<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                              -------------------

                                    FORM 10-K

           [X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF

                       THE SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 1997

           [ ]  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 000-22298

                         SCIENTIFIC GAMES HOLDINGS CORP.

             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

            DELAWARE                                        13-3615274
(STATE OR OTHER JURISDICTION OF                           (I.R.S. EMPLOYER
 INCORPORATION OR ORGANIZATION)                          IDENTIFICATION NO.)

             1500 BLUEGRASS LAKES PARKWAY, ALPHARETTA, GEORGIA 30004
               (ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) (ZIP CODE)

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (770) 664-3700

           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

     TITLE OF EACH CLASS               NAME OF EACH EXCHANGE ON WHICH REGISTERED
Common Stock, $.001 Par Value                    New York Stock Exchange

        SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE

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

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

         The aggregate market value of the Common Stock of the Registrant held
by non affiliates of the Registrant on March 23, 1998 was $233,038,061. For the
purposes of this response, executive officers and directors are deemed to be
affiliates of the Registrant and the holding by non affiliates was computed as
11,472,643 shares.

         The number of shares outstanding of the Registrant's Common Stock as of
March 23, 1998 was 12,105,814 shares.

DOCUMENTS INCORPORATED BY REFERENCE:

         The Registrant's proxy statement for its Annual Meeting of
Stockholders, to be held May 22, 1998, which will be filed pursuant to
Regulation 14A within 120 days of the close of Registrant's fiscal year, is
incorporated by reference in answer to Part III of this report but only to the
extent indicated in Part III herein. In addition, pages 14 through 35 of
Scientific Games Holdings Corp.'s 1997 Annual Report to Stockholders are
incorporated by reference in answer to Items 6, 7 and 8 of Part II and Item
14(a) of Part IV of this report.


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                                     PART 1

ITEM 1.           BUSINESS

GENERAL

         Scientific Games Holdings Corp. (the "Company" or "Scientific Games")
through its wholly owned subsidiaries, principally, Scientific Games Inc.
("SGI"), Scientific Games International, Limited ("SGIL") and Scientific Games
Kommunikations - und Computersysteme A.G. ("SG Austria"), is the leading
worldwide manufacturer of instant lottery tickets based upon the number of
instant lottery tickets sold. Except as the context otherwise requires,
references to "Scientific Games" or the "Company" refer to the consolidated
business and operations. The Company's corporate headquarters and its primary
manufacturing facility are located in Alpharetta, Georgia (suburban Atlanta) and
the Company employs approximately 1,177 people. The Company also has production
and operating facilities in California, the United Kingdom, South Africa and
software development facilities in Georgia and Austria. Scientific Games'
business consists primarily of manufacturing and selling instant lottery tickets
to domestic and foreign governmental lottery authorities and licensees and
providing lottery services to such customers. The Company also offers its
customers a full range of instant lottery services under cooperative services
contracts, including some or all of the following services: designing and
installing game management software, ticket production, telemarketing, field
sales, accounting, ticket distribution, training sales staff, estimating ticket
needs, managing staff, advising with respect to security, ticket validation and
fulfillment, provision of computer hardware, validation terminals, SciScan
Technology(R) validators, maintenance, prize structure, communication network
and sales agent hot-line service. Scientific Games' acquisition in April 1997 of
Vienna, Austria based TeleControl Kommunications - und Computersysteme
Gesellschaft m.b.h. ("TeleControl"), an on-line lottery and transaction
processing company, enables the Company to expand the Company's systems
offerings and make available on-line lottery technology. The Company announced
in February 1998 that it had entered into a joint venture agreement with La
Francaise des Jeux, the operator of the French National Lottery, to develop a
new generation of on-line terminals incorporating the Company's SciScan
Technology. The agreement also provides for the assumption by the joint venture
of La Francaise des Jeux's terminal and software maintenance contracts with six
German State Lottery customers. The joint venture is subject to the approval of
the French Minister of Finance and the execution of definitive agreements for
products and services.


INDUSTRY OVERVIEW

         Lotteries are operated by domestic and foreign governmental authorities
and their licensees in approximately 200 jurisdictions throughout the world.
Currently, 39 jurisdictions in the United States sell instant lottery tickets.
Of the approximately 8.8 billion tickets sold by the Company in 1997,
approximately 30% were sold outside the United States. Governments typically
authorize lotteries as a means of generating revenues without the imposition of
additional taxes. Lottery revenues are frequently set aside for particular
public purposes, such as education, aid to the elderly, conservation,
transportation and economic development. As lottery ticket sales have become a
significant source of funding for such programs, many jurisdictions have come to
rely on the revenues generated by such sales.

         Although there are many types of lotteries worldwide, government
authorized lotteries may generally be categorized into three principal groups:
instant lotteries, on-line lotteries and the traditional draw-type lotteries. An
instant lottery is one which is typically played by removing a coating from a
preprinted ticket to determine whether it is a winner. On-line lotteries are
generally pari-mutuel in nature (although fixed prizes are also offered) and are
conducted through a computerized lottery system in which lottery terminals are
connected to a central computer, usually by dedicated telephone lines.
Internationally, the older form of traditional draw-type lottery games, in which
players purchase tickets which are manually processed for a future drawing for
prizes of a fixed amount, is the prevalent form of play. In addition to the
foregoing types of lotteries, there are video lotteries played on electronic
machines featuring keno, "line-up" (cherries, bars, plums, etc.) and similar
video games. Video lotteries are typically targeted to locations such as horse
and dog racing tracks, athletic arenas, certain bars, clubs and similar
establishments.

         There are many promotional (i.e., commercial) game suppliers (including
the Company) which produce instant tickets for both sales promotion companies
and their end users. Management believes Scientific Games is the


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only company which also offers the promotional market a full line of support and
services similar to those which the Company offers to the government lottery
market. While potential lottery customers in the United States currently are
limited to the 39 jurisdictions where such games are legally permitted,
promotional games are believed permitted in substantially all states. A
significant difference between lottery games and promotional games is the lower
level of security requirements associated with promotional games which typically
offer less valuable prizes. The Company's promotional game business expanded
significantly with the 1996 acquisition of its SGIL subsidiary see - "Products
and Services" below.


BUSINESS STRATEGY

         The Company is a leading provider of instant lottery tickets,
integrated systems and support services worldwide. Scientific Games intends to
expand this leadership position by (i) pursuing new instant ticket printing
opportunities in both the domestic and foreign marketplaces, (ii) emphasizing
and marketing Scientific Games' expertise in cooperative services capabilities,
(iii) growing its on-line lottery business by utilizing its SGI-NET(TM)
technology, the core of which was acquired through its 1997 acquisition of SG
Austria, (iv) continuing the Company's emphasis on customer service and
responsiveness to customer needs both before and after delivery of products and
services, (v) investing in its facilities while aggressively pursuing practices
and methods which reduce operating costs, (vi) funding research and development
costs that continue to provide innovations for the Company's customers such as
SGI-NET, a high performance, configurable hardware and software-redundant
transaction processing system that can accommodate both instant an on-line
lottery operations, (vii) partnering with respected local corporations to
establish new lotteries in foreign countries and (viii) utilizing the joint
venture with La Francaise des Jeux to develop a new generation of lottery
terminals.

         As state governments face budgetary pressures, they increasingly seek
methods of reducing state spending. One method of reducing spending which is
often considered by states is privatization or outsourcing of various operating
tasks associated with lottery operations. The Company has cooperative services
contracts with eight domestic lotteries which have elected to privatize certain
operating functions related to the management of instant ticket games. It is
expected that more state or foreign governments will decide to privatize or
outsource various lottery operations. The Company has significant experience in
this field and is well positioned to offer this privatization or outsourcing
option to the industry. The Company intends to continue to emphasize and invest
in the growing cooperative services segment of its business.

         The increased application of computer-based and communications
technologies (including proprietary technologies) to the manufacturing and
servicing of instant tickets (See - "New Product Development") continues to
separate the instant ticket from conventional forms of printing. The Company is
generally recognized within the lottery industry as the leader in applying these
technologies to the manufacturing and sale of instant tickets. In order to
maintain its position as a leading innovator within the lottery industry, the
Company intends to continue to explore and develop new technologies and their
application to instant lottery tickets and systems.

         In addition to the internal development of new products, the Company
intends to leverage its management expertise, reputation, and contacts in the
lottery industry by pursuing joint ventures and marketing agreements which will
provide access to lottery customers to whom the Company does not currently
provide products or services.


PRODUCTS AND SERVICES

         In 1974, the Company introduced the first "secure" instant game ticket.
Today, instant tickets manufactured by the Company are typically printed on
recyclable ticket stock by a series of computer controlled presses and ink-jet
imagers and are believed by management to incorporate the most advanced
technology and security currently available in the industry. Instant tickets
range in size from 2 inches by 3 inches to ticket sizes as large as some
greeting cards; instant tickets are normally played by removing a coating to
determine if they are winning tickets. The Company markets instant tickets to
domestic lottery jurisdictions, foreign lottery jurisdictions and commercial
customers. The Company currently has contracts with 25 of the 39
states/jurisdictions in the U.S. which currently sell instant lottery tickets.
These domestic contracts are typically at a fixed price per thousand tickets and
typically range from one to five years in duration, although they usually have
one or more extension options. Customers of Scientific Games have exercised
extension options in domestic lottery contracts with the Company a majority of
the


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time. See - "Markets" for additional information. In 1997, the Company sold
approximately 8.8 billion tickets. Such instant ticket sales represented
approximately 60% of all instant lottery tickets sold by all companies to
domestic lotteries and approximately twice as many instant tickets as were sold
by the Company's next largest domestic competitor.

