----

----

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

| o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|------------------------------------------------------------------------------------------|

| Minnesota                                                      |    | 41-1448495                        |
|----------------------------------------------------------------|---------|-----------------------------------|
| (State or Other Jurisdiction of Incorporation or Organization) |    | (IRS Employer Identification No.) |
|                                                           |    |                              |
| 1106 Palms Airport Drive, Las Vegas                            | NV      | 89119                             |
| (Address of Principal Executive Offices)                       | (State) | (Zip Code)                        |

| Title of each class                     | Name of each exchange on which registered |
|-----------------------------------------|-------------------------------------------|
| Common Stock, $0.01 par value per share | The NASDAQ Stock  Market LLC    |

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

----

----

----

SH

|     |                                                                                                               | Page   |
|----------|--------------------------------------------------------------------------------------------------------------------|--------|
|     |                                                                                                               |   |
|     | Forward Looking Statements                                                                                         |   |
|     | Part I                                                                                                             |   |
| Item 1.  | Business                                                                                                           | 5      |
| Item 1A. | Risk Factors                                                                                                       | 18     |
| Item 1B. | Unresolved Staff Comments                                                                                          | 25     |
| Item 2.  | Properties                                                                                                         | 25     |
| Item 3.  | Legal Proceedings                                                                                                  | 26     |
| Item 4.  | Submission of Matters to a Vote of Security Holders                                                                | 26     |
|     | Part II                                                                                                            |   |
| Item 5.  | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 27     |
| Item 6.  | Selected Financial Data                                                                                            | 29     |
| Item 7.  | Management’s Discussion and Analysis of Financial Condition and Results of Operations                        | 30     |
| Item 7A. | Quantitative and Qualitative Disclosures about Market Risk                                                         | 65     |
| Item 8.  | Financial Statements and Supplementary Data                                                                        | 66     |
| Item 9.  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                               | 104    |
| Item 9A. | Controls and Procedures                                                                                            | 104    |
| Item 9B. | Other Information                                                                                                  | 107    |
|     | Part III                                                                                                           |   |
| Item 10. | Directors, Executive Officers and Corporate Governance                                                             | 108    |
| Item 11. | Executive Compensation                                                                                             | 108    |
| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters                     | 108    |
| Item 13. | Certain Relationships and Related Transactions and Director Independence                                           | 108    |
| Item 14. | Principal Accounting Fees and Service                                                                              | 108    |
|     | Part IV                                                                                                            |   |
| Item 15. | Exhibits and Financial Statement Schedules                                                                         | 109    |

----

Table of Contents

| · | We are dependent on our intellectual property and trade secrets and we may be unable to protect our intellectual property and trade secrets from infringement, misappropriation, or claims of infringement or invalidity. Additionally, changes in the patent laws could adversely affect the validity or enforceability of one or more of our patents; |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | the gaming industry is highly regulated and we must adhere to various regulations and maintain our licenses to continue our operations.  Failure to obtain and/or maintain our licenses could be disruptive to our business and could adversely affect our operations; |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | a continued downturn in general worldwide economic conditions or in the gaming industry or a reduction in demand for gaming may adversely affect our results of operations.  As a result, the market price of our common stock may decline; |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | our domestic and global growth and ability to access capital markets are subject to a number of economic risks; |
|--------|-----------------------------------------------------------------------------------------------------------------|

| · | risks that impact our customers may impact us; |
|--------|------------------------------------------------|

| · | economic, political, legal and other risks associated with our international sales and operations could adversely affect our operating results; |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|

| · | litigation may subject us to significant legal expenses, damages and liability and is inherently unpredictable and risky; |
|--------|---------------------------------------------------------------------------------------------------------------------------|

| · | our products currently in development may not achieve commercial success and if we are unable to maintain a competitive technological position, we may suffer a material adverse effect on our business, results of operations or financial condition; |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | we compete in a single industry and our business may suffer if our products become obsolete or demand for them decreases, including without limitation, a result of the downturn in the gaming industry; |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | any disruption in our manufacturing processes, any significant increases in manufacturing costs or any inability to manufacture a sufficient number of our products to meet demand could adversely affect our business and operating results; |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | the products in each of our segments may experience losses due to technical difficulties or fraudulent activities; |
|--------|--------------------------------------------------------------------------------------------------------------------|

| · | we operate in a very competitive business environment and if we do not adapt our approach and our products to meet this demand, our business, results of operations or financial condition could be adversely impacted; |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | we are dependent on the success of our customers and are subject to industry fluctuations; |
|--------|--------------------------------------------------------------------------------------------|

| · | certain market risks may affect our business, results of operations and prospects; |
|--------|------------------------------------------------------------------------------------|

| · | we are exposed to interest rate and foreign currency risk; |
|--------|------------------------------------------------------------|

| · | we could face considerable business and financial risk in implementing acquisitions; |
|--------|--------------------------------------------------------------------------------------|

| · | if our products contain defects, our reputation could be harmed and our operating results and financial results could be adversely effected; |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | we may not be able to attract, retain, or motivate the management or employees necessary to remain competitive in our industry; |
|--------|---------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

| · | we may be unable to adequately comply with public reporting requirements; |
|--------|---------------------------------------------------------------------------|

| · | our continued compliance with our financial covenants in our Senior Secured Credit Facility is subject to many factors, some of which are beyond our control and if we are unable to remain compliant under our financial covenants, our results of operations could be adversely affected by servicing costs; |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | the restrictive covenants in our Senior Secured Credit Facility may limit our ability to finance future operations or capital needs or engage in other business activities that may be in our interest; and |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | our business is subject to quarterly fluctuation. |
|--------|---------------------------------------------------|

----

Table of Contents

IT

----

Table of Contents

|                       |   | Percentage of Total Revenue |   |
|----------------------------|--------|-----------------------------|--------|
| Product Segment            |   | 2009                        |   |   | 2008 |   |   | 2007 |   |
| Utility                    |   |                        | 40.0   | % |   |   | 42.5 | % |   |   | 43.9 | % |
| Proprietary Table Games    |   |                        | 21.6   | % |   |   | 20.3 | % |   |   | 18.5 | % |
| Electronic Table Systems   |   |                        | 12.4   | % |   |   | 14.5 | % |   |   | 15.5 | % |
| Electronic Gaming Machines |   |                        | 26.0   | % |   |   | 22.6 | % |   |   | 22.0 | % |
| Other revenue              |   |                        | 0.0    | % |   |   | 0.1 | % |   |   | 0.1 | % |
|                       |   |                        | 100.0  | % |   |   | 100.0 | % |   |   | 100.0 | % |

