      earn
      our revenue in a variety of ways. We offer our products for lease or sale.
      We
      also sell service and software updates for our sold equipment.





*Bingo
      Equipment*




Revenue
      is recognized for bingo terminals and bingo systems installed as a single
      element placed in bingo halls under contracts based on (1) a fixed fee per
      use per session; (2) a fixed weekly fee per terminal; or (3) a
      percentage of the revenue generated by each terminal. Revenue recognition is
      a
      key component of our results of operations, and determines the timing of certain
      expenses, such as commissions. We recognize revenue when all of the following
      factors exist: (a) evidence of an arrangement with the customer;
      (b) play or availability of the bingo terminals; (c) a fixed or
      determinable fee; and (d) collectability is reasonably assured. We exercise
      judgment in assessing the credit worthiness of customers to determine whether
      collectability is reasonably assured. Should changes in conditions cause us
      to
      determine the factors are not met for future transactions, revenue recognized
      for future reporting periods could be adversely affected.





*Video
      Lottery Terminal*




Our
      product sales revenues are generated from the sale of video lottery terminals,
      conversion kits, content fees, license fees, participation fees, equipment
      and
      services. Revenues are recorded in accordance with Statement of Position No
      97-2 *Software
      Revenue Recognition* and are
      reported net of discounts, sales taxes and other taxes of a similar nature.
      Revenues related to contracted production are recognized as the related work
      is
      delivered. We recognize license fee revenues over the term of the associated
      agreement unless the fee is in exchange for products delivered or services
      performed that represent the culmination of a separate earnings process. Amounts
      received prior to completing the earnings process are deferred until revenue
      recognition criteria are met.





Our
      sales credit terms are predominately 30 days. In certain limited
      circumstances, we may extend credit terms up to 160 days.




-6-
 *Table
          of Contents*





**ACCOUNTS
      RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS**





Accounts
      receivable are recorded when revenue is recognized in accordance with our
      revenue recognition policy and represent claims against third parties that
      will
      be settled in cash. The carrying value of our receivables, net of allowances,
      represents our estimated net realizable value.





*Bingo
      Equipment*




We
      estimate the possible losses resulting from non-payment of outstanding accounts
      receivable arising from the lease of our bingo units. Our customer base consists
      primarily of entities operating in charitable, Native American, and commercial
      bingo halls located throughout the United States and the United Kingdom. In
      some
      jurisdictions, the billing and collection function is performed as part of
      a
      distributor relationship, and in those instances, we maintain allowances for
      possible losses resulting from non-payment by both the customer and distributor.
      We perform ongoing evaluations of our customers and distributors for credit
      worthiness, economic trends, changes in our customer payment terms, and
      historical collection experience when evaluating the adequacy of our allowance
      for doubtful accounts. We also reserve a percentage of our accounts receivable
      based on aging category. In determining these percentages, we review historical
      write-offs of our receivables, payment trends, and other available information.
      While such estimates have been within our expectations and the provisions
      established, a change in financial condition of specific customers or in overall
      trends experienced may result in future adjustments of our estimates of
      recoverability of our receivables.





*Video
      Lottery Terminals*




We
      estimate the possible losses resulting from non-payment of outstanding accounts
      receivable arising from the sale of video lottery terminals and related
      equipment. Our customer base consists of casinos located in various states
      and
      Native American territories. We perform ongoing evaluations of our customers
      and
      distributors for credit worthiness, economic trends, changes in our customer
      payment terms, and historical collection experience when evaluating the adequacy
      of our allowance for doubtful accounts.




**INVENTORIES**





Inventories
      are stated at the lower of cost or market. Our raw material is valued using
      the
      first-in, first-out method and our finished goods are valued using standard
      costing that approximates the first-in, first-out method. Management
      periodically reviews inventory balances, using recent and future expected sales
      to identify slow-moving or obsolete items. Inventories consist of the following
      at January 31 (in thousands):






January
                31, 2008Inventory
                - parts
            
            $
            2,870Inventory
                - equipment
            
            
            1,360Total
                Inventory
            
            $
            4,230




**BINGO
      EQUIPMENT, FURNITURE AND OTHER EQUIPMENT**





Bingo
      equipment includes portable and fixed-base player terminals as well as file
      servers, caller units, point-of-sale units, and other support equipment. Bingo
      equipment, furniture, and other equipment are stated at cost and depreciated
      using the straight-line method over the estimated useful lives of the assets.
      The estimated useful lives are as follows:





Bingo
                equipment
            
            
            3-5
                yearsOffice
                furniture and equipment
            
            
            3-7
                yearsLeasehold
                improvements
            
            
            10
                years





We
      provide reserves for excess or obsolete bingo terminals on hand that we do
      not
      expect to use. The reserves are based upon several factors, including estimated
      forecast of bingo terminal demand for placement into halls. The estimates of
      future bingo terminal demand may prove to be inaccurate, in which case we may
      have understated or overstated the provision required for excess or obsolete
      bingo terminals. Although we attempt to assure the accuracy of these estimated
      forecasts, any significant unanticipated changes in demand or technological
      developments could have a significant impact on the value of bingo terminals,
      results of operations, and financial condition.





**SOFTWARE
      DEVELOPMENT CAPITALIZATION**





We
      capitalize costs related to the development of certain software products that
      meet the criteria of Statement of Financial Accounting Standards (“SFAS”) No. 86
      - *Accounting
      for the Costs of Computer Software to Be Sold,*  *Leased,
      or Otherwise Marketed* .
      SFAS
      No. 86 provides for the capitalization of computer software that is to be used
      as an integral part of a product or process to be sold or leased, after
      technological feasibility has been established for the software and all research
      and development activities for the other components of the product or process
      have been completed. We are capitalizing qualified costs of software developed
      for new products or for significant enhancements to existing products. We cease
      capitalizing costs when the product is available for general release to our
      customers. We amortize the costs on a straight-line method over the estimated
      economic life of the product beginning when the product becomes available for
      general release.




-7-
 *Table
          of Contents*




The
      achievement of technological feasibility and the estimate of the product’s
      economic life require judgment. Any changes in key assumptions, market
      conditions, or other circumstances could result in an impairment of the
      capitalized asset and a charge to our operating results.





**GOODWILL**





We
      are
      required to perform an annual goodwill impairment review, and depending upon
      the
      results, the recorded goodwill may be written down and charged to income from
      operations when its carrying amount exceeds its estimated fair value. Goodwill
      is reviewed for possible impairment annually, or more frequently whenever events
      or changes in circumstances indicate that the carrying value may not be
      recoverable, such as a significant adverse change in legal factors or business
      climate, an adverse action or assessment by a regulator, unanticipated
      competition, or a loss of key personnel.





**LONG-LIVED
      ASSETS**





We
      have
      adopted the provisions of SFAS No. 144, *Accounting
      for the*  *Impairment
      or Disposal of Long-Lived Assets* .
      SFAS
      No. 144 requires impairment losses to be recognized for long-lived assets and
      identifiable intangibles, other than goodwill, used in operations when
      indicators of impairment are present and the estimated undiscounted cash flows
      are not sufficient to recover the assets’ carrying amount. The impairment loss
      is measured by comparing the fair value of the asset to its carrying
      amount.





**LEGAL
      CONTINGENCIES**





We
      are
      currently involved in various claims and legal proceedings (see Note 7 Legal
      Proceedings). Periodically, we review the status of each matter and assess
      the
      potential financial exposure. If the potential loss from any claim or legal
      proceeding is considered probable and the amount can be estimated, we accrue
      a
      liability for the estimated loss. Significant judgment is required in both
      the
      determination of probability and the determination as to whether an exposure
      can
      be reasonably estimated.





Because
      of uncertainties related to these matters, accruals are based only on the best
      information available at the time. As additional information becomes available,
      we reassess the potential liability related to our pending claims and litigation
      and may revise these estimates. Such revisions in the estimates of the potential
      liabilities could have a material impact on the results of operations and
      financial condition.





**STOCK-BASED
      COMPENSATION**





We
      generally grant stock options to our employees for a fixed number of shares
      with
      an exercise price equal to the fair value of the shares on the date of the
      grant.