         The Company currently manufactures instant tickets for the promotional
game market. Examples of promotional games produced by the Company include games
for European newspapers, major food and beverage companies, telephone companies
and games for various other commercial customers. The majority of the Company's
promotional games are produced at its United Kingdom subsidiary SGIL.
Approximately 50% of SGIL's sales are to promotional game customers. Sales of
promotional game products and services accounted for less than 10% of the
Company's consolidated revenues in 1997.

         Scientific Games pioneered the idea of cooperative services as a means
of reducing the operating costs of lotteries while increasing lottery revenues
and is the only instant ticket manufacturer which has a separate lottery ticket
cooperative support services business to supplement its manufacturing
operations. Cooperative services consist of lottery ticket distribution and
support services involving the performing of selected key sales, distribution,
marketing and/or data processing services for lottery jurisdictions. While most
lottery jurisdictions to date have chosen to control the distribution and sales
of tickets, Scientific Games has been successful in demonstrating to a number of
jurisdictions that the Company can perform these functions effectively and at a
lower cost.

         Domestically, the Company had cooperative services agreements with the
states of Florida, Georgia, Maine, Nebraska, Pennsylvania and West Virginia
during 1997, which accounted for approximately 22.8% of the Company's total
revenues. Cooperative service agreements with the states of Delaware and
Kentucky will commence in 1998, increasing the number of the Company's
cooperative service customers to eight. Under cooperative services contracts,
the Company typically provides selected management, distribution services and/or
data processing for the jurisdiction's instant ticket lottery game business and
is paid a percentage of the lottery's total instant ticket revenues. Customers
select those services which they desire to privatize from a menu of services
offered, including: designing and installing game management software, instant
ticket production, telemarketing, field sales, accounting, instant ticket
distribution, sales staff training, estimating ticket needs, managing staff,
advising with respect to security, instant ticket validation, and provision of
computer hardware, validation terminals, SciScan Technology validation units,
maintenance, communication network and sales agent hot-line service. Replacement
of cooperative services agreements can be associated with large conversion costs
for the lottery, as the lottery would have to hire and/or retrain its staff and
redesign and install a software system to control the instant ticket lottery
business.

         In addition to laminated scratch off instant tickets, the Company's
business also includes the sale of pull-tab tickets to its lottery customers. In
October 1997, Scientific Games sold substantially all of the assets of its
pull-tab manufacturer subsidiary, GameTec Inc. to International Gamco, Inc.
("Gamco"). However, the Company will continue to sell pull-tab tickets to
lotteries in the U.S. through a marketing agreement with Gamco.

         Scientific Games and its partner TeleCom Productions, Inc. introduced
The Daily Race Game(TM) in January 1997. The Daily Race Game is a
player-selection game that combines on-line, virtual reality horse racing with a
popular "pick your numbers" format. Players chose three horses from a field of
12 in a 55-second animated horse race that can be shown on either commercial or
closed-circuit television.

         Another innovation announced by Scientific Games during 1997 was its
new probability-game ticket, Winner's Choice(TM). Winner's Choice is a
scratch-off instant ticket lottery game in which every ticket is a potential
winner (unlike existing tickets, where winning tickets are pre-determined before
a player scratches). Winner's Choice combines some of the best features of
instant and on-line games, and possesses three important player benefits -
choice, instant-win opportunities and appealing play styles. Probability games
have been discussed within the lottery industry for years, but have never been
viable because secure validation could not be assured. The Company's new SciScan
Technology provides secure validation to enable probability tickets to be sold.
Winner's Choice games are currently undergoing field testing in Maine conducted
by Scientific Games in cooperation with the Maine State Lottery.


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         As mentioned above, in April 1997, Scientific Games acquired
TeleControl, now known as SG Austria, whose systems enable the Company to
reenter the on-line lottery systems business. Scientific Games' predecessor
company had previously developed and operated on-line lottery systems from 1985
until 1991. During that period, Scientific Games supplied and operated on-line
lottery systems in Iowa, Maine, New Hampshire, Vermont, West Virginia and sold
on-line systems to the Virginia Lottery.


NEW PRODUCT DEVELOPMENT

         Since its inception, Scientific Games has provided many of the
innovations in instant ticket technology in both manufacturing and game
development which subsequently became the industry standard. Past examples of
new products developed by Scientific Games include the ink-jet printed instant
ticket, cooperative services (lottery privatization), bar coding on the front
and back of tickets (which facilitates validation), the IL/MVS instant ticket
accounting management, ticket validation software technology, Terra 2000(R)
tickets, and SciScan Technology(R). The Terra 2000 ticket is a recyclable and
biodegradable paper ticket which meets the rigorous security standards demanded
by the lottery industry. SciScan Technology is a keyless validation system for
retailers which significantly reduces the time requirements of ticket validation
while at the same time improving security of the game. The Company's latest
innovation, SGI-NET, is a high-performance, configurable hardware and
software-redundant transaction processing system that can accommodate both
instant and on-line lottery operations. SGI-NET's configurability and
software-driven architecture enables it to operate with virtually any type or
number of terminals and provides flexibility to adapt to unique characteristics
of almost any lottery.

         Certain technology associated with these innovations is the subject of
issued patents and patent applications currently pending with the United States
Patent Office and selected other countries outside the United States. The
Company also holds a number of other patents and licenses with respect to
certain technology used in its business. The loss of any such patent or license,
however, would not in the opinion of management have a material adverse effect
on the Company's overall business. Scientific Games is continually looking for
ways to apply its expertise in specialty printing technologies and
security/randomization techniques to develop commercially viable products for
both the lottery industry as well as for other commercial applications.


CUSTOMER SERVICE

         The Company has an active professional Customer Service Department
which works closely with its account managers, the lotteries, and Scientific
Games' Graphics and Game Programming Departments in the area of initial game
design. Artwork concepts, game play style and prize structure are assembled,
proposed, and refined. Important manufacturing information is also assembled and
documented in the "working papers" by the Company's customer service
representatives. This information, when approved by the lottery, becomes the
technical manufacturing specifications for specific instant ticket orders.


MARKETING

         Scientific Games has been instrumental in the development of marketing
strategies for instant games for domestic and foreign lotteries, including some
of the most successful lotteries in North America. The Company's involvement
includes all phases of instant game marketing support, including marketing
strategies, prize structures, game rules, delivery schedules, play styles,
telemarketing, instant ticket ordering and billing, field sales support,
research, game design, working papers, retailer manuals, instant game concepts,
ticket quantities, delivery and promotions. Scientific Games or its predecessor
has prepared market research analysis of gaming tendencies in most new state
lotteries since 1982, and the Company can provide customers with a bank of
lottery-specific consumer and market research data derived from these years of
analyses.

         Instant tickets are believed to have the broadest consumer appeal of
any lottery product. Consumers are generally split equally between men and
women, are distributed evenly between ages 25 and 65, and cover a broad range of
socioeconomic groupings. This broad-based market is significantly affected by
appropriate advertising and promotion. The most successful lotteries have found
that instant lottery products are largely an impulse item which must be marketed
like other consumer products.


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         Sales of instant lottery tickets are based on, among other factors, the
quality of the lottery product, prize structure design and the existence of
efficient retail distribution systems which allow maximum convenience to
consumers. Scientific Games, with its large game library and extensive research
into product design and consumer purchasing habits, has been an industry leader
in producing new products, distribution methodologies and consumer promotions to
enhance sales.


SECURITY

         Scientific Games recognizes that security and integrity are the
foundation of successful lottery organizations. As the incidence and severity of
publicly reported cases of physical and computer crime continue, major lotteries
periodically reassess key security questions concerning the vulnerability of
lottery games. Attempts to penetrate security measures may come from various
combinations of customers, retailers, vendors, lottery officials and others.
Because the integrity of a lottery is believed essential to its successful
operation, both the vendor and lottery must guard their systems against
unauthorized actions. The Company is unaware of any practical, economically
feasible way to breach the security of its instant lottery tickets which could
result in a material loss to any of its customers, nor is it aware of any breach
thereof which has resulted in any material loss to any of its lottery customers.

         Scientific Games constantly assesses the adequacy of its security
systems, incorporating various improvements, bar coding and additional layers of
protection. There must be well-planned security measures in place at every stage
of the lottery operation. Scientific Games has pioneered and effected security
safeguards in areas of ticket specifications, production, packaging, delivery,
distribution and accounting. Also, computer function safeguards, including
secure ticket data, control number encryption, winner file data, and ticket
stock control have been incorporated in the Company's data processing and the
computer operations phase. The Company retains a major public accounting firm to
perform agreed upon procedures for each game produced before it is sent to the
customer.


MANUFACTURING PROCESS

         Using a series of computer-controlled presses and ink-jet imagers,
management believes Scientific Games' tickets incorporate the most advanced
technology and security methodology available in the industry. Its facilities
are designed for efficient, secure production of instant game tickets and
support ink-jet image tape generation, printing, packaging and storage of
instant game tickets.

         The Company's dedicated computer-controlled printing process is
specifically designed for producing instant lottery game tickets for
governmentally sanctioned lotteries and promotional games. The process is not a
business forms press or a direct mail press temporarily diverted to lottery
work. The Company's specialized equipment contributes to the underlying superior
manufacturing and product quality. Instant ticket games are delivered finished
and ready for distribution by the lottery, or by Scientific Games in the
jurisdictions which are part of a cooperative services contract with Scientific
Games.

         Paper and ink are the principal raw materials consumed in the Company's
manufacturing operations. The Company has a variety of sources for both paper
and ink and should, therefore, not be dependent on any particular supplier.