----

Table of Contents

|   | We will be a strategic partner to our customers.                                                            |
|--------|-------------------------------------------------------------------------------------------------------------|
|   | We will work diligently to meet our customers’ needs.                                                 |
|   | We will provide solutions, not just products.                                                               |
|   | We will never forget: we’re in the business of fun.                                                   |
|   | We will foster trust from the very first handshake.                                                         |
|   | We will provide innovative products.                                                                        |
|   | We will be tireless in our pursuit of excellence.                                                           |
|   | We will provide answers, not excuses.                                                                       |
|   | We will set a high bar for service.                                                                         |
|   | We will identify creative ways to improve our customers’ performance.                                 |
|   | We will collaborate with our customers to fuel their profitability.                                         |
|   | We will know we’ve reached our full potential when we’ve enabled our customers to reach theirs. |

| · | To focus on developing, manufacturing and marketing products that increase the speed, profitability, productivity and security of our casino and other customers in their table game operations. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | To develop and market shufflers with advanced features and capabilities, such as optical card recognition and deck validation, to replace older generation shufflers and to further penetrate domestic and foreign markets. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | To broaden our PTG segment by developing or acquiring additional table game content to increase our penetration of casino customers' table game operations. In addition, our analysis has shown that there exists a strong correlation between proprietary table game growth and demand for automatic shufflers. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | To develop a variety of felt-based and e-Table solutions to increase revenue from existing assets in the field by adding new proprietary features such as progressives and side bets. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | To market our e-Table platforms to provide a cost-effective brand extension of our PTG content to existing casino and new casino customers and to explore other venues in which the platforms could be reasonably modified to fulfill market demands. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

| · | To continue our commitment to develop new and exciting titles for our EGM products, allowing us to maintain our niche product offering. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------|

| · | To develop or acquire patents, licenses and other intellectual property both to broaden our product offerings and to vigorously protect our patents and products from potential infringement. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

----

Table of Contents

----

Table of Contents

----

Table of Contents

----

Table of Contents

----

Table of Contents

----

Table of Contents

----

Table of Contents

----

Table of Contents

----

Table of Contents

IT

----

Table of Contents

| · | be expensive and time consuming to defend; |
|--------|--------------------------------------------|

| · | cause one or more of our patents to be ruled or rendered unenforceable or invalid; |
|--------|------------------------------------------------------------------------------------|

| · | cause us to cease making, licensing or using products that incorporate the challenged intellectual property; |
|--------|--------------------------------------------------------------------------------------------------------------|

| · | require us to redesign, reengineer or rebrand our products; |
|--------|-------------------------------------------------------------|

| · | divert management's attention and resources; |
|--------|----------------------------------------------|

| · | require us to pay significant amounts in damages; |
|--------|---------------------------------------------------|

| · | require us to enter into royalty, licensing or settlement agreements in order to obtain the right to use a necessary product, process or component; |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| · | limit our ability to bring new products to the market in the future; or |
|--------|-------------------------------------------------------------------------|

| · | cause us by way of injunction to have to remove products on lease and/or stop selling or leasing new products. |
|--------|----------------------------------------------------------------------------------------------------------------|

----

Table of Contents

| · | adverse economic and market conditions in gaming markets such as those being currently experienced, including recession, economic slowdown, higher interest rates, higher airfares and higher energy and gasoline prices; |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | global geopolitical events such as terrorist attacks and other acts of war or hostility; |
|--------|------------------------------------------------------------------------------------------|

| · | natural disasters such as major fires, floods, hurricanes and earthquakes; and |
|--------|--------------------------------------------------------------------------------|

| · | concerns about H1N1 (Swine) virus, influenza or contagious illnesses. |
|--------|-----------------------------------------------------------------------|

----

Table of Contents

| · | changes in foreign currency exchange rates; |
|--------|---------------------------------------------|

| · | exchange controls; |
|--------|--------------------|

| · | changes in regulatory requirements, such as, without limitation, caps on the number of table games in locations such as Macau; |
|--------|--------------------------------------------------------------------------------------------------------------------------------|

| · | changes in a specific country's or region's political or economic conditions; |
|--------|-------------------------------------------------------------------------------|

| · | tariffs, other trade protection measures and import or export licensing requirements; |
|--------|---------------------------------------------------------------------------------------|

| · | potentially negative consequences from changes in tax laws or application of such tax laws; |
|--------|---------------------------------------------------------------------------------------------|

| · | difficulty in staffing and managing widespread operations; |
|--------|------------------------------------------------------------|

| · | changing labor regulations; |
|--------|-----------------------------|

| · | requirements relating to withholding taxes on remittances and other payments by subsidiaries; |
|--------|-----------------------------------------------------------------------------------------------|

| · | different regimes controlling the protection of our intellectual property and the ability for us to repossess our equipment or products in the event of a lease default; |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | restrictions on our ability to own or operate subsidiaries, make investments or acquire new businesses in these jurisdictions; |
|--------|--------------------------------------------------------------------------------------------------------------------------------|

| · | restrictions on our ability to repatriate dividends from our subsidiaries; and |
|--------|--------------------------------------------------------------------------------|

| · | the intellectual property laws in certain foreign countries provide for criminal penalties for actions that would be civil penalties in the United States and such criminal penalties may affect all of our gaming licenses. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

----

Table of Contents

----

Table of Contents

| · | in the integration of the operations, financial reporting, technologies, products and personnel, including those caused by national, geographic and cultural differences; |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | risks of entering markets in which we have no or limited prior experience; |
|--------|----------------------------------------------------------------------------|

| · | difficulties in the use, development or sale of intellectual property or future or present products; |
|--------|------------------------------------------------------------------------------------------------------|

| · | the potential loss of employees; |
|--------|----------------------------------|

| · | currency fluctuations or changes in exchange rates in connection with sales to customers and the purchase of inventory in foreign currencies; |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|

| · | diversion of management's attention away from other business concerns; |
|--------|------------------------------------------------------------------------|

| · | expenses of any undisclosed or potential legal liabilities; |
|--------|-------------------------------------------------------------|

| · | difficulties in staffing and managing worldwide operations; and |
|--------|-----------------------------------------------------------------|

| · | impairments in acquired assets. |
|--------|---------------------------------|