We
      have
      adopted the Financial Accounting Standards Board (“FASB”) SFAS No. 123(R), *Share
      Based Payment* .
      This
      statement is a revision of SFAS No. 123, and supersedes APB Opinion No. 25,
      and
      its related implementation guidance. SFAS No. 123(R) addresses all forms of
      share-based payment awards including shares issued under employer stock purchase
      plans, stock options, restricted stock, and stock appreciation rights. Under
      SFAS No. 123(R), share-based payment awards result in a cost that will be
      measured at fair value on the award’s grant date. Stock options exercised in
      future periods will result in an adjustment within the Consolidated Statement
      of
      Cash Flows depicting a reduction to net cash provided by operating activities
      with an offsetting increase in net cash provided by financing activities related
      to incremental tax benefits. In the fourth quarter of the fiscal year 2005,
      our
      Board of Directors approved the acceleration of the vesting of all unvested
      stock options awarded under the 1997 Incentive Stock Plan. As a result, all
      options outstanding at October 31, 2005 were fully vested and no compensation
      cost for such options will be recognized in any future periods.





For
      the
      three-month period ended January 31, 2008, we recognized compensation expense
      of
      $51,297 and a related tax benefit of $18,518 for a net cost of $32,779. For
      the
      three-month period ended January 31, 2008 there was no effect to either the
      basic and diluted earnings per share as a result of recognizing the share-based
      compensation expense, net of tax.





For
      the
      three-month period ended January 31, 2007, we recognized compensation expense
      of
      $165,000, which is included in the respective department expenses in the
      Condensed Consolidated Statement of Income and a related tax benefit of $57,000
      for a net cost of $108,000. For the three-month period ended January 31, 2007
      diluted and basic earnings per share were reduced by $0.01 as a result of
      recognizing the share-based compensation expense, net of tax.





As
      of
      January 31, 2008, the total compensation cost related to unvested stock-based
      awards granted to employees under our stock option plans but not yet recognized
      was $517,184. The cost of each award will be amortized on a straight-line basis
      over its term, which range from two to four years, and will be adjusted for
      subsequent changes in estimated forfeitures.





On
      November 10, 2005, the FASB issued Staff Position No. SFAS 123(R)-3, *Transition
      Election Related to Accounting for Tax Effects of*  *Share-Based
      Payment Awards.* We have
      elected to adopt the alternative transition method provided in this FASB Staff
      Position for calculating the tax effects of share-based compensation pursuant
      to
      SFAS No. 123(R). The alternative transition method includes a simplified method
      to establish the beginning balance of the additional paid-in capital pool
      related to the tax effects of employee share-based compensation, which is
      available to absorb tax deficiencies recognized subsequent to the adoption
      of
      SFAS No. 123(R).




-8-
 *Table
          of Contents*





Under
      SFAS No. 123(R) stock-based compensation cost is measured at the grant date,
      based on the estimated fair value of the award, and is recognized over the
      stated vesting period. We continue to utilize the Black-Scholes option-pricing
      model to estimate the fair value of employee stock-based compensation at the
      date of grant, which requires the use of accounting judgment and financial
      estimates. The expected life of the options used in this calculation is the
      period of time the options are expected to be outstanding, and is determined
      by
      the simplified method outlined in Staff Accounting Bulletin 107 which states,
      “The midpoint of the average vesting period and contractual life is an
      acceptable expected life assumption.” Expected stock volatility is based on the
      historic volatility of the stock for a period equal to the length of time we
      have been public. Expected option exercises, the period of time the options
      are
      held, forfeitures, employee terminations and other criteria are based on
      previous experiences. The risk-free rates for periods within the contractual
      life of the options are based on United States Treasury Note rates in effect
      at
      the time of the grant for the period equal to the expected life. Application
      of
      alternative assumptions could produce significantly different estimates of
      the
      fair value of stock-based compensation and consequently, the related amounts
      recognized in the Condensed Consolidated Statements of Income.





There
      were no options granted during the three months ended January 31, 2008. For
      the
      three months ended January 31, 2007, we granted 100,000 options.





**RECENT
      ACCOUNTING PRONOUNCEMENTS**





In
      February 2007, the FASB issued SFAS No. 159, *Fair
      Value Option for Financial Assets and Financial Liabilities* (“SFAS
      159”). SFAS 159 permits companies to elect to measure eligible financial
      instruments, commitments and certain arrangements at fair value at specified
      election dates, with changes in fair value recognized in earnings at each
      subsequent reporting period. SFAS 159 is effective for fiscal years beginning
      after November 15, 2007. We are assessing the potential impact of SFAS 159
      on
      our financial position, results of operation, and cash flow.





In
      December 2007, the FASB issued SFAS No. 141(R), *Business
      Combinations* ,
      and
      SFAS No. 160, *Accounting
      and Reporting of Non-Controlling Interest in Consolidated Financial Statements,
      an Amendment of ARB No. 51* (SFAS
      No. 160). These new standards will significantly change the financial
      accounting and reporting of business combination transactions and
      non-controlling (or minority) interests in consolidated financial statements.
      We
      will be required to adopt SFAS No.141(R) and SFAS No. 160 on or after
      December 15, 2008. We have not yet determined the effect, if any, that the
      adoption of SFAS 141(R) and SFAS No. 160 will have on our consolidated financial
      statements.





In
      December 2007, the Securities and Exchange Commission issued Staff Accounting
      Bulletin No. 110 (“SAB 110”) to permit entities, under certain circumstances to
      continue to use the “simplified” method, in developing estimates of expected
      term of “plain-vanilla” share options in accordance with Statement No. 123R
      Share-Based Payment. SAB110 amended SAB 107 to permit the use of the
“simplified” method beyond December 31, 2007. We believe that the adoption of
      SAB 110 will not have a material impact on our consolidated financial
      statements.




**3.
      INVESTMENTS**





Investments
      at January 31, 2008, consisted of $3.9 million of principal invested in Auction
      Rate Securities (ARS) and $0.5 million in short-term investments. The ARS held
      by us are private placement securities with long-term nominal maturities for
      which the interest rates are reset through a Dutch auction each month. The
      monthly auctions historically have provided a liquid market for these
      securities. Our investments in ARS represent interests in collateralized debt
      obligations supported by pools of residential and commercial mortgages or credit
      cards, insurance securitizations and other structured credits, including
      corporate bonds. Some of the underlying collateral for the ARS held by us
      consists of sub-prime mortgages.





Consistent
      with our investment policy guidelines, the ARS investments held by us all had
      AAA/Aaa credit ratings at the time of purchase. With the liquidity issues
      experienced in global credit and capital markets, the ARS held by us at January
      31, 2008 have experienced multiple failed auctions as the amount of securities
      submitted for sale has exceeded the amount of purchase orders. In addition,
      in
      the first quarter of 2008, investments in ARS held by us were downgraded and
      others were placed on credit watch. All of these securities retained at least
      an
      Aa3 rating as of January 31, 2008.





The
      estimated market value of our ARS holdings at January 31, 2008 was $3.2 million,
      which reflects a approximate adjustment of $691,000 to the principal value
      of
      $3.9 million. Although the ARS continue to pay interest according to their
      stated terms, based on valuation models and an analysis of other-than-temporary
      impairment factors we have recorded a pre-tax impairment charge of approximately
      $691,000 in the first quarter of 2008, reflecting the portion of ARS holdings
      that we have concluded have an other-than-temporary decline in
      value.





ARS
      were
      classified in prior periods as current assets under marketable securities.
      Given
      the failed auctions, our ARS are illiquid until there is a successful auction
      for them. Accordingly, the entire amount of such remaining ARS has been
      reclassified from short-term investments to non-current
      investments.





**4.
      ACQUISITION**





**** On March
      28, 2007, we acquired essentially all of the assets of Summit Amusement &
Distributing, Ltd. (Summit) for $41.7 million in cash. Summit is a leading
      developer and manufacturer of entertainment driven gaming devices, including
      primarily video lottery terminal equipment and related software, headquartered
      in Billings, Montana.




-9-
 *Table
          of Contents*





Under
      the
      purchase method of accounting, the total purchase price is allocated to Summit’s
      tangible and intangible assets based on their fair values as of the date of
      the
      closing of the acquisition. The preliminary estimated purchase price has been
      allocated based on the preliminary estimates that are described
      below.