PERSONNEL

         As of December 31, 1997, the Company had approximately 1,177 full-time
employees. Four of Scientific Games' employee groups are represented by a labor
union. At the California Facility (See "Properties"), ticket packaging is
performed by approximately 60 employees who are members of the Service Employees
International Union Local 1877. SG Austria's employees are represented by a
Worker's Council as is typical in many European companies. At the Leed's
Facility in the United Kingdom, approximately 150 employees are members of the
GPMU union. Approximately 14 employees who work at the Company's cooperative
service facility in Harrisburg, Pennsylvania are members of the Chauffeurs,
Teamsters and Helpers Local Union 776. The Company believes that its employee
relations are good.


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EXECUTIVE OFFICERS

         The following table sets forth certain information regarding the
executive officers of the Company who are considered executive officers by the
Company for the purposes of Rule 36-7, as of March 1, 1998:

<TABLE>
<CAPTION>
                  NAME               AGE                POSITION WITH THE COMPANY
----------------------------------------------------------------------------------------------------
<S>                                  <C>       <C>
William G. Malloy.............        51       Director, Chairman, President and Chief
                                               Executive Officer
William F. Behm...............        52       Director and Executive Vice President
Thomas F. Little..............        53       Senior Vice President
Cliff O. Bickell..............        55       Vice President, Treasurer and Chief Financial Officer
C. Gray Bethea, Jr. ..........        53       Vice President, Secretary and General Counsel
Bruce H. Longhurst............        57       Vice President, International Sales and Marketing
Howard H. Roath...............        45       Vice President-U.S. Sales and Marketing
Terry D. Mangold..............        57       Vice President-Instant Game Services
William C. Christie...........        49       Managing Director-Scientific Games International Limited
James H. Edwards, Jr. ........        52       Director of Manufacturing
DI Gerhard Harwalik...........        43       Executive Vice President-Scientific Games Austria
Mark L. Hutchinson............        39       Director-Scientific Games Africa
Donald N. MacLean.............        53       Director- Human Resources
Kenneth W. Taylor.............        37       Corporate Controller
John J. Walsh.................        38       Director-Cooperative Services
</TABLE>

         WILLIAM G. MALLOY has been President and Chief Executive Officer since
1990. Mr. Malloy was elected a Director and Chairman of the Board in October
1991 when Centre Partners L.P. and certain executive officers of the Company
purchased substantially all of the assets of the instant lottery ticket sales
business, the instant ticket cooperative sales business and the video lottery
business of the predecessor to the Company in a leveraged buy-out transaction
("Acquisition"). Prior to becoming the Company's President and Chief Executive
Officer, Mr. Malloy served as Vice President, Treasurer and Chief Financial
Officer. Mr. Malloy joined the Company in 1987 when he transferred from the
corporate staff of Bally Manufacturing Company. Mr. Malloy has over twenty years
of experience in the coin-operated amusement and gaming industry.

         WILLIAM F. BEHM joined the Company in 1978 and was promoted to
Executive Vice President in 1988 and was elected a Director in 1992. Mr. Behm
has overall management responsibility for Scientific Games' research and
business development projects. In addition, he is also responsible for the
Company's product security. Prior to joining Scientific Games, Mr. Behm was an
aerospace engineer with McDonnell Douglas Corporation. Mr. Behm was instrumental
in the development of the Company's former on-line lottery system, the invention
of instant lottery bar codes, the development of the Company's environmental
instant ticket and the development of the Company's recent SciScan and Winner's
Choice product lines. He is co-named as the inventor of various issued patents
and pending applications and is a regular speaker at trade shows and conferences
on the subject of technology in the lottery industry.

         THOMAS F. LITTLE joined the Company in 1975 and was promoted to Senior
Vice President in 1991. Mr. Little has overall management responsibility for
Scientific Games' Systems Division, which includes the Company's on-line lottery
systems business. Prior to joining the Company, Mr. Little was Manager of Data
Processing for First National Bank of Atlanta. Mr. Little's experience includes
the introduction of the first video lottery test in Illinois, the development of
the Company's former on-line lottery system and extensive contacts with the
international lottery industry.

         CLIFF O. BICKELL joined the Company as Vice President, Treasurer and
Chief Financial Officer in January of 1995. Mr. Bickell has overall management
responsibility for Scientific Games' corporate financial, accounting, and
administrative affairs, including the Company's human resource function. Prior
to joining Scientific Games, Mr. Bickell was Vice President, Chief Financial
Officer and Treasurer of Paragon Trade Brands, a multi-national consumer
products manufacturer where he had similar financial responsibilities. In
addition, Mr. Bickell has held


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the positions as Senior Vice President, Corporate Administration - Chief
Financial Officer of the W. A. Krueger Co., a commercial printing company, and
Treasurer of Dataproducts Corporation, a multinational electronics manufacturer.

         C. GRAY BETHEA, JR. joined the Company in 1985 as Vice President,
Secretary and General Counsel. Mr. Bethea has overall management responsibility
for Scientific Games' legal compliance, statutory interpretation, corporate
matters, and contract documents. Throughout his corporate and private practice
of law, Mr. Bethea has had extensive experience in corporate and contract law.
Prior to joining Scientific Games, Mr. Bethea was a partner with the law firm of
Smith, Gambrell & Russell in Atlanta, Georgia.

         BRUCE H. LONGHURST joined the Company in 1997 as Vice President,
International Sales and Marketing. Mr. Longhurst has overall management
responsibility for Scientific Games international marketing and sales efforts.
Prior to joining Scientific Games, Mr. Longhurst was Vice President,
International and Strategic Planning for Autotote Corporation and Managing
Director of its subsidiary TeleControl, which was acquired in 1997 by Scientific
Games. Mr. Longhurst held these and other positions with Autotote from
1993-1997. From 1988 - 1992, Mr. Longhurst held the position of Executive Vice
President of the Worldwide Wagering Division of General Instrument Corporation.
In addition, Mr. Longhurst was one of the founders and served as Executive Vice
President and General Manager of Ticketron, including its AWI subsidiary.

         HOWARD H. ROATH joined the Company in 1987 and was promoted to Vice
President, U.S. Sales and Marketing in 1997. Mr. Roath has overall management
responsibility for Scientific Games' U.S. marketing and sales efforts. Prior to
joining Scientific Games, Mr. Roath served as Director of Marketing of the
Pennsylvania Lottery, Director of Pharmaceutical Assistance Program for the
Elderly for the Pennsylvania Department of Aging and the Director of the
Division of State Employment for the Pennsylvania's Governor's Office of
Administration.

         TERRY D. MANGOLD joined the Company in 1975 and was promoted to Vice
President-Instant Games Services in 1987. Mr. Mangold has overall management
responsibility for Scientific Games' instant ticket game programming operations,
i.e., the generation of games with the proper distribution of winning and
non-winning tickets. Prior to joining Scientific Games, Mr. Mangold was
responsible for computerized systems at First National Bank of Atlanta.

         WILLIAM C. CHRISTIE joined the Company in 1996 as Managing Director for
the Company's subsidiary SGIL in the United Kingdom. Mr. Christie has overall
management responsibility for ticket production and printing for SGIL's
production facilities. Prior to joining the Company, Mr. Christie was the
Managing Director of Lottery Products for De La Rue in the United Kingdom.
During his 26 years with De La Rue, Mr. Christie held various other management
positions.

         JAMES H. EDWARDS, JR. joined the Company in 1991 as Plant Manager and
was promoted to Director of Manufacturing in 1998. Mr. Edwards has overall
management responsibility for ticket production and printing for the Company's
United States production facilities. Prior to joining the Company, Mr. Edwards
held various management positions with Quebecor Printing, Inc. for over 20
years.

         DI GERHARD HARWALIK joined the Company in 1997 as Executive Vice
President. Mr. Harwalik has overall management responsibility for the Company's
subsidiary SG Austria. Prior to joining the Company, Mr. Harwalik, as one of the
original founders of TeleControl, (now known as SG Austria), served as their
Managing Director from 1983 to 1995 and maintained a management role in the SG
Austria until 1997. Mr. Harwalik also was the manager the computer center of the
Technical University of Vienna and held positions with ETAG Group, Switzerland,
which developed on-line systems for gaming wagering.

         MARK L. HUTCHINSON joined the Company in 1997 as Managing Director. Mr.
Hutchinson has overall management responsibility for the Company's branch office
in Africa including operations in South Africa and Zimbabwe. Prior to joining
Scientific Games, Mr. Hutchinson served as President from 1992 to 1997 of Gaming
Solutions International. Mr. Hutchinson also held the position of Senior Vice
President of an instant ticket printing company.


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         DONALD N. MACLEAN joined the Company in 1997 as Director of Human
Resources. Mr. MacLean manages the personnel function for all of the Company's
locations. Prior to joining the Company, Mr. MacLean held the position of Vice
President of Human Resources for Burnham Service Corporation from 1989 to 1997.
In addition, Mr. MacLean was the Corporate Director of Human Resources for
Interlake Corporation and Division Director of Human Resources for Mueller
Corporation.

         KENNETH W. TAYLOR joined the Company in 1987 and was promoted to
Corporate Controller in 1990. Mr. Taylor has management responsibility for
accounting and financial information as well as responsibility for customer
pricing compliance. Prior to joining the Company, Mr. Taylor held auditor
positions with Bally Manufacturing Corporation, Duchossois Industries and Amsted
Industries, Inc.

         JOHN J. WALSH joined the Company in 1986 and was promoted to Director
of Cooperative Services in 1994. Mr. Walsh has overall management responsibility
for coordinating lottery operations support through the Cooperative Services
Program. Prior to joining the Company, Mr. Walsh held positions with Control
Data Corporation and Ticketron's sports and entertainment division.