----

Table of Contents

IT

IT

----

Table of Contents

IT

IT

----

Table of Contents

IT

|           |   | 2009   |   |   | 2008   |   |
|----------------|--------|--------|--------|--------|--------|--------|
|           |   | High   |   |   | Low    |   |   | High |   |   | Low |   |
| First Quarter  |   | $      | 5.43   |   |   | $      | 2.50 |   |   | $ | 14.04 |   |   | $ | 7.77 |   |
| Second Quarter |   |   | 4.12   |   |   |   | 1.97 |   |   |   | 10.24 |   |   |   | 4.50 |   |
| Third Quarter  |   |   | 7.63   |   |   |   | 3.72 |   |   |   | 8.38 |   |   |   | 3.93 |   |
| Fourth Quarter |   |   | 9.90   |   |   |   | 6.67 |   |   |   | 5.89 |   |   |   | 2.60 |   |

----

Table of Contents

| Company Name / Index  |   | Investment Value as of October 31, |   |
|-----------------------|--------|------------------------------------|--------|
|                  |   | 2004                               |   |   | 2005 |   |   | 2006 |   |   | 2007 |   |   | 2008 |   |   | 2009 |   |
|                  |   |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shuffle Master, Inc.  |   |                               | 100.00 |   |   |   | 90.38 |   |   |   | 99.71 |   |   |   | 48.75 |   |   |   | 13.76 |   |   |   | 27.83 |   |
| S&P Smallcap 600  |   |                               | 100.00 |   |   |   | 115.27 |   |   |   | 133.83 |   |   |   | 149.28 |   |   |   | 100.85 |   |   |   | 106.46 |   |
| NASDAQ Composite      |   |                               | 100.00 |   |   |   | 107.75 |   |   |   | 122.18 |   |   |   | 146.93 |   |   |   | 86.70 |   |   |   | 104.97 |   |
| Dow Jones US Gambling |   |                               | 100.00 |   |   |   | 102.41 |   |   |   | 143.34 |   |   |   | 208.84 |   |   |   | 61.50 |   |   |   | 76.61 |   |
| Peer Group            |   |                               | 100.00 |   |   |   | 93.94 |   |   |   | 139.17 |   |   |   | 148.80 |   |   |   | 54.08 |   |   |   | 79.78 |   |

----

Table of Contents

IT

|                                                |   | Year Ended October 31,                            |    |
|-----------------------------------------------------|--------|--------------------------------------------------------|---------|
|                                                |   | 2009                                                   |    |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                                |   | (In thousands, except per share and unit/seat amounts) |    |
|                                                |   |                                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Summary financial statements (a):                   |   |                                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenue                                             |   |                                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Utility                                             |   | $                                                      | 71,707  |   |   | $ | 80,893 |   |   | $ | 78,457 |   |   | $ | 86,792 |   |   | $ | 67,029 |   |
| Proprietary Table Games                             |   |                                                   | 38,697  |   |   |   | 38,594 |   |   |   | 33,125 |   |   |   | 38,316 |   |   |   | 39,517 |   |
| Electronic Table Systems                            |   |                                                   | 22,342  |   |   |   | 27,461 |   |   |   | 27,890 |   |   |   | 16,555 |   |   |   | 6,022 |   |
| Electronic Gaming Machines                          |   |                                                   | 46,598  |   |   |   | 42,898 |   |   |   | 39,269 |   |   |   | 21,090 |   |   |   | - |   |
| Unallocated Corporate                               |   |                                                   | 83      |   |   |   | 160 |   |   |   | 110 |   |   |   | 238 |   |   |   | 292 |   |
|                                                |   |                                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total revenue                                       |   |                                                   | 179,427 |   |   |   | 190,006 |   |   |   | 178,851 |   |   |   | 162,991 |   |   |   | 112,860 |   |
| Cost of revenue                                     |   |                                                   | 73,756  |   |   |   | 79,104 |   |   |   | 74,985 |   |   |   | 56,721 |   |   |   | 29,260 |   |
| Gross profit                                        |   |                                                   | 105,671 |   |   |   | 110,902 |   |   |   | 103,866 |   |   |   | 106,270 |   |   |   | 83,600 |   |
| Income (Loss)  from continuing operations |   |                                                   | 15,459  |   |   |   | (10,802 | ) |   |   | 16,301 |   |   |   | 5,339 |   |   |   | 29,104 |   |
| Discontinued operations, net of tax                 |   |                                                   | -       |   |   |   | (1 | ) |   |   | 78 |   |   |   | (246 | ) |   |   | 76 |   |
| Net Income (loss)                                   |   | $                                                      | 15,459  |   |   | $ | (10,803 | ) |   | $ | 16,379 |   |   | $ | 5,093 |   |   | $ | 29,180 |   |
|                                                |   |                                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings (Loss) per share - continuing operations:  |   |                                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings (loss) per share, basic (b)                |   | $                                                      | 0.29    |   |   | $ | (0.27 | ) |   | $ | 0.47 |   |   | $ | 0.15 |   |   | $ | 0.83 |   |
| Earnings (loss) per share, diluted (b)              |   | $                                                      | 0.29    |   |   | $ | (0.27 | ) |   | $ | 0.46 |   |   | $ | 0.15 |   |   | $ | 0.80 |   |
| Weighted average shares, basic (b)                  |   |                                                   | 53,120  |   |   |   | 40,006 |   |   |   | 34,680 |   |   |   | 34,585 |   |   |   | 34,924 |   |
| Weighted average shares, diluted (b)                |   |                                                   | 53,449  |   |   |   | 40,006 |   |   |   | 35,276 |   |   |   | 36,052 |   |   |   | 36,378 |   |
|                                                |   |                                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance Sheet Data (end of year):                   |   |                                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash, cash equivalents, and investments             |   | $                                                      | 7,840   |   |   | $ | 5,374 |   |   | $ | 4,392 |   |   | $ | 8,917 |   |   | $ | 34,088 |   |
| Total assets                                        |   | $                                                      | 285,469 |   |   | $ | 261,946 |   |   | $ | 359,767 |   |   | $ | 305,207 |   |   | $ | 193,117 |   |
| Total debt                                          |   | $                                                      | 93,210  |   |   | $ | 125,149 |   |   | $ | 235,011 |   |   | $ | 234,991 |   |   | $ | 165,552 |   |
| Total long-term liabilities                         |   | $                                                      | 96,109  |   |   | $ | 86,428 |   |   | $ | 233,936 |   |   | $ | 164,367 |   |   | $ | 162,659 |   |
| Shareholders' equity                                |   | $                                                      | 156,074 |   |   | $ | 102,858 |   |   | $ | 87,634 |   |   | $ | 32,549 |   |   | $ | 13,400 |   |
|                                                |   |                                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash Flow Data:                                     |   |                                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash provided by operating activities               |   | $                                                      | 40,142  |   |   | $ | 44,018 |   |   | $ | 33,048 |   |   | $ | 34,021 |   |   | $ | 34,508 |   |
| Cash (used) by investing activities                 |   | $                                                      | (9,045  | ) |   | $ | (5,812 | ) |   | $ | (33,119 | ) |   | $ | (104,142 | ) |   | $ | (6,526 | ) |
| Cash (used) provided by financing activities        |   | $                                                      | (30,124 | ) |   | $ | (37,256 | ) |   | $ | (3,513 | ) |   | $ | 65,923 |   |   | $ | (35,027 | ) |