The
      preliminary estimated total purchase price is as follows (in
      thousands):




Cash
                paid for Summit
            
            $
            39,745Estimated
                direct transaction costs
            
            
            1,954Total
                preliminary purchase price
            
            $
            41,699





The
      allocation of the preliminary purchase price and estimated useful lives and
      first year amortization associated with certain assets is as follows (in
      thousands):




Accounts
                receivable
            
            $
            2,645Prepaid
                expenses and other assets
            
            
            211Inventory
            
            
            3,312Property
                plant and equipment
            
            
            1,598Identifiable
                depreciable intangibles assets
            
            
            7,720Trade
                name
            
            
            1,600Goodwill
            
            
            25,735Accounts
                payable and other accrued expenses
            
            
            (1,122
            )Total
                cash purchase price
            
            $
            41,699




·
            Includes
                the excess of the purchase price over the estimated fair value of
                assets
                and liabilities assumed.




Unaudited
      pro forma results of operations, assuming the acquisition of Summit had been
      completed at the beginning of each period are summarized below. The results
      reflect adjustments to amortization, interest expense, and income tax expense.
      The interest rates used in determining the pro forma adjustments are related
      to
      the credit facility and approximate a blended average rate of 9.54% for the
      three months ended January 31, 2008. The pro forma adjustment for the income
      tax
      expense is based on our effective rate of 40%. The pro forma earnings per share
      are based on the Company’s shares outstanding, as no shares were issued for the
      acquisition.




**For
                the Three Months Ended****January
                31, 2008**
            
            **January
                31, 2007****(In
                Thousands, Except For**
              **Per****Share
                Amounts)**Net
                sales
            
            $
            15,184
            
            $
            17,241Net
                earnings
            
            $
            331
            
            $
            (158
            )Basic
                earnings per share
            
            $
            0.03
            
            $
            (0.01
            )Diluted
                earnings per share
            
            $
            0.03
            
            $
            (0.01
            )




In
      the
      above acquisition, we acquired various intangible assets listed
      below:




**Acquired
      Intangible Assets** (in
      thousands)




**January
                31, 2008****Fair
                Market**
              **Value**
            
            **Estimated**
              **Lives**
            
            **Accumulated**
              **Amortization**
            
            **Net
                Fair Market**
              **Value****Amortized
                Intangible Assets**Customer
                relationships
            
            $
            3,600
            
            
            5
                years
            
            $
            600
            
            $
            3,000Patent
                application
            
            
            520
            
            
            10
                years
            
            
            43
            
            
            477Game
                library
            
            
            3,600
            
            
            10
                years
            
            
            300
            
            
            3,300Total
                amortizable intangible assets
            
            $
            7,720
            
            
            
            
            $
            943
            
            $
            6,777**Unamortized
                Intangible Assets**Goodwill
            
            $
            25,735Summit
                trade name
            
            
            1,600Total
            
            $
            27,335




-10-
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          of Contents*




Amortization
      expense related to the acquisition of Summit for the three months ended January
      31, 2008 was $283,000. Estimated future aggregate amortization expense for
      intangible assets associated with the Summit acquisition subject to amortization
      as of January 31, 2008 is as follows (in thousands):




2008
            
            $
            8492009
            
            
            1,1322010
            
            
            1,1322011
            
            
            1,1322012
            
            
            712After
                2012
            
            
            1,820$
            6,777





**5.
      NET INCOME PER SHARE**





Basic
      net
      income per share is computed by dividing reported net income by the weighted
      average number of common shares outstanding each period.





Diluted
      net income per share is computed by using the weighted average number of common
      shares and other common equivalent shares outstanding during each period.
      Diluted common shares are calculated in accordance with the treasury stock
      method, which treats the proceeds from the exercise of all warrants and options
      as if they were used to reacquire stock at market value.




(In
      thousands, except per share amounts)




**Three
                Months Ended**
              **January
                31,****2008**
            
            **2007**Net
                income, as reported
            
            $
            331
            
            $
            1,072Weighted
                average number of shares outstanding
            
            
            12,426
            
            
            12,614Incremental
                shares from the assumed exercise of dilutive stock options
            
            
            251
            
            
            647Dilutive
                weighted shares
            
            
            12,677
            
            
            13,261Net
                income per share:Basic
            
            $
            0.03
            
            $
            0.09Diluted
            
            $
            0.03
            
            $
            0.08





**6.
      TREASURY STOCK**





On
      September 4, 2007 the Board of Directors authorized expending up to $5.0 million
      in a share repurchase program. During the fiscal year ended October 31, 2007
      we
      advanced $500,000 to a member of our Board of Directors to repurchase stock
      on
      our behalf and accounted for this as a related party receivable for financial
      statement reporting purposes. During the quarter ended January 31, 2008 the
      director settled the receivable with repurchased common stock. As of January
      31,
      2008 we had acquired a total of 330,906 shares of our common stock at a cost
      of
      approximately $2.3 million (including the shares received from the related
      party) pursuant to our repurchase program.





**7.
      LEGAL PROCEEDINGS**





On
      March
      22, 2001, we filed GameTech International, Inc. v. Trend Gaming Systems, LLC,
      CIV 01-0540 PHX LOA, a claim in the United States District Court for the
      District of Arizona, seeking a declaratory judgment that we are not in material
      breach of our November 1, 1999 Distribution Agreement with Trend Gaming Systems,
      LLC (“Trend”), and seeking damages for past due payments and wrongful
      withholdings by Trend. Trend counterclaimed, alleging that its payments were
      in
      compliance with its contractual obligations. Trend also contended that we were
      in breach of certain of our contractual obligations to Trend, including that
      we
      had wrongfully terminated Trend. On December 16, 2002, the court entered at
      our
      request an order enjoining Trend from using approximately $540,000 in funds
      it
      had collected on our behalf, pending a trial on our ownership interest in those
      funds. The money was placed in two bank accounts/constructive trusts, subject
      to
      the court’s control. The sums in those accounts now total approximately
      $620,000. In addition, collections of accounts receivable by Trend, if any,
      are
      also being placed in that account, pending the resolution of the case. We have
      posted a $450,000 deposit with the court as a bond, which is presented as
      restricted cash on our condensed consolidated balance sheets. The accounts
      receivable from Trend were fully reserved. During the quarter ended January
      31,
      2008, we wrote off all receivables and related reserves. Trial in this matter
      commenced October 4, 2004. On November 1, 2004, the jury returned a verdict
      in favor of Trend against us in the amount of $3.5 million in compensatory
      damages. The jury also awarded us $735,000 in compensatory damages against
      Trend
      for funds Trend collected on our behalf but failed to remit to us. The court
      denied all of our post-trial motions, except that it maintained the injunction
      imposing a constructive trust, pending resolution of the issues on appeal.
      The
      court setoff the jury awards and entered an amended judgment for Trend on March
      12, 2005, in the amount of $2.8 million, plus interest on that sum at the rate
      of 3.31% per annum beginning March 30, 2005.





We
      appealed to the United States Court of Appeals for the Ninth Circuit on April
      8,
      2005. We posted a supersedeas bond on April 8, 2005, in the court-appointed
      amount of $3.4 million, which bond stays any action by Trend to collect on
      the
      judgment, pending appeal. Trend initially sought an award of $810,000 in legal
      fees and $26,000 in expenses and costs. In an amended request, Trend sought
      an
      award of $1.4 million in legal fees and $61,000 in expenses and costs. The
      court
      awarded Trend $909,000 in legal fees, expenses and costs plus interest of 3.77%
      per annum beginning August 5, 2005. We appealed the fee award to the United
      States Court of Appeals for the Ninth Circuit on August 5, 2005. We posted
      an
      additional supersedeas bond with the court on August 18, 2005 in the amount
      of
      $1.1 million, thereby staying any action by Trend to collect the fees, pending
      appeal. Any cash used in the collateralization of the bonds was accounted for
      as
      restricted short-term investments on our consolidated balance sheets. On April
      19, 2007 a three-judge panel of the United States Court of Appeals for the
      Ninth
      Circuit heard oral arguments for the appeal.




-11-
 *Table
          of Contents*





On
      May
      16, 2007, the United States Court of Appeals for the Ninth Circuit issued its
      ruling in our favor upholding each of the items we appealed, reversing the
      trial
      court’s rulings and remanding the matter back to the trial court for a new
      trial. Currently, there is no set date as to when the matter will be returned
      to
      the control of the lower court. Additionally, as a result of this decision,
      the
      supersedeas bonds we posted prior to filing the appeal were released by the
      lower court as of August 18, 2007. Upon receipt of the released supersedeas
      bonds from the court we terminated the supporting insurance polices and had
      the
      letters of credit released giving us access to the certificates of deposit
      which
      had served as the cash security for the supersedeas bonds.