         THE FOLLOWING DISCUSSION OF ASPECTS OF THE COMPANY'S BUSINESS ALSO
CONSTITUTES A CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS
OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.

         The Company wishes to caution readers that the following important
factors, among others, in some cases have affected, and in the future could
affect, the Company's actual results and could cause the Company's actual
quarterly and annual consolidated results for 1998, and beyond, to differ
materially from those expressed in any forward-looking statements made by, or on
behalf of, the Company:


GOVERNMENTAL REGULATION

         Lotteries are not permitted in the various states/jurisdictions of the
United States unless expressly authorized by law. The ongoing operations of
authorized lotteries in the United States typically are extensively regulated.
Applicable legislation varies from jurisdiction to jurisdiction but, in addition
to authorizing the lottery and creating the applicable regulatory authority, the
lottery statues generally dictate certain broad parameters of lottery operation,
including the percentage of lottery revenues which must be paid out in prizes.
Lottery authorities typically exercise significant control as to the selection
of vendors (such as the Company) and award of lottery contracts, ticket prices,
types of games played and marketing strategy, all of which can affect the
Company's operating results.

         Prior to and after granting a lottery contract, governmental
authorities generally conduct an investigation of the Company and its employees
and such authorities may require removal of an employee deemed to be unsuitable.
The Company has not been disqualified from a lottery contract as a result of any
such investigation. Certain states also require extensive personal and financial
disclosure (including, among other things, submission of fingerprints, personal
financial statements and federal and state income tax returns) and background
checks of control persons and entities beneficially owning a specified
percentage (typically 5% or more) of the Company's securities. The failure of
such beneficial owners to submit to such background checks and provide such
disclosure could jeopardize the award of a lottery contract to the Company or
provide the basis for cancellation of existing lottery contracts.

         Scientific Games generally retains governmental affair representatives
in various states of the United States to advise legislators and the public
concerning its views on lottery legislation, to monitor any such legislation and
to advise the Company on contract proposals to lottery authorities. Scientific
Games also makes campaign contributions to various state political parties and
political candidates. The Company believes it has complied with applicable laws
and regulations concerning campaign contributions and lobbying disclosures.

         The award of lottery contracts and ongoing operations of lotteries in
international jurisdictions also are extensively regulated, although this
regulation usually varies from that prevailing in the United States.
Restrictions are frequently imposed on foreign corporations seeking to do
business in such jurisdictions and, as a consequence, the Company has, in a
number of instances, allied itself with a local company when seeking foreign
lottery contracts. Laws and regulations applicable to lotteries in the United
States and foreign jurisdictions are subject to


                                       9
<PAGE>   10
change and the effect of such changes on the Company's ongoing and potential
operations cannot be predicted with certainty.


MARKETS

         The Company's operations are international in scope. With 39 states and
the District of Columbia currently operating lotteries in the United States, the
Company's growth in the domestic market depends primarily on expanded activities
of existing lotteries as well as winning new contract awards, re-bids and
contract extensions. Contrasted with the domestic market, the international
market is far from mature, with various countries viewing lotteries as a source
of revenue for a variety of governmental programs. For a discussion of the
Company net revenues, operating income and identifiable assets attributable to
U.S. production operations, see Note 11 of the Notes to the Financial Statements
set forth elsewhere in this report, which is incorporated herein by reference
thereto. For a discussion of revenues from lottery agencies and other customers
domiciled in foreign countries, also see Note 11 which is incorporated herein by
reference thereto.

         In 1997, no state accounted for more than 10% of the revenues of the
Company. The Company had twelve domestic contracts that were scheduled to expire
in 1997. Six of these contracts were extended, and the Company was awarded new
contracts for five states through a competitive procurement process. The Company
was the unsuccessful bidder on the New Hampshire Lottery contract. With regard
to contracts previously held by its competitors, the Company was the successful
bidder in 1997 for the Pennsylvania Lottery, which now has a cooperative
services contract with the Company.

         The Company has seven domestic contracts which are subject to
extensions or scheduled to expire in 1998. Of these seven contracts, five have
extensions available. Management believes new contracts for those states without
extensions will be awarded through a competitive procurement process in which
the Company will participate. The Company estimates, based in part upon industry
and lottery furnished information, that 1997 domestic instant ticket retail
sales by lotteries ("1997 Lottery Sales") were in excess of $14.1 billion. In
comparison, 1997 international instant ticket retail sales are estimated to be
$13.0 billion. Based in part on such information, management estimates the
Company's domestic customers with contracts subject to extensions or scheduled
to expire in 1998 represent, in the aggregate, retail sales of approximately
22.1% of 1997 Lottery Sales. In contrast, management believes that lottery
contracts with seven states currently serviced by its competitors are subject to
extensions or are scheduled to expire in 1998. The Company expects that new
contracts for such states not exercising extensions will be awarded through the
competitive procurement process in which the Company expects to participate. The
Company estimates, based in part upon industry and lottery furnished
information, that instant ticket contracts for the Company's competitors
scheduled to expire in 1998 represent, in the aggregate, retail sales of
approximately 24.2% of 1997 Lottery Sales.

         The Company's domestic lottery contracts typically have an initial term
of from one to five years and usually provide the customer with options to
extend the contract one or more times under the same or mutually agreeable terms
and conditions for additional periods generally ranging from one to five years.
The Company's customers have exercised extension options in the Company's
domestic instant lottery contracts a majority of the time.

The table included herein lists the domestic instant lottery contracts with
which the Company had executed agreements as of March 23, 1998 and certain
information with respect thereto. The Company is the primary instant ticket
supplier unless otherwise noted. The table also includes 1997 instant ticket
retail sales for each state or district. Information obtained from industry
sources lists 1997 domestic instant ticket retail sales of $14.1 billion and
international instant ticket retail sales of $19.6 billion.




                                       10
<PAGE>   11
                           DOMESTIC LOTTERY CONTRACTS

<TABLE>
<CAPTION>
                             1997
                        INSTANT TICKET     COMMENCEMENT        EXPIRATION          CURRENT RENEWAL
                         RETAIL SALES    DATE OF CURRENT    DATE OF CURRENT            OPTIONS
   STATE/DISTRICT        (IN MILLIONS)       CONTRACT           CONTRACT              REMAINING            TYPE OF CONTRACT
-----------------------------------------------------------------------------------------------------------------------------
<S>                     <C>              <C>                <C>              <C>                        <C>
Arizona                       113.0        January 1998        January 2001            2 one-year             Instant Tickets
California                    556.1        January 1996        January 1998            2 one-year             Instant Tickets
Colorado                      218.2          March 1995           June 1999            2 one-year             Instant Tickets
District of Columbia           23.0            May 1996            May 1998            3 one-year             Instant Tickets
Delaware                       19.5           July 1995           July 2000                  none        Cooperative Services
Florida                       664.8          April 1997      September 2002                  none        Cooperative Services
Georgia                       557.0          April 1993          April 2003                  none        Cooperative Services
Illinois                      611.0           July 1996           July 1999            3 one-year             Instant Tickets
Indiana                       328.9       December 1997       December 1999            2 one-year             Instant Tickets
Iowa                           91.3        January 1995       December 1998            1 one-year             Instant Tickets
Kentucky                      272.4        October 1997        October 1999            3 one-year        Cooperative Services
Maine                         102.9           July 1990           June 2000                  none        Cooperative Services
                                                                                                        and SciScan Terminals
Massachusetts               1,963.6        October 1993        October 1998                  none             Instant Tickets
Minnesota                     266.6        January 1995        January 1999            1 one-year             Instant Tickets
Missouri                      235.1           June 1997           June 1999                  none             Instant Tickets
Nebraska                       41.7           July 1993           June 2001                  none        Cooperative Services
                                                                                                        and SciScan Terminals
New Jersey                    446.7       November 1996        October 1999            2 one-year             Instant Tickets
New Mexico                     50.4          March 1997          March 1999            4 one-year             Instant Tickets
New York                    1,030.6          April 1996          April 1999            2 one-year             Instant Tickets
Pennsylvania                  432.8          April 1997          April 2002            5 one-year        Cooperative Services
South Dakota                   14.6           June 1995           June 1998            2 one-year             Instant Tickets
Virginia                      285.9        January 1997           July 2002  1 three or five year           SciScan Terminals
Washington                    217.5            May 1995            May 1998            2 one-year             Instant Tickets
W. Virginia                    78.1       December 1996           June 2000            1 one-year        Cooperative Services
                                                                                                        and SciScan Terminals
Wisconsin                     256.2        October 1996        October 1998            1 one-year            Instant Tickets*

-----------------------------------------------------------------------------------------------------------------------------
* secondary printer
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>

         Based on industry information, it is estimated that 1997 domestic
on-line lottery retail sales were $19.6 billion compared with 1997 international
on-line lottery retail sales of $48.7 billion. The Company's re-entry into the
on-line lottery business in 1997 will allow the Company to compete for a share
of both the domestic and international sales in the future. The Company believes
on-line lottery contracts with four states currently serviced by its competitors
are subject to extensions or will expire during 1998. It is estimated that
domestic on-line lottery contracts for the Company's competitors scheduled to
expire or subject to extensions during 1998 represent, in aggregate, on-line
lottery retail sales of approximately 8.8% of 1997 on-line lottery retail sales.
The Company expects to bid on these domestic contracts, while pursuing
international on-line opportunities during 1998.

         Sales outside the United States may consist of sales of goods and
services exported to customers located overseas, sales of goods and services to
customers in countries in which the Company's foreign subsidiaries have
manufacturing facilities or sales of goods and services by the Company's foreign
subsidiaries located outside the


                                       11
<PAGE>   12
country of production. Although the Company does business worldwide, a majority
of the Company's current foreign operations are conducted in, and U.S. export
sales are made to customers located in Europe.