----

Table of Contents

IT

| · | We expect to continue to increase our lease revenues in our Utility segment within the United States.  Outside of the United States, we expect to continue to realize a large proportion of our Utility revenues from sales rather than leases.  This segment has a planned replacement cycle which, under normal circumstances, will typically drive a certain level of sales activity in any one period. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Our lease model is strongest in our PTG segment.  While we have strong leasing in the United States, we are looking to expand our proprietary table games in other parts of the world where the current penetration of proprietary table games is lower. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

| · | We expect to continue to increase our lease revenues in our ETS segment within the United States.  Outside of the United States, we expect to continue to realize a large proportion of our ETS revenues from sales rather than leases. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Our EGM segment is predominately a sales model and we expect to continue to realize substantially all of our EGM revenues from sales of EGMs in our primary market, Australasia. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

----

Table of Contents

| Effective settlement of lawsuit                                                      |   | $      | 400   |   |
|--------------------------------------------------------------------------------------|--------|--------|-------|--------|
| Inventory                                                                            |   |   | 122   |   |
| Patents (amortized over a 3 year period to Utility segment cost of goods sold)       |   |   | 850   |   |
| Covenant not to compete (amortized over a 7 year period to Utility segment SG&A) |   |   | 1,576 |   |
| Total consideration                                                                  |   | $      | 2,948 |   |

| · | persuasive evidence of an arrangement between us and our customer exists; |
|--------|---------------------------------------------------------------------------|

| · | shipment has occurred or services have been rendered; |
|--------|-------------------------------------------------------|

| · | the price is fixed or determinable; and |
|--------|-----------------------------------------|

| · | collectability is reasonably assured and/or probable. |
|--------|-------------------------------------------------------|

----

Table of Contents

| · | Whether the software is a significant focus of the marketing effort or is sold separately. |
|--------|--------------------------------------------------------------------------------------------|

| · | Whether post-contract customer support or PCS (PCS includes the right to receive services or unspecified upgrades/enhancements, or both, offered to users or resellers) is provided. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Whether the development and production costs of the software as a component of the cost of the product is incidental. |
|--------|-----------------------------------------------------------------------------------------------------------------------|

| · | Whether an agreement includes service elements (other than PCS related services), such as training or installation and whether such services are essential to the functionality of the software or whether such software is considered “off-the-shelf” (off-the-shelf software is software that is marketed as a stock item that can be used by customers with little or no customization). Conversely, “core software”requires significant customization of the software in order for the software to be used by the end customer. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | The delivered items have value to the customer on a stand alone basis; |
|--------|------------------------------------------------------------------------|

| · | we have objective and reliable evidence of the fair value of the undelivered items; and |
|--------|-----------------------------------------------------------------------------------------|

| · | delivery of any undelivered item is considered probable and substantially in our control. |
|--------|-------------------------------------------------------------------------------------------|