For
      the
      year ended October 31, 2004, we recorded an estimated loss contingency in the
      Trend litigation of $2.8 million, which was estimated based on the amounts
      of
      the judgment described above. We recorded an additional loss contingency of
      $0.9
      million in the third quarter of fiscal 2005 to account for the increased total
      award to Trend for legal fees and expenses and costs. In addition we have
      recorded a loss of $313,000 through October 31, 2007 for the interest accrued
      on
      the Trend judgment. With the United States Court of Appeals for the Ninth
      Circuit ruling upholding each of the items we appealed, reversing the trial
      court’s rulings and remanding the matter back to the trial court for a new
      trial, we believe there is no further justification at this time for continuing
      to accrue loss contingencies.





On
      March
      2, 2004, a jury rendered a verdict in our favor and against Trend Gaming, LLC,
      a
      Kentucky LLC (“Trend Gaming”) (involving a prior distribution agreement in
      Virginia) awarding compensatory and punitive damages in the total amount of
      approximately $1.5 million. The jury also returned a verdict against Steven
      W.
      and Rhonda Hieronymus awarding compensatory and punitive damages of $1.0
      million. The court reduced compensatory damages against Trend Gaming to $1.1
      million. The court affirmed $150,000 in punitive damages against Trend Gaming
      and awarded us fees and costs of suit against Trend Gaming in the amount of
      $650,000. Compensatory damages against Mr. and Mrs. Hieronymus have been reduced
      to $762,000 but the punitive damage award against them in the amount of $150,000
      remains unchanged. Of the total compensatory damages of $1.1 million awarded
      to
      us, $762,000 represents compensation for lost profits. We can only collect
      such
      damages from one of the defendants to avoid a double recovery. Defendants
      appealed the judgment against them. On March 5, 2007, the Appellate Court
      entered its ruling affirming the judgment of the lower court in our favor.
      Defendants did not post a supersedeas bond, and we are therefore not precluded
      from pursuing collection on the judgment during the appeal. We have not recorded
      an estimated gain contingency, as we can give no assurances whether we will
      be
      able to collect any award from the defendants.





We
      are
      involved in various other legal proceedings arising in the ordinary course
      of
      our business. We do not believe that any of those proceedings will have a
      material adverse effect on our business, results of operations, or financial
      condition.




**8.
      CREDIT AGREEMENT**





On
      March
      28, 2007, we entered into a credit facility which consists of a term note for
      $30.0 million and a revolving line of credit in the amount of $10.0 million
      relating to the acquisition of Summit. The term note bears interest at the
      prime
      rate plus 1.75%, with a minimum annual rate of 9.75%. As of January 31, 2008
      the
      interest rate was 9.75% and the balance of the term note was $20.9 million.
      Interest payments are due monthly and beginning January 1, 2008, principal
      payments of $1.1 million are due quarterly with the remainder of $11.3 million
      due March 28, 2012. The revolving line of credit bears interest based on the
      prime rate plus 0.50%, with a minimum annual rate of 8.50%. As of January 31,
      2008 the interest rate was 8.50% and the outstanding balance of the revolver
      was
      $7.4 million. The revolving line of credit requires monthly payments of interest
      only and the outstanding balance is due on March 28, 2012. We can give no
      assurance that the revolving credit facility will be renewed. Our obligations
      under the agreement are secured by substantially all of our assets.





The
      credit facility provides for a prepayment premium of 1% in the first year and
      0.5% in the second year under specified circumstances. The credit facility
      provides for mandatory prepayments under specified circumstances, including
      a
      requirement to prepay an amount equal to 50% of Excess Cash Flow, as defined,
      if
      the ratio of Consolidated Funded Indebtedness to Consolidated EBITDA less
      Capital Expenditures, as defined, is greater than or equal to 2 to
      1.





The
      credit facility contains numerous affirmative and negative covenants, including
      restrictions on liens, limitations on indebtedness, prohibitions on fundamental
      changes, restrictions on investments, prohibition of dividends or redemptions
      and limitations on capital expenditures. We must maintain Qualified Cash, as
      defined, of at least $6.0 million. The credit facility also contains specified
      financial covenants, including a leverage ratio, fixed charge coverage ratio
      and
      a specific level of trailing twelve month earnings before income taxes,
      depreciation, and amortization (TTM EBITDA). Upon an event of default, the
      lenders under the credit facility can accelerate all obligations under the
      agreement and terminate the revolving credit commitment. As of January 31,
      2008
      we did not meet the TTM EBITDA covenant. As of March 11, 2008 we entered into
      Amendment Number Three to Financing Agreement that amends the TTM EBITDA and
      capital expenditure limits covenants of the credit facility, and we are now
      in
      compliance.





On
      March
      28, 2007, we terminated our prior revolving line-of-credit as part of the
      requirements of our new credit facility.




-12-
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          of Contents*





**9.
      INCOME TAXES**





We
      recorded our income tax provision at an effective rate of 36.1% and 37.7% for
      the three months ended January 31, 2008 and 2007, respectively. The actual
      effective tax rate is different from the expected federal rate of 34%,
      reflecting certain permanent differences between financial accounting and tax
      accounting, and state and foreign tax provisions.





In
      July 2006, the FASB issued FIN 48, *Accounting
      for Uncertainty in Income Taxes* ,
      an
      Interpretation of FASB Statement No. 109, which creates a single model to
      address uncertainty in income tax positions and prescribes the minimum
      recognition threshold a tax position is required to meet before being recognized
      in the financial statements. It also provides guidance on derecognition,
      measurement, classification, interest and penalties, accounting in interim
      periods, disclosure and transition. FIN 48 was effective for fiscal years
      beginning after December 15, 2006, and accordingly, the Company adopted FIN
      48 beginning on November 1, 2007. As a result of the implementation of FIN
      48,
      no material amounts were recognized.





We
      file
      numerous consolidated and separate income tax returns in the United States
      federal jurisdiction and in many state and foreign jurisdictions.  With few
      exceptions, we are no longer subject to United States federal income tax
      examinations for years before 2003 and are no longer subject to state and local,
      or foreign income tax examinations for years before 2002.




**10.
      BUSINESS SEGMENT INFORMATION**





During
      the fiscal quarter ended April 30, 2007, management reviewed our operating
      segments in accordance with SFAS 131, *Disclosure
      about Segments of an Enterprise and Related Information* .
      As a
      result of our acquisition of Summit in March 2007, management determined that
      a
      new operating segment was appropriate. The segment discussion outline below
      represents the adjusted segment structure as determined by management in
      accordance with SFAS 131.





Management
      has identified two operating segments. Each operating segment is considered
      a
      reporting segment which is described as follows: the design, development, and
      marketing of interactive electronic bingo systems consisting of portable and
      fixed-based systems and the manufacturing and sale of video lottery
      terminals.





The
      accounting policies of the reporting segments are the same as those described
      in
      the summary of significant accounting policies. We evaluate the performance
      of
      these segments based on many factors including sales, sales trends, margins,
      and
      operating performance.





Financial
      information for our reporting segments is as follows: (in
      thousands)




**Three
                Months
                Ended**
              **January
                31,****2008**
            
            **2007****Net
                Revenue**Bingo
                systems
            
            $
            11,068
            
            $
            12,016Video
                lottery terminal
            
            
            4,116
            
            
            -$
            15,184
            
            $
            12,016**Net
                Cost of Revenue**Bingo
                systems
            
            $
            4,691
            
            $
            4,922Video
                lottery terminal
            
            
            1,909
            
            
            -$
            6,600
            
            $
            4,922**Net
                Income**Bingo
                systems
            
            $
            281
            
            $
            1,072Video
                lottery terminal
            
            
            50
            
            
            -$
            331
            
            $
            1,072**Depreciation
                and Amortization**Bingo
                systems
            
            $
            2,371
            
            $
            2,676Video
                lottery terminal
            
            
            320
            
            
            -$
            2,691
            
            $
            2,676**Interest
                Expense**Bingo
                systems
            
            $
            10
            
            $
            48Video
                lottery terminal
            
            
            704
            
            
            -$
            714
            
            $
            48




-13-
 *Table
          of Contents*




**January
                31,**
              **2008**
            
            **October
                31,**
              **2007****Identifiable
                Assets**Bingo
                systems
            
            $
            79,922
            
            $
            83,131Video
                lottery terminal
            
            
            9,738
            
            
            10,751$
            89,660
            
            $
            93,882





**ITEM
      2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
      RESULTS****OF
      OPERATIONS**





The
      following discussion should be read in conjunction with our unaudited condensed
      consolidated financial statements and notes thereto included elsewhere in this
      report, as well as our audited consolidated financial statements for the fiscal
      year ended October 31, 2007 contained in our Annual Report on Form
      10-K.