         The Company's international lottery contracts are less likely to have
firm contract periods and, historically, international lottery ticket customers
have sought competitive bids for such contracts more frequently than domestic
U.S. customers. The volume and timing of the international contracts fluctuate
from country to country and it is difficult to predict the volume or timing of
sales to these customers from period to period.


LOTTERY CONTRACTS: PROCUREMENT PROCESS AND REQUIREMENTS

         Lotteries in the United States typically select an instant ticket
supplier by issuing a Request for Proposals ("RFP") which outlines contractual
obligations as well as products and services to be delivered. An evaluation
committee frequently comprised of key lottery staff evaluates responses based on
various criteria. These criteria usually include quality of product, security
plan and features, experience in the industry, quality of personnel and services
to be delivered and price. The Company believes that the quality of its
personnel, technical expertise and manufacturing efficiency give it many
advantages relative to the competition when responding to state lottery RFPs.
However, many lotteries still award the contract to the qualified vendor with
the lowest price, regardless of factors other than price. Contract awards by
lottery authorities in the United States are sometimes challenged by
unsuccessful competitors which can result in protracted legal proceedings.

         The Company's domestic lottery contracts typically contain provisions
for payment of liquidated damages for late delivery of tickets or delivery of
defective tickets, which in the aggregate could result in several million
dollars or more per day in penalties to the Company. Although the incurrence of
liquidated damages with respect to on-line lotteries may not be uncommon, the
Company believes it is uncommon for instant lotteries. Scientific Games has not
typically paid any material liquidated damages under an instant lottery
contract, although it has on occasion negotiated customer allowances which
management does not consider material.

         Lottery contracts to which the Company is party frequently contain
exacting implementation schedules and performance requirements. Failure to meet
these schedules and requirements can result in substantial monetary liquidated
damages, as well as possible contract termination. The Company maintains a
bonding program for its bid bonds, litigation bonds and performance bonds
through various insurance companies. As of December 31, 1997, $64.7 million was
outstanding in aggregate face amount of surety bonds issued. One or more of
these bonds is generally required by a lottery customer in order to participate
in a lottery procurement or to enter into a contract with the lottery following
successful bid. Failure to provide such bonds would materially and adversely
affect the Company's ability to do business. The Company's bonding program is
backed by a blanket indemnity of the surety.

         Lottery contracts of the Company periodically expire and/or reach
optional extension dates. Upon the expiration of a contract (including any
extensions thereof), lottery authorities may award new contracts through a
competitive procurement process. There can be no assurance that the Company's
contracts will be extended or that the Company will be awarded new contracts as
a result of competitive procurement processes in the future. The Company's
lottery contracts typically permit a lottery authority to terminate the contract
at any time for failure to perform and other specified reasons, and many of such
contracts permit the lottery authority to terminate the contract at will without
penalty. Depending upon, among other factors, the amount of new revenue derived
by the Company thereunder, the termination, expiration or failure to renew one
or more instant lottery contracts could have a material adverse effect on the
Company's business or prospects.


COMPETITION

         The instant lottery business is highly competitive, and the Company
business faces competition from a number of domestic and foreign instant ticket
manufacturers, on-line lottery system providers and other competitors.

         In particular, Scientific Games currently has two primary instant
lottery ticket competitors in the U.S.: Pollard Banknote Limited ("Pollard") and
BABN Technologies ("BABN",a subsidiary of Group Francois-Charles Oberthur of
France), which purchased the lottery ticket business of a former competitor,
Dittler Brothers, Inc. ("Dittler") in 1997. The Company estimates that the
retail sales value of its domestic customer base was in excess of 60% of total
domestic instant ticket retail sales in 1997 - approximately twice as many as
its next largest competitor.


                                       12
<PAGE>   13
Except as permitted by the applicable provisions of the North American Free
Trade Act with respect to Canada and Mexico, it is currently illegal to import
lottery tickets into the United States from a foreign country. The Company's
business could be adversely affected should additional foreign competitors in
Canada or Mexico export their lottery products to the U.S. or should other
foreign competitors establish printing facilities in the U.S., Canada or Mexico
to supply the U.S. market.

         Internationally, there are many lottery instant ticket vendors which
provide competition to the Company, including, among others, BABN, Pollard,
Creative Games International, Inc. in the United States, government owned
printers in Scandinavia, GPS Honsel in Germany and various other vendors.

         Both in the domestic market and internationally, factors which
influence the award of lottery contracts in addition to price, are believed to
include, among others, the ability to optimize lottery revenues through game
design and technical capability, quality of the product, dependability,
production capacity, marketing experience, financial condition and reputation of
the bidder, the security and integrity of the bidder's production operations,
products and services and the satisfaction of various other requirements and
qualifications imposed by specific jurisdictions.

         Scientific Games' position as a leading worldwide producer of instant
lottery tickets and its reputation as a developer of state-of-the-art technology
and marketing concepts, as well as its experience in the industry, are believed
to enhance significantly the Company's competitive position. The large capital
investment necessary to purchase, customize and install an instant ticket
printing operation, the high level of security required in the lottery industry
and the fact that all states in the U.S. which have lotteries have typically
required potential suppliers to have prior lottery experience are all factors
which tend to limit the number of firms which are willing to, or are in the
position to, enter the instant lottery ticket production business. The Company's
business could be adversely affected should its competitor's research and
development activities result in reduced technological differentiation between
the products of the Company and its competitors. Similarly, in the event
technological developments materially reduce the capital investment required to
finance secure lottery ticket printing operations, the Company's business could
be adversely affected by increased competition. Management does not anticipate
any material reduction in the level of capital financing required for entry into
the lottery ticket product business in the foreseeable future.

         In the cooperative services business, the Company believes it has no
current competitor in the U.S. market which produces instant lottery tickets,
provides on-line systems and offers a full range of cooperative services to
state lotteries. Competitors have typically either manufactured only instant
tickets or provided only certain services which comprise cooperative services,
such as software for the management systems, marketing assistance or other
specific duties. However, an on-line vendor in cooperation with an instant
ticket supplier may be considered a competitor or potential competitor in
cooperative services. In addition, an on-line vendor not in cooperation with an
instant ticket supplier may nonetheless provide various cooperative services,
including data processing services. Scientific Games has two primary domestic
and international competitors in this regard: Powerhouse Technologies, Inc.,
which changed its name from Video Lottery Technologies, Inc in 1997 and GTech
Corporation.

         In 1997, the Company discontinued its charity pull-tab ticket business,
which was produced and distributed by its subsidiary GameTec Inc. ("GameTec").
In connection with the disposition, the Company sold substantially all of the
assets of GameTec to International Gamco, Inc. ("Gamco"). The Company entered
into a three-year extendible marketing agreement with Gamco to provide marketing
and related services to state lotteries for pull-tab tickets. Currently, the
Company has 3 contracts with state lotteries for pull-tab tickets. The Company
believes it is desirable to offer pull-tab tickets to its lottery customers to
maintain a full range of products and services and the Company will continue to
provide pull-tab tickets to its lottery customers through the marketing
agreement. The Company does not consider the provision of pull-tab tickets to
its lottery customers to be a separate operating segment, and sales of pull-tab
tickets to lottery customers accounted for less than 10% of the Company's
consolidated gross revenues in 1997.


POTENTIAL FLUCTUATIONS IN OPERATING RESULTS

         The Company's operating results may vary significantly from period to
period. Revenues and capital expenditures may be difficult to forecast because
the Company's sales cycle may vary and depend upon facts such


                                       13
<PAGE>   14
as the size and timing of awarded contracts, changes in customer budgets, delays
in customer orders, changes in lottery marketing strategies and ticket ordering
patterns and general economic conditions. Contracts with governmental entities
operating newly authorized instant lotteries tend to generate higher levels of
ticket sales in the initial months.

         Operating results also may be affected by the working capital
requirements associated with preparing facilities and equipment, establishing
the distribution system and printing tickets for a recently awarded contract,
and by the amount of time elapsing before the receipt and/or recognition of
revenues from the sale of instant lottery tickets and the provision of
cooperative services. New cooperative service customers may require additional
resources and infrastructures that may be required to be put in place before
revenues are realized. In addition, operating results may be affected by
utilization of overtime labor and the Company's ability to smoothly integrate
new and/or upgraded production equipment with its existing production
operations. Revenues from the sale of instant tickets, cooperative services,
software and hardware development may be recognized based upon ticket shipments,
a percentage of the lottery's instant ticket sales to the public, a contracted
price, a license agreement, an equipment lease agreement or any combination of
the foregoing. Current on-line revenues are generated from the sale of hardware
and software to lotteries, as well as support and maintenance contracts on the
on-line systems.

         Additionally, circumstances encountered in international markets,
including the substantial amount of time involved in bidding on any
international contract, the evaluation of such bid and the resultant contract
award or rejection can vary significantly from that originally anticipated when
the bid is prepared. All of these factors may make it difficult to forecast
revenues and expenditures related to the Company's operations over extended
periods and may result in fluctuations in the Company's quarterly financial
results. Accordingly, quarter to quarter fluctuations in revenues may be
expected.


RELIANCE ON SENIOR MANAGEMENT

         The Company believes it has benefited and continues to benefit
substantially from the skills, experience and efforts of its senior management
(See "Executive Officers"). The loss of the services of members of the Company's
senior management could have a material adverse effect on the Company's business
and prospects.