----

Table of Contents

----

Table of Contents

----

Table of Contents

|                                                |   | Year Ended October 31, |    |
|-----------------------------------------------------|--------|-----------------------------|---------|
|                                                |   | 2009                        |    |   | 2008 |   |   | 2007 |   |
|                                                |   | (In thousands)              |    |
| Revenue:                                            |   |                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Utility                                             |   | $                           | 71,707  |   |   |   | 40.0 | % |   | $ | 80,893 |   |   |   | 42.5 | % |   | $ | 78,457 |   |   |   | 43.9 | % |
| Proprietary Table Games                             |   |                        | 38,697  |   |   |   | 21.6 | % |   |   | 38,594 |   |   |   | 20.3 | % |   |   | 33,125 |   |   |   | 18.5 | % |
| Electronic Table Systems                            |   |                        | 22,342  |   |   |   | 12.4 | % |   |   | 27,461 |   |   |   | 14.5 | % |   |   | 27,890 |   |   |   | 15.5 | % |
| Electronic Gaming Machines                          |   |                        | 46,598  |   |   |   | 26.0 | % |   |   | 42,898 |   |   |   | 22.6 | % |   |   | 39,269 |   |   |   | 22.0 | % |
| Other                                               |   |                        | 83      |   |   |   | 0.0 | % |   |   | 160 |   |   |   | 0.1 | % |   |   | 110 |   |   |   | 0.1 | % |
|                                                |   |                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total revenue                                       |   |                        | 179,427 |   |   |   | 100.0 | % |   |   | 190,006 |   |   |   | 100.0 | % |   |   | 178,851 |   |   |   | 100.0 | % |
| Cost of revenue                                     |   |                        | 73,756  |   |   |   | 41.1 | % |   |   | 79,104 |   |   |   | 41.6 | % |   |   | 74,985 |   |   |   | 41.9 | % |
|                                                |   |                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross profit                                        |   |                        | 105,671 |   |   |   | 58.9 | % |   |   | 110,902 |   |   |   | 58.4 | % |   |   | 103,866 |   |   |   | 58.1 | % |
| Selling, general and administrative                 |   |                        | 63,647  |   |   |   | 35.5 | % |   |   | 71,350 |   |   |   | 37.6 | % |   |   | 61,947 |   |   |   | 34.6 | % |
| Research and development                            |   |                        | 17,349  |   |   |   | 9.7 | % |   |   | 18,474 |   |   |   | 9.7 | % |   |   | 17,337 |   |   |   | 9.7 | % |
| Impairment of goodwill                              |   |                        | -       |   |   |   | 0.0 | % |   |   | 22,137 |   |   |   | 11.7 | % |   |   | - |   |   |   | 0.0 | % |
|                                                |   |                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income (Loss) from operations                       |   |                        | 24,675  |   |   |   | 13.7 | % |   |   | (1,059 | ) |   |   | (0.6 | %) |   |   | 24,582 |   |   |   | 13.8 | % |
| Other income (expense):                             |   |                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income                                     |   |                        | 860     |   |   |   | 0.5 | % |   |   | 1,759 |   |   |   | 0.9 | % |   |   | 1,644 |   |   |   | 0.9 | % |
| Interest expense                                    |   |                        | (5,401  | ) |   |   | (3.0 | %) |   |   | (6,630 | ) |   |   | (3.5 | %) |   |   | (7,487 | ) |   |   | (4.2 | %) |
| Other, net                                          |   |                        | 731     |   |   |   | 0.4 | % |   |   | 1,261 |   |   |   | 0.7 | % |   |   | (4,131 | ) |   |   | (2.3 | %) |
| Total other income (expense)                        |   |                        | (3,810  | ) |   |   | (2.1 | %) |   |   | (3,610 | ) |   |   | (1.9 | %) |   |   | (9,974 | ) |   |   | (5.6 | %) |
| Gain on early extinguishment of debt                |   |                        | 1,961   |   |   |   | 1.1 | % |   |   | 1,773 |   |   |   | 0.9 | % |   |   | - |   |   |   | 0.0 | % |
| Impairment of investments                           |   |                        | -       |   |   |   | 0.0 | % |   |   | (1,560 | ) |   |   | (0.8 | %) |   |   | - |   |   |   | 0.0 | % |
| Equity method investment loss                       |   |                        | -       |   |   |   | 0.0 | % |   |   | - |   |   |   | 0.0 | % |   |   | (306 | ) |   |   | (0.2 | %) |
|                                                |   |                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income (Loss) from continuing operations before tax |   |                        | 22,826  |   |   |   | 12.7 | % |   |   | (4,456 | ) |   |   | (2.4 | %) |   |   | 14,302 |   |   |   | 8.0 | % |
| Income tax (benefit) provision                      |   |                        | 7,367   |   |   |   | 4.1 | % |   |   | 6,346 |   |   |   | 3.3 | % |   |   | (1,999 | ) |   |   | (1.1 | %) |
|                                                |   |                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income (Loss) from continuing operations            |   |                        | 15,459  |   |   |   | 8.6 | % |   |   | (10,802 | ) |   |   | (5.7 | %) |   |   | 16,301 |   |   |   | 9.1 | % |
| Discontinued operations, net of tax                 |   |                        | -       |   |   |   | 0.0 | % |   |   | (1 | ) |   |   | (0.0 | %) |   |   | 78 |   |   |   | 0.0 | % |
| Net income (loss)                                   |   | $                           | 15,459  |   |   |   | 8.6 | % |   | $ | (10,803 | ) |   |   | (5.7 | %) |   | $ | 16,379 |   |   |   | 9.1 | % |

----

Table of Contents

|                 |   | Year Ended October 31, |    |   | Percentage Change |   |
|----------------------|--------|------------------------|---------|--------|-------------------|--------|
|                 |   | 2009                   |    |   | 2008              |   |   | 2007 |   |   | 09 vs. 08 |   |   | 08 vs. 07 |   |
|                 |   | (In thousands)         |    |   |              |   |   |   |   |
| Revenue:             |   |                   |    |   |              |   |   |   |   |   |   |   |   |   |   |
| Leases and royalties |   | $                      | 76,258  |   |              | $      | 70,898 |   |   | $ | 56,426 |   |   |   | 7.6 | % |   |   | 25.6 | % |
| Sales and service    |   |                   | 103,113 |   |              |   | 118,948 |   |   |   | 122,315 |   |   |   | (13.3 | %) |   |   | (2.8 | %) |
| Other                |   |                   | 56      |   |              |   | 160 |   |   |   | 110 |   |   |   | (65.0 | %) |   |   | 45.5 | % |
|                 |   |                   |    |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                |   | $                      | 179,427 |   |              | $      | 190,006 |   |   | $ | 178,851 |   |   |   | (5.6 | %) |   |   | 6.2 | % |
|                 |   |                   |    |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost of revenue:     |   |                   |    |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Leases and royalties |   | $                      | 24,559  |   |              | $      | 21,866 |   |   | $ | 17,221 |   |   |   | 12.3 | % |   |   | 27.0 | % |
| Sales and service    |   |                   | 49,197  |   |              |   | 57,238 |   |   |   | 57,764 |   |   |   | (14.0 | %) |   |   | (0.9 | %) |
|                 |   |                   |    |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                |   | $                      | 73,756  |   |              | $      | 79,104 |   |   | $ | 74,985 |   |   |   | (6.8 | %) |   |   | 5.5 | % |
|                 |   |                   |    |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross profit:        |   |                   |    |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Leases and royalties |   | $                      | 51,699  |   |              | $      | 49,032 |   |   | $ | 39,205 |   |   |   | 5.4 | % |   |   | 25.1 | % |
| Sales and service    |   |                   | 53,916  |   |              |   | 61,710 |   |   |   | 64,551 |   |   |   | (12.6 | %) |   |   | (4.4 | %) |
| Other                |   |                   | 56      |   |              |   | 160 |   |   |   | 110 |   |   |   | (65.0 | %) |   |   | 45.5 | % |
|                 |   |                   |    |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Total          |   | $                      | 105,671 |   |              | $      | 110,902 |   |   | $ | 103,866 |   |   |   | (4.7 | %) |   |   | 6.8 | % |
|                 |   |                   |    |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross margin:        |   |                   |    |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Leases and royalties |   |                   | 67.8    | %      |              |   | 69.2 | % |   |   | 69.5 | % |   |   |   |   |   |   |   |   |
| Sales and service    |   |                   | 52.3    | %      |              |   | 51.9 | % |   |   | 52.8 | % |   |   |   |   |   |   |   |   |
| Total                |   |                   | 58.9    | %      |              |   | 58.4 | % |   |   | 58.1 | % |   |   |   |   |   |   |   |   |