This
      document includes various “forward-looking statements” within the meaning of
      Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
      Securities Exchange Act of 1934, as amended, which represent our expectations
      or
      beliefs concerning future events. Statements containing expressions such as
      “believes,” “anticipates,” or “expects,” used in our press releases and periodic
      reports on Forms 10-K and 10-Q filed with the SEC, are intended to identify
      forward-looking statements. All forward-looking statements involve risks and
      uncertainties. Although we believe our expectations are based upon reasonable
      assumptions within the bounds of our knowledge of our business and operations,
      there can be no assurances that actual results will not differ materially from
      expected results. We caution 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 include those discussed under the heading “Risk Factors” in our Annual
      Report on Form 10-K for the year ended October 31, 2007 and in this report.
      Readers are cautioned not to place undue reliance on forward-looking statements,
      which speak only as of the date thereof. We undertake no obligation to publicly
      release any revisions to such forward-looking statements to reflect events
      or
      circumstances after the date hereof.





**OVERVIEW**





We
      design, develop, and market several bingo systems and video lottery terminals
      (“VLT’s”). We entered into the VLT business in March 2007, with our acquisition
      of Summit Amusement and Distributing Ltd. (“Summit”) for $41.7 million in cash.
      For the three months ended January 31, 2008, video lottery terminal sales
      accounted for 27%, portable bingo systems accounted for 59%, and fixed-based
      bingo units accounted for 14% of our revenue. As of January 31, 2008, we had
      bingo systems in service in 38 states, one US territory, and four foreign
      countries and VLT sales in 15 states, one US territory, and several Native
      American locations. We are also developing and marketing server based wireless
      gaming systems on which users can play a range of games including bingo, video
      poker, keno and other slot machine games, and expect to install our first system
      in the second fiscal quarter of 2008.





We
      generate revenue by placing electronic bingo systems in bingo halls under
      contracts based on (1) a fixed fee per use per session; (2) a fixed
      weekly fee per terminal; or (3) a percentage of the revenue generated by
      each terminal. Revenue growth for our bingo systems is affected by player
      acceptance of electronic bingo as an addition or an alternative to paper bingo,
      our ability to expand operations into new markets and our ability to increase
      our market share. Fixed-base bingo terminals generate greater revenue per
      terminal than portable bingo terminals, but also require a greater initial
      capital investment.





We
      typically install our electronic bingo systems at no charge to our customers,
      and we capitalize the costs. We record depreciation of bingo equipment over
      either a three or five-year estimated useful life using the straight-line method
      of depreciation.





Our
      VLT
      business generated revenue from sales of video lottery terminals (new and used),
      software conversions kits, content fees, license fees, participation fees,
      parts/equipment and service. For the three months ended January 31, 2008, 82.1%
      of our VLT business sales were derived from the sales of new and used equipment,
      conversion kits and parts/equipment. In some instances, we may choose to
      recognize recurring participation revenue in lieu of one-time machine sales.
      Revenue growth is driven by increasing market share in existing markets and
      expanding product placement into new markets.





Our
      bingo
      and VLT expenses consist primarily of (a) cost of revenue, consisting of
      expenses associated with technical and operational support of the bingo systems
      within bingo halls, depreciation and amortization of bingo terminals, cost
      of
      sales related to Summit equipment sold, the repair/refurbishment/disposal of
      bingo terminals and related support equipment, and excess of obsolescence
      allowance for bingo units; (b) general and administrative, consisting of
      activities associated with management of our company and related support, which
      includes finance and accounting, legal, compliance, information systems, human
      resources, and accounts receivable reserve; (c) sales and marketing, consisting
      primarily of commissions paid to distributors for promoting and supporting
      our
      products and internal sales force with a focus upon generating new customers
      and
      upgrades for existing customers; and (d) research and development, consisting
      of
      company-sponsored research and development activities to provide players with
      new or enhanced products on which to play electronic bingo or new games themes
      for our video lottery terminals.





Net
      income for the first quarter of fiscal 2008 was $0.3 million, compared with
      $1.1
      million for the same period in fiscal 2007. Net income for 2008 was adversely
      affected by a $0.7 million pre-tax ($0.5 million after tax) impairment charge
      related to our investments in auction rate securities, discussed in more detail
      in Note 3 to the financial statements included in this report. During the first
      quarter of 2008, we also incurred increased interest expense of $704,000 and
      increased amortization expense of $283,000 due to the acquisition of
      Summit.





-14-
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          of Contents*





On
      September 4, 2007 the Board of Directors authorized expending up to $5.0 million
      in a share repurchase program.  The shares are expected to be acquired
      through open market transactions by September 3, 2008.  The actual amount
      and timing of dollars expended and shares repurchased will be subject to
      business and market conditions and applicable SEC rules. As of January 31,
      2008,
      we had acquired a total of 330,906 shares at a cost of approximately $2.3
      million pursuant to this program





On
      March
      11, 2008, we entered into Amendment Number Three to Financing Agreement amending
      our credit facility agreement because our TTM EBITDA did not meet the
      requirements of the agreement. The Amendment Number Three to Financing
      Agreement:





·
            
            Reduced
                the TTM EBITDA from $22 million to $20 million for the quarters ending
                January 31, 2008 and April 30, 2008.·
            
            Reduced
                the TTM EBITDA from $22 million to $21 million for the quarter ending
                July
                31, 2008.·
            
            Reduced
                the capital expenditure limit from $14 million to $12 million for
                the
                fiscal year ending October 31, 2008.




**APPLICATION
      OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES**





Management’s
      Discussion and Analysis of Financial Condition and Results of Operations
      discusses our condensed consolidated financial statements, which have been
      prepared in accordance with U.S. generally accepted accounting principles.
      The
      preparation of these financial statements requires us to make estimates and
      assumptions that affect the reported amounts of assets and liabilities and
      the
      disclosure of contingent assets and liabilities at the balance sheet dates
      and
      reported amounts of revenue and expenses during the reporting period. On an
      ongoing basis, we evaluate our estimates and judgments, including those related
      to revenue recognition, bad debts, bingo terminal depreciation, goodwill
      impairment, obsolescence, and contingencies and litigation. We base our
      estimates and judgments on historical experience and on various other factors
      that we believe are reasonable under the circumstances, the results of which
      form the basis for making judgments about the carrying values of assets and
      liabilities that are not readily apparent from other sources. Actual results
      may
      differ from these estimates under different assumptions or
      conditions.





Our
      critical accounting policies are those that are both important to the portrayal
      of our financial condition and results of operations and require management’s
      most difficult, subjective and complex judgment. These critical accounting
      policies are discussed in “Management’s Discussion and Analysis of Financial
      Condition and Results of Operations” in our 2007 Form 10-K and Form 10-K/A.
      There have been no changes to our critical accounting policies since the filing
      of our 2007 Form 10-K and Form 10-K/A.