ADDITIONAL RISK FACTORS AND INVESTMENT CONSIDERATIONS

         Additional or related factors which could affect the Company's actual
results and could cause the Company's actual consolidated results for the first
quarter of 1998, and beyond, to differ materially from those expressed in any
forward-looking statement made by, or on behalf of, the Company include:

         Continued or increased pressure to change the selling prices for the
Company's products, and the resulting effects on margins, the Company's actions
in connection with continued competition in many product areas, including, but
not limited to, price competition and fluctuating demand for certain lottery
ticket products by one or more lottery customers;

         Difficulties or delays in the development, production, testing and
marketing of products, including, but not limited to, a failure to ship new
products utilizing SGI-NET, SciScan Technology and/or other technologies when
anticipated, the failure of customers to accept these products or technologies
when planned, any defects in products and a failure of manufacturing economies
to develop when planned;

         Occurrences affecting the Company's ability to reduce product and other
costs, and to increase productivity;

         Inability to offset pricing competition with production efficiencies
and economies of sales; underutilization of the Company's plants and factories
resulting in production inefficiencies and higher costs; start-up expenses and
inefficiencies and delays and increased depreciation costs in connection with
the start of production in new plants and expansions;


                                       14
<PAGE>   15
         The amount, and rate of growth in, the Company's selling, general and
administrative expenses, and the impact of unusual items resulting from the
Company's ongoing evaluation of its business strategies, asset valuations and
organizational structures;

         The compromise or breach or perceived compromise or breach of the
Company's production security and integrity or the security and integrity of its
products or services;

         Difficulties in obtaining raw materials, supplies, power and natural
resources and any other items needed for production of lottery tickets and other
products;

         The acquisition of fixed assets and other assets, including inventories
and receivables, and the making or incurring of any expenditures and expenses,
including, but not limited to, depreciation and research and development
expenses, any revaluation of assets or related expenses and the amount of, and
any changes to, tax rates;

         The effects of, and changes in, trade, monetary and fiscal policies,
laws and regulations, other activities of governments, agencies and similar
organizations, and social and economic conditions, such as trade restrictions or
prohibitions, inflation and monetary fluctuations, import and other changes or
taxes, the ability or inability of the Company to obtain, or hedge against,
foreign currency, foreign exchange rates and fluctuations in those rates, loss
of international contracts or lower international revenue resulting from
increased expenses associated with overseas operations, the impact of foreign
labor laws and disputes, adverse effects arising out of political unrest,
terrorist activity, nationalizations and unstable governments and legal systems,
and intergovernmental disputes, as well as actions affecting frequency, use and
availability of lottery products and licensing of lotteries for business;

         The costs and other effects of legal or administrative cases and
proceedings (whether civil, such as environmental and product-related, or
criminal), settlements and investigations, claims, and changes in those items;
developments or assertions by or against the Company relating to intellectual
property rights and intellectual property licenses; adoptions of new, or changes
in, accounting policies and practices and the application of such policies and
practices;

         The rejection or a delay in implementing terms of the joint venture
agreement with La Francaise des Jeux by the French Minister of Finance or the
inability to execute definitive agreements for products and services related to
the joint venture agreement;

         The effects of changes within the Company's organization or in
compensation and benefit plans; any activities of parties with which the Company
has an agreement or understanding, including any issues affecting any investment
or joint venture in which the Company has an interest; the amount, type and cost
of the financing which the Company has, and any changes to that financing; and

         The ability to integrate acquisitions into the Company's existing
operations and unexpected difficulties or problems with such acquired entities
including inadequate production equipment, inadequate production capacity or
quality, outdated or incompatible technologies or an inability to realize
anticipated synergies and efficiencies, whether within anticipated time frames
or at all.

         For a more detailed discussion of certain of these risks see Item 3
"Legal Proceedings" and Item 7 "Management's Discussion and Analysis of
Financial Condition and Results of Operations".


ITEM 2.           PROPERTIES

         The Company currently has four instant ticket manufacturing sites: a
71,000 square foot leased facility in Gilroy, California (the "California
Facility"), a 185,000 square foot owned headquarters and manufacturing facility
in Alpharetta, Georgia (the "Georgia Facility"), a 112,000 square foot leased
facility in Leeds, United Kingdom (the "Leeds Facility"), and a 30,000 square
foot leased facility in Bradford, United Kingdom (the "Bradford Facility").
Scientific Games has a 8,000 square foot leased facility in Vienna, Austria (the
"Austria Facility"), where the main


                                       15
<PAGE>   16
software development activities for its on-line business are located. Sales
support, research, product development, U.S. software development and graphics
are located in the Company's corporate headquarters at the Georgia Facility. The
four manufacturing facilities have a combined maximum production capacity of
approximately 14 billion "standard sized" (2 by 4 inch) tickets per year.
However, at maximum production capacity, the Company incurs substantial overtime
expense and can encounter reduced efficiencies. The California Facility consists
of office and production space equipped with a modern gravure press with
multiple ink-jet imagers. The California Facility lease expires April 30, 2005.
Currently, annual rents for the California Facility are approximately $680,000.
In addition, the Company separately leases in California an approximately 14,000
square foot ink production facility under a lease expiring April 30, 1999 with
annual rents of approximately $90,000. The Leeds Facility consists of office and
production space equipped with five sheet-fed offset presses. The administrative
and game development departments for both the Leeds and Bradford Facilities are
in this location. The Leeds Facility lease expires October 31, 2001 with annual
rents of approximately $368,000. The Bradford Facility includes office and
production space and is equipped with three separate printing processes: offset,
inkjet and rotary screen. The Bradford Facility lease expires June 30, 2016 with
annual rents of approximately $212,000. The Austria Facility consists of office
and software development space equipped with state of the art software
development tools. The Austria Facility lease expires on December 31, 2007 with
annual rents of approximately $465,000.

         Scientific Games' headquarters and printing facility in Georgia began
operation in February 1992. The Georgia Facility operates two presses, including
a modern 15 station gravure press. The Georgia Facility's gravure press is
equipped with a state-of-the-art register control system, designed to reduce
overall waste while achieving high quality. The press has four reversible
stations providing color flexibility including potential four-color back
printing in selected situations and is designed to accommodate alternative
printing technology on a station-by-station basis. The press is designed to dry
both water-based and solvent-based inks at full press speed. Currently, the use
of water-based inks is increasing as the printing industry moves to reduce its
output of volatile organic compounds (VOC's) created as the result of drying
solvent based inks.

         In 1994-95, after an analysis of projected future manufacturing
requirements, the Company installed new imagers, data stations and related
equipment incorporating significantly advanced technology for its existing
presses in its California and Georgia facilities at a total cost of
approximately $5 million. Such imagers materially increased the efficiency and
flexibility (and thus capacity) of the Company's existing presses.

         In 1995, the Company also installed an additional custom-designed
printing press, including new imagers, data stations and related equipment, in
its Georgia Facility. The total cost of the equipment and building expansion was
approximately $15.5 million. The new press is designed to employ both offset and
flexographic printing technologies and allows Scientific Games to more
economically produce smaller print runs than the existing two gravure presses,
by, among other things, reducing press set-up costs versus the existing two
gravure presses. The savings in operation of the third press are attributable
to, among other factors, the flexographic and offset technologies which use
photopolymer and aluminum plates rather than the engraved chrome plated
cylinders used in the gravure process.

         The Company has presses at the Leeds and Bradford Facilities located in
the United Kingdom. The Leeds Facility has five sheet-fed offset presses as well
as imaging and silk screen equipment. The Bradford Facility utilizes three
separate printing processes, which are an offset, inkjet and rotary screen. In
1997, the Company, after an analysis of projected future manufacturing
requirements, began installation of new imagers, data stations and related
equipment incorporating significantly advanced technology for its existing
presses at the Bradford Facility at a total retail cost of approximately $3.0
million. Such imagers were fully operational in March 1998 and are expected to
materially increase the efficiency and flexibility (and thus capacity) of the
Company's existing presses at the Bradford Facility.


ITEM 3.           LEGAL PROCEEDINGS

         The Company's SGI subsidiary owns a minority interest in Wintech de
Colombia S.A. ("Wintech"), which has operated the Colombian national lottery
under contract with Empresa Colombian de Recuros para la Salud, S.A.
("Ecosalud"), an agency of the Colombian government. The contract projected that
certain levels of lottery ticket sales would be attained, and provided a penalty
against Wintech, SGI and the other shareholders of up to


                                       16
<PAGE>   17
$5,000,000 if such levels were not achieved. In addition, with respect to the
further guarantee of performance under the contract with Ecosalud, SGI delivered
to Ecosalud a $4,000,000 bond issued by a Colombian surety. Wintech started the
instant lottery in Colombia but, due to difficulties beyond its control, the
projected sales level was not met for the year ending 1993. On July 1, 1993,
Ecosalud adopted resolutions declaring, among other things, that the contract
was in default and asserted various claims for compensation and penalties
against Wintech, SGI and shareholders of Wintech. As the Company has previously
disclosed in its filings with the Commission, litigation is pending in Colombia
concerning various claims among Ecosalud, Wintech and the Company relating to
the termination of the contracts with Ecosalud (the "Colombian Litigation").
Ecosalud's claims in the Colombian Litigation are for, among other things,
realization on the full amount of the penalty plus interest and costs of the
bond.