|   | o | The strengthening of the U.S. dollar of 10.0% and 15.0%, respectively, to the Euro and the Australian dollar, resulted in a reduction in revenues of $10,135.  These decreases primarily impacted sales and service revenues in our EGM, ETS and Utility segments |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | A decrease of approximately 21.8% in the Utility segment primarily representing a reduction in sales in the European market. The European market has experienced credit market deterioration, smoking bans and the dissolution of the Russian gaming market due to regulatory changes |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | A decrease of approximately 42.2% in the ETS segment due to declines in sales of our Vegas Star and Rapid Table Games products in Australia and our Table Master™ products in the United States |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | The ETS segment provided the largest increase at 28.8% due to increased Table Master™ seats on lease |
|--------|---|------------------------------------------------------------------------------------------------------------|

|   | o | The Utility segment demonstrated an 8.2% increase due to placements of our i-Deal shuffler |
|--------|---|--------------------------------------------------------------------------------------------|

|   | o | The PTG segment increased 1.2% due to growth in our Ultimate Texas Hold’em® premium title and Fortune Pai Gow Poker Progressive |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | A  7.8% increase in revenue driven primarily by the strength of our newer titles and the success of our progressive links, Pink Panther and Grand Central |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

|   | o | A proportionate increase in lease and royalty revenue which generates higher gross margins than sales and service revenue primarily driven by increased placements and average lease prices |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | Increased average sales prices, primarily in our Utility segment and EGM segment, on a local currency basis |
|--------|---|-------------------------------------------------------------------------------------------------------------|

|   | o | The strength of the U.S. dollar negatively impacted margins by 3.1% |
|--------|---|---------------------------------------------------------------------|

| · | Write-down for inventory obsolescence |
|--------|---------------------------------------|

|   | o | A decrease in gross margin of approximately 0.8% related to lower of cost or market adjustments primarily on older generation products.  These were mostly in the Utility and ETS Segments. |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Impact of foreign currency fluctuations |
|--------|-----------------------------------------|

|   | o | The weakening of the U.S. dollar of 12.1% and 8.1%, respectively, to the Euro and the Australian dollar, resulted in an increase in revenues of $6,018.  These increases occurred primarily in sales and service revenues in our EGM, Utility and ETS segments |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Increases in lease revenues |
|--------|-----------------------------|

|   | o | Increases in our PTG revenue generating lease base resulted in a 29.5% increase in PTG royalties. This increase was due in part to the approximate 600 unit installed base that we acquired in connection with the purchase of PGIC’s TGD business |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | ETS lease revenue grew 60.1% and Utility lease revenue grew 13.8% due to increases in placements as well as increases in our average monthly lease prices |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Mix of revenue |
|--------|----------------|

|   | o | Sales of our EGMs and the associated parts and peripherals increased 9.3% due to the strength of our newer game titles which led to increased average sales prices |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Reduction in sales |
|--------|--------------------|

|   | o | Consistent with our lease strategy, a concerted effort to reduce sales in our Utility, PTG and ETS segments |
|--------|---|-------------------------------------------------------------------------------------------------------------|

| · | Mix of revenue |
|--------|----------------|

|   | o | A proportionate increase in lease and royalty revenue which generates higher gross margins than sales and service revenue primarily driven by increased placements and higher average lease prices |
|--------|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Introductory pricing on our i-Deal shuffler |
|--------------------|---------------------------------------------|

| ·   | An increase in non-cash amortization related to the acquisition of the PGIC TGD in late fiscal 2007 and other product-related intangibles of Stargames and CARD, which increased over the prior-year period |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

|                                |   | Year Ended October 31, |   |   | Percentage Change |   |
|-------------------------------------|--------|-----------------------------|--------|--------|-------------------|--------|
|                                |   | 2009                        |   |   | 2008              |   |   | 2007 |   |   | 09 vs. 08 |   |   | 08 vs. 07 |   |
|                                |   | (In thousands)              |   |   |              |   |   |   |   |
|                                |   |                        |   |   |              |   |   |   |   |   |   |   |   |   |   |
| Selling, general and administrative |   | $                           | 63,647 |   |              | $      | 71,350 |   |   | $ | 61,947 |   |   |   | (10.8 | %) |   |   | 15.2 | % |
| Percentage of revenue               |   |                        | 35.5   | %      |              |   | 37.6 | % |   |   | 34.6 | % |   |   |   |   |   |   |   |   |
|                                |   |                        |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Research and development            |   | $                           | 17,349 |   |              | $      | 18,474 |   |   | $ | 17,337 |   |   |   | (6.1 | %) |   |   | 6.6 | % |
| Percentage of revenue               |   |                        | 9.7    | %      |              |   | 9.7 | % |   |   | 9.7 | % |   |   |   |   |   |   |   |   |
|                                |   |                        |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Impairment of goodwill              |   | $                           | -      |   |              | $      | 22,137 |   |   |   | - |   |   |   | (100.0 | %) |   |   | 100.0 | % |
| Percentage of revenue               |   |                        | 0.0    | %      |              |   | 11.7 | % |   |   | 0.0 | % |   |   |   |   |   |   |   |   |
|                                |   |                        |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                |   |                        |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total operating expenses            |   | $                           | 80,996 |   |              | $      | 111,961 |   |   | $ | 79,284 |   |   |   | (27.7 | %) |   |   | 41.2 | % |
| Percentage of revenue               |   |                        | 45.1   | %      |              |   | 58.9 | % |   |   | 44.3 | % |   |   |   |   |   |   |   |   |

|   | o | Net decreases of approximately $2,262 at our foreign subsidiaries due to the strengthening of the U.S. dollar |
|--------|---|---------------------------------------------------------------------------------------------------------------|

|   | o | Decreased costs of approximately $9,521, excluding cash salary and related benefits severance costs, due to cost rationalization efforts |
|--------|---|------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | Severance costs of $6,838, which primarily related to the retirement of our former CEO and the departure of several senior executives.  The $6,838 of severance costs were primarily comprised of $3,628 of accelerated stock compensation expense and $3,210 of cash salary and related benefits |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | Decreased legal expenses of $2,214, excluding the effect of the Elixir item discussed below.  Corporate legal expense decreased as a result of lower legal expenses incurred on our shareholder derivative and VendingData II lawsuits, settlement of prior cases, which primarily included MP Games LLC, and decreased costs related to other general corporate matters |
|--------|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | Decreased costs of approximately $1,500 for professional fees, primarily related to reductions in accounting and other professional fees |
|--------|---|------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | Legal charge of $400 related to the Elixir purchase and settlement agreement, which approximates the fair value of the effective settlement related to the previous lawsuit between us and Elixir |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Impact of foreign currency fluctuations |
|--------|-----------------------------------------|