**RESULTS
      OF OPERATIONS**





***Three
      Months Ended January 31, 2008 compared to Three Months Ended January 31,
      2007***




The
      following table sets forth certain selected unaudited condensed consolidated
      financial data for the periods indicated :




**Three
                Months Ended January 31,**
              **(in
                thousands)****Including**
              **Summit**
            
            **Excluding**
              **Summit**
            
            **%
                Change**
              **Favorable/****2008**
            
            **2008**
            
            **2007**
            
            **(Unfavorable)**Net
                revenue
            
            $
            15,184
            
            $
            11,068
            
            $
            12,016
            
            
            (7.9
            )%Cost
                of revenue
            
            
            6,600
            
            
            4,691
            
            
            4,922
            
            
            4.7
            %Gross
                profit
            
            
            8,584
            
            
            6,377
            
            
            7,094
            
            
            (10.1
            )%Operating
                expenses:General
                and administrative
            
            
            2,758
            
            
            1,867
            
            
            1,972
            
            
            5.3
            %Sales
                and marketing
            
            
            2,537
            
            
            2,408
            
            
            2,908
            
            
            17.2
            %Research
                and development
            
            
            1,489
            
            
            1,052
            
            
            602
            
            
            (74.8
            )%Loss
                contingencies
            
            
            -
            
            
            -
            
            
            46
            
            
            0.0
            %Total
                operating expenses
            
            
            6,784
            
            
            5,327
            
            
            5,528
            
            
            3.6
            %Income
                from operations
            
            
            1,800
            
            
            1,050
            
            
            1,566
            
            
            (33.0
            )%Interest
                expense
            
            
            (714
            )
            
            (10
            )
            
            -
            
            
            0.0
            %Impairment
                of investments
            
            
            (691
            )
            
            (691
            )
            
            -
            
            
            0.0
            %Other
                income, net
            
            
            123
            
            
            108
            
            
            155
            
            
            (30.3
            )%Income
                before income taxes
            
            
            518
            
            
            457
            
            
            1,721
            
            
            (73.5
            )%Provision
                for income taxes
            
            
            187
            
            
            176
            
            
            649
            
            
            72.9
            %Net
                income
            
            $
            331
            
            $
            281
            
            $
            1,072
            
            
            (73.8
            )%




-15-
 *Table
          of Contents*




We
      acquired substantially all of the assets of Summit on March 28, 2007. The net
      revenues and net income from operations for Summit in the three months ended
      January 31, 2008 were $4.1 million and $50,000, respectively. The following
      discussion of the results of operations excludes the results of Summit except
      as
      otherwise indicated.





***Net
      Revenue***





Net
      revenue for the first quarter of 2008 decreased 7.9% to $11.1 million from
      $12.0
      million in the comparable quarter in 2007. The decrease in net revenue for
      the
      quarter is a result of several factors. Bingo net revenue decreased $0.9 million
      for the quarter, driven by increased regional competition and pricing pressures
      as well as continued migration of commercial accounts to more profitable slot
      machine style gaming over bingo. However, offsetting the decline in revenue
      was
      an increase of approximately $255,000 in revenue in various key states,
      increased expansion in the United Kingdom, as well as the continued popularity
      and rollout of our Traveler and Tracker terminals. Including the results of
      Summit, our reported net revenues for the first quarter of 2008 increased $3.2
      million from the first quarter of 2007. Our Summit division’s results for the
      quarter were impacted by some softness in the Montana market as well as fewer
      than expected shipments to the Louisiana market. With over 80% of Summit’s sales
      coming from the Montana and Louisiana markets, financial results for this
      segment may continue to be volatile from quarter to quarter until we have
      broadened our revenue base by expanding into new markets.





***Cost
      of Revenue***





Total
      cost of revenue decreased 4.7% to $4.7 million, or 42.4% of net revenue in
      the
      first quarter of 2008, from $4.9 million, or 41.0% of net revenue, for the
      comparable quarter in 2007. Bingo equipment depreciation decreased by
      approximately $207,000 over the comparable quarter in 2007 primarily due to
      Travelers becoming fully depreciated. Including the results of Summit, our
      reported cost of revenue rose from $4.9 million in the first quarter of 2007
      to
      $6.6 million in the first quarter of 2008





***Gross
      Profit***




Gross
      profit decreased 10.1% to $6.4 million, or 57.6% of net revenue in the first
      quarter of 2008, from $7.1 million, or 59.0% of net revenue, for the comparable
      quarter in 2007. The decrease is due to the revenue decline resulting from
      the
      factors mentioned above. Including the results of Summit, our reported gross profit increased from $7.1
      million in the first quarter of 2007 (59.0% of net revenue) to $8.6 million
      for
      the first quarter of 2008 (56.5% of net revenue).




***Operating
      Expenses***





Total
      operating expenses decreased 3.6% to $5.3 million, or 48.1% of net revenue,
      in
      the first quarter of 2008, from $5.5 million, or 46.0% of net revenue, for
      the
      comparable quarter in 2007. Operating expenses include general and
      administrative, sales and marketing, including distributor commissions, research
      and development, and loss contingencies.





General
      and administrative costs decreased 5.3% to $1.9 million, or 16.9% of net
      revenue, in the first quarter of 2008, from $2.0 million, or 16.4% of net
      revenue, for the comparable quarter in 2007. The decrease was attributable
      to
      the allocation of expenses to Summit, personnel changes, and severances expensed
      in the first quarter of 2007, offset by an increase in accounting and legal
      fees, and equipment testing.





Sales
      and
      marketing expenses decreased 17.2% to $2.4 million, or 21.8% of net revenue,
      in
      the first quarter of 2008, from $2.9 million, or 24.2% of net revenue, for
      the
      comparable quarter in 2007. The decrease is primarily due to a decrease in
      distributor commissions as well as salary and other employee costs, along with
      a
      decrease in advertising fees for Canadian locations due to a legislative
      change.





Research
      and development expenses increased 74.8% to $1.1 million, or 9.5% of net
      revenue, in the first quarter of 2008, from $0.6 million, or 5.0% of net
      revenue, for the comparable quarter in 2007. The increase was primarily due
      to
      an increase in salary and other employee costs for additional employees and
      consulting, as well as an increase in project costs offset by a decrease in
      the
      depreciation of fixed assets.





Loss
      contingencies, representing interest accrued on a legal judgment, were not
      recorded in the first quarter of 2008, compared to $46,000, or 0.4% of net
      revenue, for the first quarter in 2007.





Including
      the results of Summit, our reported total operating expenses increased from
      $5.5
      million in the first quarter of 2007 to $6.8 million in the first quarter of
      2008.





***Interest
      Expense***





Our
      reported interest expense of $0.7 million for the first quarter of 2008 was
      due
      almost entirely to interest paid on our debt incurred to purchase
      Summit.




-16-
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          of Contents*




**LIQUIDITY
      AND CAPITAL RESOURCES**





We
      have
      funded our operations to date primarily through cash from operations and other
      capital sources. This capital is used for operations, research and development,
      and capital expenditures of bingo equipment and associated support equipment
      and
      software. As of January 31, 2008 and October 31, 2007, we had a working capital
      balance of $10.5 million and $14.0 million, respectively. As of January 31,
      2008, our principal sources of liquidity included cash and cash equivalents
      of
      $7.6 million and $0.5 million in short-term investments. Current liabilities
      include an accrued liability of $4.0 million in connection with a contingent
      litigation judgment.





The
      acquisition of Summit was financed primarily by a credit facility consisting
      of
      a term loan of $30.0 million and a revolving line of credit with a limit of
      $10.0 million. As of January 31, 2008, the interest rate on our term loan was
      9.75% and on our revolving credit facility was 8.50%. We incurred interest
      expense of approximately $703,500 for the three months ended January 31, 2008
      compared to minimal interest expense for the comparable period in 2007. The
      interest expense is primarily due as a result of the debt incurred in March
      2007
      to finance the Summit acquisition.





Operating
      activities provided $4.5 million of cash for the three-month period ended
      January 31, 2008 compared with $2.1 million for the three-month period ended
      January 31, 2007. The $4.5 million consisted primarily of our net income of
      $0.3
      million adjusted by $2.8 million from depreciation, amortization, obsolescence
      provisions, and loss on disposal of bingo terminals and related equipment
      provisions and $1.3 million provided by net changes in other operating assets
      and liabilities. Included in this change is a $0.7 million impairment of
      investments. For the three-month period ended January 31, 2007, the $2.1 million
      consisted primarily of our net income of $1.1 million adjusted by $2.6 million
      from depreciation, amortization, obsolescence provisions, and loss on disposal
      of bingo terminals and related equipment provisions and $1.6 million used by
      net
      changes in other operating assets and liabilities.





Investing
      activities provided approximately $2.4 million of cash in investing activities
      for the three-month period ended January 31, 2008 compared with using
      approximately $2.8 million of cash for the three-month period ended January
      31,
      2007. The $2.4 million included $1.1 million in capital expenditures for bingo
      terminals and associated support equipment. In addition, $3.5 million was
      received from the sale of short-term investments during the period ended January
      31, 2008. During the three-month period ending January 31, 2007, the $2.8
      million consisted of capital expenditures substantially all of which was
      expended on bingo terminals and associated support equipment.