         SGI has consulted with Colombian counsel and been advised that SGI has
various legal defenses to Ecosalud's claims. SGI also has certain cross
indemnities and undertakings from the two other private shareholders of Wintech
for their respective shares of any liability to Ecosalud. That obligation is
secured in part by a $1,500,000 confirmed letter of credit in favor of SGI. The
Colombian surety which issued a $4,000,000 bond to Ecosalud under the contract
has reportedly paid $2,400,000 to Ecosalud under the bond, and made demand upon
SGI for that amount under the indemnity agreement entered into by the surety and
SGI. SGI declined to make or authorize any such payment and notified the surety
that any payment in response to Ecosalud's demand on the bond is at the surety's
risk. No suit by the Colombian surety has been filed to date. No assurance can
be given that the other shareholders of Wintech will, or have sufficient assets
to, honor their indemnity undertakings to SGI when the claims by Ecosalud
against SGI and Wintech are resolved in the even such claims result in any
liability.

         In June 1996, Ecosalud filed a complaint against the Company in the
Unites States District Court for the Northern District of Georgia, Atlanta
Division (the "Georgia Litigation"). Total damages claimed in the original
Complaint were "not less than $84,423,267." The Complaint also sought reasonable
attorneys' fees and costs allegedly pursuant to the contract. In response to the
complaint, SGI filed a motion to dismiss the action on multiple grounds,
including the mandatory arbitration clause contained within the contract.
Ecosalud then filed an "Amended Complaint" in which it withdrew its claim for in
excess of $84,000,000 and, instead, sought $5,000,000 under an "Executive
Title," a purported joint and several guarantee by the Company, Wintech and
other shareholders in Wintech that projected levels of lottery sales would be
attained. In addition, Ecosalud also sought attorneys' fees and interest on the
claim. SGI filed a motion to dismiss the Amended Complaint on the ground, inter
alia, that litigation involving the same subject matter is pending in Colombia,
the dispute is subject to an arbitration clause and forum non conveniens. On
March 19, 1997 judgment was entered on behalf of the Company. The Court
dismissed the action on the grounds that it was governed by the arbitration and
forum selecting clauses in the contract which require that all disputes be
settled either by arbitration in Colombia or in the administrative courts of
Colombia. The Court also dismissed the action on the grounds of lis alibi
pendens. On April 16, 1997, the Plaintiff filed a Notice of Appeal. The United
States Court of Appeals for the Eleventh Circuit heard oral argument on the
appeal of the dismissal of the complaint of Ecosalud on January 16, 1998 and
thereafter affirmed the holding of the trial Court. Ecosalud did not seek
reconsideration by the Eleventh Circuit; accordingly, the Georgia Litigation has
been concluded.

         SGI intends to vigorously defend the Colombian Litigation and has been
advised by counsel that the Company has numerous defenses on the merits, as well
as procedural defenses to the litigation. Although it is not possible to
determine the outcome of the litigation in Colombia, or the other related surety
and indemnity claims, management believes, based upon, among other things, the
advice of counsel, the advice of counsel that SGI has various defenses (which it
has asserted in response to such proceedings and claims), that adequate
provision has been made for such claims and the disposition thereof should not
have a material adverse effect on the Company's consolidated financial condition
or consolidated results of operations.


ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         No matter was submitted to a vote of security holders at any time
during the fourth quarter of the year ended December 31, 1997.


                                       17
<PAGE>   18
                                     PART II

ITEM 5.           MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
                  MATTERS

         In July 1997, the Company adopted a shareholders rights plan which
provided for the issuance to each holder of the Company's Common Stock, certain
rights (the "Rights") to purchase shares of the Company's redeemable Series A
Participating Cumulative Preferred Stock pursuant to the terms of a Rights
Agreement. Such rights are exercisable after distribution by holders other than
"Acquiring Persons" as defined in the Rights Agreement in the event of certain
ownership changes and in connection with certain business combinations. The
Rights may have certain anti-takeover effects. The Rights may cause substantial
dilution to a person that attempts to acquire the Company without a condition to
such an offer being that a substantial number of the Rights be acquired or that
the Rights be redeemed or declared invalid. The Rights should not interfere with
any merger or other business combination approved by the Board of Directors
(under some circumstances, with the concurrence of the Continuing Directors)
since the Rights may be redeemed by the Company. A copy of the Rights Agreement
and a more expansive summary of the provisions thereof is set forth in the
Company's Form 8-A/A with respect thereto, filed with the Commission on August
6, 1997.

         The information presented under the caption "Corporate Information" on
page 37 of the Company's 1997 Annual Report to Shareholders is incorporated
herein by reference.


ITEM 6            SELECTED FINANCIAL DATA

         The information presented under the caption "Five-Year Selected
Financial Data" on page 14 of the Company's 1997 Annual Report to Shareholders
is incorporated herein by reference.

ITEM 7            MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                  AND RESULTS OF OPERATIONS

         The information presented under the caption "Management's Discussion
and Analysis of Financial Condition and Results of Operations" on pages 15
through 22 of the Company's 1997 Annual Report to Shareholders is incorporated
herein by reference.

ITEM 8            FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The information presented under the caption's "Consolidated Statements
of Income", "Consolidated Balance Sheets", "Consolidated Statements of Cash
Flows", "Consolidated Statements of Shareholders' Equity", and "Notes to
Consolidated Financial Statements", on pages 23 - 35 of the Company's 1997
Annual Report to Shareholders is incorporated herein by reference.

ITEM 9            CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
                  AND FINANCIAL DISCLOSURE

         Not Applicable




                                       18
<PAGE>   19
                                    PART III

ITEM 10           DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         This information required by Item 10 is incorporated by reference from
the information in Registrant's proxy statement (filed or to be filed pursuant
to Regulation 14A) for its Annual Meeting of Stockholders to be held May 22,
1998, except as to biographical information on Executive Officers which is
contained in Item 1 of this Annual Report on Form 10-K.

ITEM 11           EXECUTIVE COMPENSATION

         The information required by Item 11 is incorporated by reference from
the information in Registrant's proxy statement (filed or to be filed pursuant
to Regulation 14A) for its Annual Meeting of Stockholders to be held May 22,
1998.

ITEM 12           SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The information required by Item 12 is incorporated by reference from
the information in Registrant's proxy statement (filed or to be filed pursuant
to Regulation 14A) for its Annual Meeting of Stockholders to be held May 22,
1998.

ITEM 13           CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The information required by Item 13 is incorporated by reference from
the information in Registrant's proxy statement (filed or to be filed pursuant
to Regulation 14A) for its Annual Meeting of Stockholders to be held May 22,
1998.




                                       19
<PAGE>   20
                                     PART IV

ITEM 14           EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
                  FORM 8-K

(a)(1)   Consolidated Financial Statements

         The following financial statements and notes thereto of Scientific
Games Holdings Corp. are incorporated in Item 8 by reference from the Company's
1997 Annual Report to Shareholders:

<TABLE>
<CAPTION>
                                                                                                            Page in Annual
                                                                                                        Report to Shareholders
                                                                                                        ----------------------
         <S>                                                                                            <C>
         Consolidated Statements of Income, Years ended December 31, 1997, 1996 and 1995                              23

         Consolidated Balance Sheets -- December 31, 1997 and 1996                                                     24

         Consolidated Statements of Cash Flows  -- Years ended December 31, 1997, 1996 and 1995                       25

         Consolidated Statements of Shareholders' Equity, Years ended December 31, 1997, 1996 and 1995                26

         Notes to Consolidated Financial Statements -- December 31, 1997                                            27-35

         Report of Independent Auditors                                                                               35
</TABLE>

(a)(2)   Financial Statement Schedules

         Schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable and therefore have been omitted.

(a)(3)   Reports on Form 8-K

         No reports on Form 8-K were filed during the fourth quarter of 1997.

(a)(4)   Listing of Exhibits

           The exhibits listed below are filed with or incorporated by reference
into this annual report on Form 10-K.

EXHIBIT NO.         DESCRIPTION OF EXHIBIT

3.1                    --  Second Amended and Restated Certificate of
                           Incorporation of Scientific Games Holdings Corp. with
                           Certificate of Designation
3.2                    --  Second Amended and Restated By-Laws of Scientific
                           Games Holdings Corp.(4)
10.2                   --  Agreement by and between the Massachusetts State
                           Lottery Commission and Scientific Games, Inc. dated
                           December 18, 1987 and extensions thereto(1)
10.6                   --  Employment Agreement ("Malloy Employment Agreement")
                           dated as of October 1, 1991 between Scientific Games
                           Operating Corp.(now known as Scientific Games Inc.)
                           and William G. Malloy(1)
10.7                   --  Employment Agreement ("Behm Employment Agreement")
                           dated as of October 1, 1991 between Scientific Games
                           Operating Corp.(now known as Scientific Games Inc.)
                           and William F. Behm(1)
10.8                   --  Employment Agreement ("Little Employment Agreement")
                           dated as of October 1, 1991 between Scientific Games
                           Operating Corp.(now known as Scientific Games Inc.)
                           and Thomas F. Little(1)
10.10                  --  Form of Promissory Note evidencing loans to
                           Management Stockholders(1)