|   | o | Net decreases of approximately $1,114 at our foreign subsidiaries due to the strengthening of the U.S. dollars |
|--------|---|----------------------------------------------------------------------------------------------------------------|

| · | Utility |
|--------|---------|

|   | o | Expenses primarily related to finalizing the mechanical, hardware and software development of the i-Shoe Auto featuring optical card recognition and an auto-card feeding mechanism, finalizing hardware and software for the one2six Plus continuous shuffler featuring optical card recognition and developing and improving other Utility products, including developing generic card recognition technology to replace card libraries.  AdditionalR&D efforts were focused on developing the i-Score Baccarat display system, including new computer hardware |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

| · | PTG |
|--------|-----|

|   | o | Expenses primarily related to development of implementing progressives onto existing proprietary games as well as developing or licensing a large variety of new games including Dealer Bluff Six Card Poker |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | Additional R&D efforts were spent on developing the Video Progressive Display System (“ViPS”) to support our PTG progressive products |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | ETS |
|--------|-----|

|   | o | Expenses primarily related to the final development of the i-Table, our first product that benefited from an emphasis on “globalizing” our research and development by combining resources from our Utility, PTG and ETS segments and utilizing product knowledge from both our U.S. operations as well as our operations in Australia |
|--------|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | Additional R&D efforts were spent on creating and implementing new game content for our Table Master, Vegas Star and Rapid Table Games |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------|

| · | EGM |
|--------|-----|

|   | o | Expenses primarily related to development of new game titles and themes. This was in conjunction with the continued commercialization of existing linked jackpot products, “Pink Panther” and “Grand Central” |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Salaries, benefits and consultants |
|--------|------------------------------------|

|   | o | Personnel costs increased $6,545, due to staffing our newly established corporate division, adding to the sales and service staff in our Shuffle Master Americas division and expanding into new territories, including South Africa |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | Severance costs of approximately $1,023 associated with the departure of a senior executive at our corporate office, in addition to other subsidiary senior management |
|--------|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Facility |
|--------|----------|

|   | o | Additional costs of $2,413 associated with increased facilities and office-related expenses for our Shuffle Master Asia division |
|--------|---|----------------------------------------------------------------------------------------------------------------------------------|

| · | Impact of foreign currency fluctuation |
|--------|----------------------------------------|

|   | o | Net increases of approximately $1,978 at our foreign subsidiaries due to the weakening of the U.S. dollar |
|--------|---|-----------------------------------------------------------------------------------------------------------|

| · | Other |
|--------|-------|

|   | o | A write-off of prepaid licensing costs of $1,124, in fiscal 2008 associated with the abandonment of a project |
|--------|---|---------------------------------------------------------------------------------------------------------------|

| · | Total SG&A expenses were offset by a gain of $738 recognized on the sale of our fractional ownership in a Net Jets, Inc. (“Net Jets”) corporate airplane. Effective February 27, 2008, we sold our interest in the airplane. This sale, carried out as part of our strategic initiative to monetize certain non-core assets, resulted in proceeds of approximately $1,309 |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Professional fees |
|--------|-------------------|

|   | o | Corporate legal expense marginally decreased $154, or 2.6%, in fiscal 2008 as compared to fiscal 2007.  Corporate legal expense decreased as a result of lower legal expenses incurred on our pending cases, which primarily included VendingData II and Awada, as well as settlement of prior cases in fiscal 2008, which primarily included MP Games LLC |
|--------|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Corporate Products Group (“CPG”) was formed in the fourth quarter 2007 and is responsible for overseeing the creation and development of our existing and future product lines as well as overseeing our global products R&D. In fiscal 2008, approximately $1,266 was expended by the newly formed CPG as compared to $233, in fiscal 2007, primarily for general operational purposes |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Impact of foreign currency fluctuation |
|--------|----------------------------------------|

|   | o | Net increases of approximately $566 at our foreign subsidiaries due to the weakening of the U.S. dollar |
|--------|---|---------------------------------------------------------------------------------------------------------|

----

Table of Contents

| · | Utility |
|--------|---------|

|   | o | Expenses primarily related to the development of the i-Deal shuffler and the development of the i-Shoe Auto featuring optical card recognition and an auto-card feeding mechanism |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | Expenses related to value engineering of the one2six and future Utility product offerings |
|--------|---|-------------------------------------------------------------------------------------------|

| · | PTG |
|--------|-----|

|   | o | Expenses primarily related to development of content for our progressives for placement onto existing proprietary games such as Fortune Pai Gow Poker Progressive and Three Card Poker Progressive |
|--------|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | ETS |
|--------|-----|

|   | o | Expenses primarily related to the development of Vegas Star Craps, a fully electronic craps game with touch screen roll-of-the-dice capability |
|--------|---|------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | Additional R&D efforts were spent on creating and implementing new video dealers for our Table Master platform |
|--------|---|--------------------------------------------------------------------------------------------------------------------|

| · | EGM |
|--------|-----|

|   | o | Expenses primarily related to the continued development of our PC4 platform and development of new game titles and themes |
|--------|---|---------------------------------------------------------------------------------------------------------------------------|

|   | o | Additional R&D efforts were focused on continued commercialization of existing linked jackpot products, “Pink Panther” and “Grand Central” |
|--------|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

|                |   | Year Ended October 31, |   |   | Percentage Change |   |
|---------------------|--------|-----------------------------|--------|--------|-------------------|--------|
|                |   | 2009                        |   |   | 2008              |   |   | 2007 |   |   | 09 vs. 08 |   |   | 08 vs. 07 |   |
|                |   | (In thousands)              |   |   |              |   |   |   |   |
| Gross margin:       |   |                        |   |   |              |   |   |   |   |   |   |   |   |   |   |
| Depreciation        |   | $                           | 7,312  |   |              | $      | 5,929 |   |   | $ | 5,266 |   |   |   | 23.3 | % |   |   | 12.6 | % |
| Amortization        |   |                        | 10,481 |   |              |   | 12,037 |   |   |   | 9,725 |   |   |   | (12.9 | %) |   |   | 23.8 | % |
| Total               |   |                        | 17,793 |   |              |   | 17,966 |   |   |   | 14,991 |   |   |   | (1.0 | %) |   |   | 19.8 | % |
|                |   |                        |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating expenses: |   |                        |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation        |   |                        | 2,632  |   |              |   | 2,780 |   |   |   | 2,833 |   |   |   | (5.3 | %) |   |   | (1.9 | %) |
| Amortization        |   |                        | 3,090  |   |              |   | 2,694 |   |   |   | 1,597 |   |   |   | 14.7 | % |   |   | 68.7 | % |
| Total               |   |                        | 5,722  |   |              |   | 5,474 |   |   |   | 4,430 |   |   |   | 4.5 | % |   |   | 23.6 | % |
|                |   |                        |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total:              |   |                        |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation        |   |                        | 9,944  |   |              |   | 8,709 |   |   |   | 8,099 |   |   |   | 14.2 | % |   |   | 7.5 | % |
| Amortization        |   |                        | 13,571 |   |              |   | 14,731 |   |   |   | 11,322 |   |   |   | (7.9 | %) |   |   | 30.1 | % |
| Total               |   | $                           | 23,515 |   |              | $      | 23,440 |   |   | $ | 19,421 |   |   |   | 0.3 | % |   |   | 20.7 | % |