Financing
      activities used approximately $2.9 million during the three-month period ended
      January 31, 2008 compared with providing $129,000 for the three-month period
      ended January 31, 2007. The $2.9 million included payments on long-term debt
      of
      approximately $1.1 million and the purchase of our common stock for
      approximately $1.8 million. The $129,000 provided for the three-month period
      ended January 31, 2007 was from proceeds of $120,000 from stock option exercises
      and $15,000 in tax benefits from stock options exercised and $6,000 on payments
      of long term debt.





Our
      credit facility agreement contains numerous restrictive covenants. These
      restrictions could result in a curtailment of our capital expenditures including
      those for bingo devices, and related equipment. In the event we were unable
      to
      raise additional capital if needed, further measures could be necessary,
      including the delay or reduction of our operations, research and development
      and
      other activities. Certain of such measures may require third-party consent
      or
      approvals, including the financial institution under the credit facility,
      certain regulatory bodies, and others, and there are no assurances such consent
      or approvals could be obtained. Amendment Three to the Financing Agreement
      limits our capital expenditures. Management does not believe that the limitation
      will adversely affect our ability to acquire the necessary devices and related
      equipment.





We
      believe that cash flows from operations and cash, cash equivalents, short-term
      investments and amounts available under our revolving credit facility will
      be
      sufficient to support our operations, provide for budgeted capital expenditures,
      and meet liquidity requirements through the remainder of fiscal 2008. Our
      long-term liquidity requirements will depend on many factors, including the
      rate
      at which we expand our business and whether we do so internally or through
      acquisitions. In addition, we may pursue strategic opportunities that could
      require us to fund our portion of operating expenses of such ventures and may
      require us to advance additional amounts should any partners in such ventures
      be
      unable to meet unanticipated capital requirements or similar funding events.
      To
      the extent that the funds generated from the sources described above are
      insufficient to fund our activities in the long term, we may be required to
      raise additional funds through public or private financing. No assurance can
      be
      given that the additional financing will be available or that, if it is
      available, it will be on terms acceptable to us.





On
      September 4, 2007 the Board of Directors authorized expending up to $5.0 million
      in a share repurchase program.  The shares are expected to be acquired
      through open market transactions by September 3, 2008.  The actual amount
      and timing of dollars expended and shares repurchased will be subject to
      business and market conditions and applicable SEC rules. As of January 31,
      2008,
      we had acquired a total of 330,906 shares at a cost of approximately $2.3
      million pursuant to this program.




**Purchase
      Commitments**





From
      time
      to time, we enter into commitments with our vendors to purchase VLT parts,
      bingo
      terminals and support equipment at fixed prices and/or guaranteed quantities.
      During the fiscal year ending October 31, 2007, we entered into various
      additional agreements for component parts for VLTs, Tracker and Traveler as
      well
      as component parts for the GameTech Mini TM. As of October 31, 2007,
      approximately $2.9 million of these commitments were outstanding. As of January
      31, 2008, approximately $2.8 million of these commitments were outstanding.
      All
      purchases are expected to occur by the end of the fiscal year.




**ITEM
      3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
      RISK**





**Market
      Risks**





We
      maintain an investment portfolio of approximately $3.9 million in investment
      grade corporate issues, and in investment grade auction rate securities. The
      values of these investments are subject to changes in interest rates. During
      the
      quarter ended January 31, 2008 we recorded an impairment of approximately $0.7
      million due to the devaluation of our auction rate securities. For additional
      information, see Note 3 to our financial statements included in this report.
      We
      monitor these investments for impairment and make appropriate reductions in
      carrying value when necessary.




-17-
 *Table
          of Contents*





There
      have been no material changes in market risk to our investment
      portfolio resulting from changes in interest rates from that disclosed in
      our Form 10-K and Form 10-K/A for the fiscal year ended October 31,
      2007.





On
      March
      28, 2007, we entered into a credit facility, which consists of a term note
      for
      $30 million and a revolving line of credit in the amount of $10 million relating
      to the acquisition of Summit. At January 31, 2008 the balances of the term
      note
      and revolving line of credit were $20.9 million and $7.4 million,
      respectively.





Because
      the interest rate on the credit facility is variable, our cash flow may be
      affected by increases in interest rates, in that we would be required to pay
      more interest in the event that interest rates increase. Assuming we had a
      $28.3
      million balance outstanding as of January 31, 2008, and the blended average
      rate
      of interest rate was 9.71%, our monthly interest payment, if the rate stayed
      constant, would be approximately $229,000. If the prime rate rose to 375 basis
      points to 12.0%, which assumes an unusually large increase, our monthly payment
      would be approximately $283,000. A more likely increase of 1.0% or 2.0%, given
      the recent trend of relatively low interest rates, would result in a monthly
      payment of approximately $253,000 or $276,000, respectively.





**ITEM
      4. CONTROLS AND PROCEDURES**





**Disclosure
      controls and procedures**





We
      maintain disclosure controls and procedures that are designed to ensure that
      information required to be disclosed in the reports we file or submit under
      the
      Securities Exchange Act of 1934 is recorded, processed, summarized and reported
      within the time periods specified in the SEC rules and forms, and that such
      information is accumulated and communicated to our management, including our
      Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as
      appropriate, to allow timely decisions regarding required
      disclosure.





As
      of the
      end of the period covered by this report, we carried out an evaluation under
      the
      supervision and with the participation of our management, including the CEO
      and
      CFO, of the effectiveness of the design and operation of our disclosure controls
      and procedures pursuant to Exchange Act Rule 13a-15(e). Based on this
      evaluation, the CEO and CFO concluded that our disclosure controls and
      procedures were effective as of the end of the period covered by this
      report.





**Changes
      in Internal Control over Financial Reporting**





Other
      than as disclosed directly below, there have been no changes in our internal
      control over financial reporting during the quarter ended January 31, 2008
      that
      have materially affected, or are reasonably likely to materially affect, our
      internal control over financial reporting.





In
      our
      Form 10-K for the fiscal year ended October 31, 2007, we previously reported
      a
      significant deficiency in our internal control process related to the revenue
      recognition procedures related to software contracts with multiple delivery
      elements.  As of January 31, 2008 we believe the significant deficiency was
      remediated but no testing has been performed. The
      testing will be performed prior to July 31, 2008.





**PART
      II. OTHER INFORMATION**




**ITEM
      1. LEGAL PROCEEDINGS.**





For
      a
      discussion of our current litigation, see Note 7 (Legal Proceedings) to our
      consolidated financial statements included herein.





We
      are
      involved in various other legal proceedings arising in the ordinary course
      of
      our business. We do not believe that any of those proceedings will have a
      material adverse effect on our business, results of operations, or financial
      condition.




**ITEM
      1A. RISK FACTORS**





***We
      may be adversely impacted by economic factors beyond our control and may incur
      additional impairment charges to our investment portfolio.***





As
      of
      January 31, 2008 we had $3.9 million of principal invested in Auction Rate
      Securities (“ARS”), representing interests in collateralized debt obligations
      supported by pools of residential and commercial mortgages or credit cards,
      insurance securitizations and other structured credits, including corporate
      bonds. Some of the underlying collateral for the ARS held by us consists of
      sub-prime mortgages. The estimated market value of our ARS holdings at January
      31, 2008 was $3.2 million, which reflects a $0.7 million adjustment to the
      principal value of $3.9 million.





Although
      the ARS continue to pay interest according to their stated terms, based on
      valuation models and an analysis of other-than-temporary impairment factors,
      we
      have recorded an impairment charge of approximately $0.7 million in the first
      quarter, reflecting the portion of ARS holdings that we have concluded have
      an
      other-than-temporary decline in value.




-18-
 *Table
          of Contents*





The
      credit and capital markets could continue to deteriorate in 2008. If
      uncertainties in these markets continue, these markets deteriorate further
      or we
      experience any additional rating downgrades on any investments in our portfolio
      (including on ARS), we may incur additional impairments to our investment
      portfolio, which could negatively affect our financial condition, cash flow
      and
      reported earnings.