                                       20
<PAGE>   21
10.16                  --  Second Amendment to Asset Purchase Agreement dated as
                           of October 1, 1991 between Bally Manufacturing
                           Corporation and Scientific Games Operating Corp. (now
                           known as Scientific Games Inc.)(re: Earnout)(1)
10.17                  --  Stockholders' Agreement dated as of July 1, 1993, as
                           amended(1)
10.18                  --  Amended First 1991 Management Stock Option Plan(1)
10.19                  --  Amended Second 1991 Management Stock Option Plan(1)
10.20                  --  1993 Management Stock Option Plan(1)
10.21                  --  Industrial Real Estate Lease dated December 4, 1984
                           between Arroyo One as Landlord and Scientific Games
                           Inc. as Tenant (Gilroy Lease), as amended(1)
10.22                  --  Lease dated April 27, 1987 between Kishimura Bros.
                           and Scientific Games of California, Inc. (Scientific
                           Games of California, Inc. assigned its leasehold
                           interest to Scientific Games Operating Corp., now
                           known as Scientific Games, Inc.), as amended(1)
10.23                  --  Form of Amendment to Malloy Employment Agreement(1)
10.24                  --  Form of Amendment to Behm Employment Agreement(1)
10.25                  --  Form of Amendment to Little Employment Agreement(1)
10.26                  --  Instant Ticket and Associated Products and Services
                           Agreement dated May 4, 1993 by and between Georgia
                           Lottery Corporation and Scientific Games, Inc.(4)
10.31                  --  Form of revised Severance Benefits Agreement(4)
10.32                  --  Amendment to Amended First 1991 Management Stock
                           Option Plan(4)
10.33                  --  Amendment to Amended Second 1991 Management Stock
                           Option Plan(4)
10.34                  --  Amendment to 1993 Management Stock Option Plan(4)
10.35                  --  First Amended and Restated 1993 Directors' Stock
                           Option Plan(4)
10.37                  --  1994 Management Stock Option Plan(6)
10.38                  --  1995/1996 Management Stock Option Plan(6)
10.39                  --  Key Employee Restricted Stock Option Plan(6)
10.40                  --  Severance Benefits Agreement dated as of May 5, 1995,
                           between Scientific Games Holdings Corp. and Cliff O.
                           Bickell(7)
10.42                  --  Key Employee Restricted Stock Plan(6)
10.43                  --  Form of Key Employee Restricted Stock Plan Restricted
                           Stock Award Agreement(7)
10.45                  --  Instant Lottery Tickets Supply Agreement between
                           Thomas De La Rue Limited, Scientific Games Inc. and
                           Camelot Group plc, dated June 15, 1995.(3)(8)
10.46                  --  Credit Agreement for Line of Credit From First Union
                           National Bank of Georgia to Scientific Games Holdings
                           Corp. and Scientific Games Inc. Dated: December 20,
                           1996(9)
10.47                  --  Rights Agreement dated as of July 10, 1997 between
                           Scientific Games Holdings Corp. and First Union
                           National Bank as Rights Agent(11)
10.48                  --  Amended Bank Credit Agreement
10.49                  --  1998 Employee Stock Purchase Plan, as amended and
                           restated
10.50                  --  Stock Purchase Agreement dated as of April 15, 1997,
                           by and between Scientific Games Holdings Corp. and
                           Autotote Corporation with Respect to All Outstanding
                           Capital Stock of Tele Control Kommunications - und
                           Computersysteme Gesellschaft m.b.h.
10.51                  --  Form of Amendment to Behm Employment Agreement
10.52                  --  Form of Amendment to Little Employment Agreement
11.0                   --  Statement re: computation of per share earnings(loss)
13.1                   --  1997 Annual Report to Shareholders pages 14, 15-35
                           and 37 only
21.0                   --  List of Subsidiaries of Registrant
23.0                   --  Consent of Independent Auditors
27.0                   --  Financial Data Schedule (for SEC use only)

--------------------

         (1)      Previously filed with Registration Statement No. 33-65582,
                  filed on July 2, 1993 or as subsequently amended on July 28,
                  1993, August 9, 1993 or August 20, 1993.


                                       21
<PAGE>   22
         (2)      Previously filed with the Company's Quarterly Report on Form
                  10-Q for the Quarter Ended September 30, 1993.
         (3)      Portions of Exhibits 10.28 and 10.43 deemed confidential by
                  the Company have been omitted, were filed separately with the
                  Commission and confidential treatment has been granted for
                  portions of these exhibits.
         (4)      Previously filed with the Company's Registration Statement No.
                  33-75168, filed on February 11, 1994 or as subsequently
                  amended on March 4, 1994.
         (5)      Previously filed with the Company's Annual Report on Form 10-K
                  for the year ended December 31, 1993.
         (6)      Previously filed with the Company's Annual Report on Form 10-K
                  for the year ended December 31, 1994.
         (7)      Previously filed with the Company's Quarterly Report on Form
                  10-Q for the quarter ended June 30, 1995.
         (8)      Previously filed with the Company's Quarterly Report on Form
                  10-Q for the quarter ended September 30, 1995.
         (9)      Previously filed with the Company's Annual Report on Form 10-K
                  for the year ended December 31, 1996.
         (10)     Previously filed with the Company's Current Report on Form 8-K
                  dated April 15, 1997 and filed with the Commission on June 30,
                  1997.
         (11)     Previously filed with the Company's Current Report of Form 8-K
                  8A/A dated August 6, 1997 and filed with the Commission on
                  such date.

(b)      Reports on Form 8-K:  none.

(c)      Executive Compensation Plans and Arrangements.

                    (i)       Employment Agreement ("Malloy Employment
                              Agreement") dated as of October 1, 1991 between
                              Scientific Games Operating Corp. (now known as
                              Scientific Games Inc.) and William G. Malloy,
                              Exhibit 10.6(1)
                    (ii)      Employment Agreement ("Behm Employment Agreement")
                              dated as of October 1, 1991 between Scientific
                              Games Operating Corp. (now known as Scientific
                              Games Inc.) and William F. Behm, Exhibit 10.7(1)
                    (iii)     Employment Agreement ("Little Employment
                              Agreement") dated as of October 1, 1991 between
                              Scientific Games Operating Corp. (now known as
                              Scientific Games Inc.) and Thomas F. Little,
                              Exhibit 10.8(1)
                    (iv)      Amended First 1991 Management Stock Option Plan,
                              Exhibit 10.18(1)
                    (v)       Amended Second 1991 Management Stock Option Plan,
                              Exhibit 10.19(1)
                    (vi)      1993 Management Stock Option Plan, Exhibit
                              10.20(1)
                    (vii)     Form of Amendment to Malloy Employment Agreement,
                              Exhibit 10.23(1)
                    (viii)    Form of Amendment to Behm Employment Agreement,
                              Exhibit 10.24(1)
                    (ix)      Form of Amendment to Little Employment Agreement,
                              Exhibit 10.25(1)
                    (x)       Form of revised Severance Benefits Agreement,
                              Exhibit 10.31(2)
                    (xi)      Amendment to Amended First 1991 Management Stock
                              Option Plan, Exhibit 10.32(2)
                    (xii)     Amendment to Amended Second 1991 Management Stock
                              Option Plan, Exhibit 10.33(2)
                    (xiii)    Amendment to 1993 Management Stock Option Plan,
                              Exhibit 10.34(2)
                    (xiv)     1994 Management Stock Option Plan, Exhibit
                              10.37(3)
                    (xv)      1995/1996 Management Stock Option Plan, Exhibit
                              10.38(3)
                    (xvi)     Severance Benefits Agreement dated as of May 5,
                              1995, between Scientific Games Holdings Corp and
                              Cliff O. Bickell, Exhibit 10.40(4)
                    (xvii)    Key Employee Restricted Stock Plan, Exhibit
                              10.42(3)
                    (xviii)   Form of Key Employee Restricted Stock Plan
                              Restricted Stock Award Agreement, Exhibit 10.43(4)
                    (xix)     Form of Amendment to Behm Employment Agreement,
                              Exhibit 10.51
                    (xx)      Form of Amendment to Little Employment Agreement,
                              Exhibit 10.52


                                       22
<PAGE>   23
------------------------------------

                    (1)       Previously filed with Registration Statement No.
                              33-65582, filed on July 2, 1993 or as subsequently
                              amended on July 28, 1993, August 9, 1993 or August
                              20, 1993.
                    (2)       Previously filed with Registration Statement No.
                              33-75168, filed on February 11, 1994 or as
                              subsequently amended on March 4, 1994.
                    (3)       Previously filed with the Company's Annual Report
                              on Form 10-K for the year ended December 31, 1994.
                    (4)       Previously filed with the Company's Annual Report
                              on Form 10-Q for the quarter ended June 30, 1995.






                                       23
<PAGE>   24
                                 SIGNATURE PAGE

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant, Scientific Games Holdings Corp. has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Alpharetta, and State of Georgia on this 31st day of
March, 1998.

                                             Scientific Games Holdings Corp.

                                             By: /s/ William G. Malloy
                                                 -------------------------------
                                             William G. Malloy, Chairman
                                             of the Board, President, and
                                             Chief Executive Officer

         Pursuant to the requirements of the Securities Act of 1934, this report
has been signed by the following persons on behalf of the Registrant, Scientific
Games Holdings Corp. in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signature                           Title                                        Date
---------                           -----                                        ----
<S>                                 <C>                                          <C>

/s/ William G. Malloy               Chairman of the Board, President,            March 31, 1998
------------------------------      and Chief Executive Officer
William G. Malloy                   (Principal Executive Officer)



/s/ Cliff O. Bickell                Chief Financial Officer,                     March 31, 1998
------------------------------      Vice President and Treasurer
Cliff O. Bickell                    (Principal Financial and Accounting
                                    Officer)



/s/ Paul F. Balser                  Director                                     March 31, 1998
------------------------------
Paul F. Balser



/s/ William F. Behm                 Director                                     March 31, 1998
------------------------------
William F. Behm



/s/ Mark E. Jennings                Director                                     March 31, 1998
------------------------------
Mark E. Jennings
</TABLE>




                                       24
<PAGE>   25
<TABLE>
<S>                                 <C>                                          <C>
/s/ Frank S. Jones                  Director                                     March 31, 1998
------------------------------
Frank S. Jones



/s/ Edith K. Manns                  Director                                     March 31, 1998
------------------------------
Edith K. Manns



/s/ Dennis L. Whipple               Director                                     March 31, 1998
------------------------------
Dennis L. Whipple
</TABLE>






                                       25