**ITEM
      2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
      PROCEEDS**




**Issuer
      Purchases Of Equity Securities**





The
      following table provides information regarding repurchases of our common stock
      made by or on behalf of us, or any “affiliated purchaser” as defined in SEC
      rules, of our equity securities registered pursuant to Section 12 of the
      Exchange Act, for each month during the first quarter of fiscal year 2008,
      in
      the format required by SEC rules:




Total
                Number
              of
              Shares
                Purchased
            
            Average
                Price Paid per Share
            
            Total
                Number of Shares Purchased as Part of Publicly Announced Plans or
                Programs (1)
            
            Maximum
                Dollar Amount of Shares (in thousands) That May Yet Be Purchased
                Under the
                Plans or Programs (1)November
                1, 2007 - November 30, 2007
            
            
            52,081
            
            $
            7.59
            
            
            52,081
            
            $
            4,240December 1,
                2007 - December 31, 2007
            
            
            179,000
            
            
            6.93
            
            
            179,000
            
            
            3,000January
                1, 2008 - January 31, 2008
            
            
            49,000
            
            
            6.41
            
            
            49,000
            
            
            2,686Total
                repurchased for the quarter
            
            
            280,081
            
            $
            6.96
            
            
            280,081
            
            $
            2,686Total
                for the repurchase plan
            
            
            330,906
            
            $
            6.99
            
            
            330,906
            
            $
            2,686




(1)
            
            On
                September 4, 2007 the Board of Directors authorized expending up
                to $5.0
                million in a share repurchase program. The shares reported in the
                table
                were acquired in open market transactions pursuant to this program.
                Approximately $2.7 million remains available for repurchase of our
                common
                stock related to this program, which expires September 3,
                2008.





**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**





2.1
            
            Asset
                Purchase Agreement dated August 30, 2006 between GameTech International,
                Inc. and Summit Amusement & Distributing Ltd. (1)3.1
            
            Certificate
                of Incorporation of the Registrant, as amended (2)3.3
            
            Certificate
                of Designation of Series A Junior Participating Preferred Stock of
                the
                Registrant (3)3.4
            
            Second
                Amended and Restated Bylaws of the Registrant (4)4.1
            
            GameTech
                International, Inc. Registration Rights
                Agreement (5)4.3
            
            Rights
                Agreement, dated as of March 7, 2003, between GameTech International,
                Inc.
                and Mellon Investor Services, LLC, as rights agent (6)4.4
            
            Specimen
                Common Stock Certificate (7)10.1
            
            Amendment
                Number Three to Financing Agreement dated effective March 11, 2008
                (8)31.1
            
            Certification
                of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a)
                promulgated under the Securities Exchange Act of 1934, as
                amended.31.2
            
            Certification
                of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a)
                promulgated under the Securities Exchange Act of 1934, as
                amended.32.1
            
            Certification
                of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
                adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002.32.2
            
            Certification
                of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
                adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002.







(1)
            
            Incorporated
                by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K
                dated August 30, 2006 as filed with the Commission on or about August
                31,
                2006.




-19-
 *Table
          of Contents*




(2)
            
            Incorporated
                by reference to Exhibits 2.1 and 10.1 to the Registrant’s Registration
                Statement on Form S-1 (Registration No. 333-34967) as filed with
                the Commission on or about September 4, 1997.(3)
            
            Incorporated
                by reference to Exhibits 3.3 and 4.4 to the Registrant’s Quarterly Report
                on Form 10-Q for the quarterly period ended April 30, 2003 as filed
                with
                the Commission on or about March 17, 2003.(4)
            
            Incorporated
                by reference to Exhibit 3.4 to the Registrant’s Quarterly Report on Form
                10-Q for the quarterly period ended April 30, 2004, as filed with
                the
                Commission on or about March 16, 2004; Commission file No.
                000-23401(5)
            
            Incorporated
                by reference to Exhibit 4.1 to Amendment No. 1 to the Registrant’s
                Registration Statement on Form S-1 (Registration No. 333-34967)
                as filed with the Commission on or about October 17,
                1997.(6)
            
            Incorporated
                by reference to Exhibit 4.3 to the Registrant’s Current Report on Form 8-K
                dated March 7, 2003 as filed with the Commission on or about March
                10,
                2003; Commission file No. 000-23401(7)
            
            Incorporated
                by reference to Exhibits 3.3 and 4.4 to the Registrant’s Quarterly Report
                on Form 10-Q for the quarterly period ended April 30, 2003 as filed
                with
                the Commission on or about March 17, 2003; Commission file No.
                000-23401(8)
            
            Incorporated
                by reference to Exhibit 99.1 to the Registrant’s Current Report on Form
                8-K dated March 11, 2008 as filed with the commission on or about
                March
                11, 2008.




-20-
 *Table
          of Contents*




**SIGNATURES**





Pursuant
      to the requirements of the Securities Exchange Act of 1934, the registrant
      has
      duly caused this report to be signed on its behalf by the undersigned, thereunto
      duly authorized.




**Signature**
            
            **Title**
            
            **Date**/S/
                Jay M. Meilstrup
            
            Chief
                Executive Officer and PresidentJay
                M. Meilstrup
            
            (Principal
                Executive Officer)
            
            March
                11, 2008/S/
                Donald Tateishi
            
            Chief
                Financial Officer
            
            March
                11, 2008Donald
                Tateishi
            
            (Principal
                Financial Officer)




-21-
 *Table
          of Contents*




**EXHIBIT
      INDEX**




2.1
            
            Asset
                Purchase Agreement dated August 30, 2006 between GameTech International,
                Inc. and Summit Amusement & Distributing Ltd. (1)3.1
            
            Certificate
                of Incorporation of the Registrant, as amended (2)3.3
            
            Certificate
                of Designation of Series A Junior Participating Preferred Stock of
                the
                Registrant (3)3.4
            
            Second
                Amended and Restated Bylaws of the Registrant (4)4.1
            
            GameTech
                International, Inc. Registration Rights
                Agreement (5)4.3
            
            Rights
                Agreement, dated as of March 7, 2003, between GameTech International,
                Inc.
                and Mellon Investor Services, LLC, as rights agent (6)4.4
            
            Specimen
                Common Stock Certificate (7)10.1
            
            Amendment
                Number Three to Financing Agreement dated effective March 11, 2008
                (8)31.1
            
            Certification
                of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a)
                promulgated under the Securities Exchange Act of 1934, as
                amended.31.2
            
            Certification
                of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a)
                promulgated under the Securities Exchange Act of 1934, as
                amended.32.1
            
            Certification
                of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
                adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002.32.2
            
            Certification
                of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
                adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002.




(1)
            
            Incorporated
                by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K
                dated August 30, 2006 as filed with the Commission on or about August
                31,
                2006.(2)
            
            Incorporated
                by reference to Exhibits 2.1 and 10.1 to the Registrant’s Registration
                Statement on Form S-1 (Registration No. 333-34967) as filed with
                the Commission on or about September 4, 1997.(3)
            
            Incorporated
                by reference to Exhibits 3.3 and 4.4 to the Registrant’s Quarterly Report
                on Form 10-Q for the quarterly period ended April 30, 2003 as filed
                with
                the Commission on or about March 17, 2003.(4)
            
            Incorporated
                by reference to Exhibit 3.4 to the Registrant’s Quarterly Report on Form
                10-Q for the quarterly period ended April 30, 2004, as filed with
                the
                Commission on or about March 16, 2004; Commission file No.
                000-23401.(5)
            
            Incorporated
                by reference to Exhibit 4.1 to Amendment No. 1 to the Registrant’s
                Registration Statement on Form S-1 (Registration No. 333-34967)
                as filed with the Commission on or about October 17,
                1997.(6)
            
            Incorporated
                by reference to Exhibit 4.3 to the Registrant’s Current Report on Form 8-K
                dated March 7, 2003 as filed with the Commission on or about March
                10,
                2003; Commission file No. 000-23401.(7)
            
            Incorporated
                by reference to Exhibits 3.3 and 4.4 to the Registrant’s Quarterly Report
                on Form 10-Q for the quarterly period ended April 30, 2003 as filed
                with
                the Commission on or about March 17, 2003; Commission file No.
                000-23401.(8)
            
            Incorporated
                by reference to Exhibit 99.1 to the Registrant’s Current Report on Form
                8-K dated March 11, 2008 as filed with the commission on or about
                March
                11, 2008.




-22-