----

Table of Contents

|                                      |   | Year Ended October 31, |   |   | Percentage Change |   |
|-------------------------------------------|--------|-----------------------------|--------|--------|-------------------|--------|
|                                      |   | 2009                        |   |   | 2008              |   |   | 2007 |   |   | 09 vs. 08 |   |   | 08 vs. 07 |   |
|                                      |   | (In thousands)              |   |   |              |   |   |   |   |
| Other income (expense)                    |   |                        |   |   |              |   |   |   |   |   |   |   |   |   |   |
| Interest income                           |   | $                           | 860    |   |              | $      | 1,759 |   |   | $ | 1,644 |   |   |   | (51.1 | %) |   |   | 7.0 | % |
| Interest expense                          |   |                        | (5,401 | )      |              |   | (6,630 | ) |   |   | (7,487 | ) |   |   | 18.5 | % |   |   | 11.4 | % |
| Other, net                                |   |                        | 731    |   |              |   | 1,261 |   |   |   | (4,131 | ) |   |   | (42.0 | %) |   |   | 130.5 | % |
| Total other income (expense)              |   | $                           | (3,810 | )      |              | $      | (3,610 | ) |   | $ | (9,974 | ) |   |   | (5.5 | %) |   |   | 63.8 | % |
|                                      |   |                        |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gain on early extinguishment of debt, net |   | $                           | 1,961  |   |              | $      | 1,773 |   |   | $ | - |   |   |   | 10.6 | % |   |   | 100.0 | % |
|                                      |   |                        |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Impairment of investment                  |   | $                           | -      |   |              | $      | (1,560 | ) |   | $ | - |   |   |   | 100.0 | % |   |   | (100.0 | %) |

| · | A decrease in interest expense of $1,229 in fiscal 2009 as compared to fiscal 2008, due to a decrease in total outstanding debt balance and reduced effective interest rates |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Net foreign currency gains of $825 in fiscal 2009 as compared to net foreign currency gains of $3,356 in fiscal 2008.  This year over year change was caused by foreign currency fluctuations, primarily between the U.S. dollar, the Australian dollar and the Euro during fiscal 2009.  Our foreign subsidiaries engage in activities with us and certain customers in U.S. dollar and other foreign denominated contracts.As of our third quarter of fiscal 2008, we made the decision to begin settling all inter-company trade balances, which has resulted in the recognition of additional foreign currency fluctuations in our consolidated statement of operations |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Partially offset by a reduction in interest income of $899, in fiscal 2009 as compared to fiscal 2008, due to 50.8% reduction in the total amount of our investment in sales-type leases and notes receivable |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Gain on early extinguishment of debt, net of $1,961 and $1,773, respectively, relate to the following: |
|--------|--------------------------------------------------------------------------------------------------------|

|   | o | Fiscal 2009 includes approximately $1,800 related to the PGIC / IGT agreements entered into in January 2009.  See Acquisitions and Other Significant Transactions for more information |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | Fiscal 2008 includes a net gain realized from the early extinguishment of our Notes |
|--------|---|-------------------------------------------------------------------------------------|

|   | · | Net foreign currency gains of $3,356 in fiscal 2008 as compared to net foreign currency losses of $1,336 in fiscal 2007.  This year over year change was caused by foreign currency fluctuations, primarily between the U.S. dollar, the Australian dollar and the Euro during fiscal 2009.  Our foreign subsidiaries engage in activities with us and certain customers in U.S. dollars and other foreign denominatedcontracts. As of our third quarter of fiscal 2008, we began net settling all inter-company trade balances, which has resulted in the recognition of additional foreign currency fluctuations in our consolidated statement of operations |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | A decrease in interest expense of $857 in fiscal 2008 as compared to fiscal 2007.  Interest expense in fiscal 2008 primarily related to interest on our Revolver, Term Loan and Notes.  Interest expense in fiscal 2007 primarily related to interest on our Revolver and our Notes.  Interest expense decreased as the outstanding balance of our Revolver and Notes decreased as well as a decreasein the effective interest rate on the Revolver |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

|   | · | A net gain of $1,773 was realized from the early extinguishment of our Notes in fiscal 2008, pursuant to the Tender Offer discussed in Note 2 in “Item 8. Financial Statements and Supplementary Data” included in this Form 10-K.  The gain on the early extinguishment of our Notes was net of direct costs associated with the Tender Offer |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | During our third quarter ended July 31, 2008, we analyzed our cost method investment in Sona and, due to the severity and duration in the decline in fair value, we recorded a $1,486 impairment write-down, as we determined that the investment was other than temporarily impaired.  This impairment write-down represented the difference between our historical book value and fair market value at July 31, 2008.  Additionally,we sold our investment in Sona in the fourth quarter of fiscal 2008 and recorded an additional pre-tax loss of $74 in impairment of investments, net of $65 proceeds received from the sale, for a total of $1,560, which is reflected in the consolidated statement of operations included in “Item 8. Financial Statements and Supplemental Data” in the Form 10-K for fiscal 2008.  There were no such impairment losses recorded during fiscal 2007 |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                           |   | Year Ended October 31, |   |   | Percentage Change |   |
|--------------------------------|--------|-----------------------------|--------|--------|-------------------|--------|
|                           |   | 2009                        |   |   | 2008              |   |   | 2007 |   |   | 09 vs. 08 |   |   | 08 vs. 07 |   |
|                           |   | (In thousands)              |   |   |              |   |   |   |   |
|                           |   |                        |   |   |              |   |   |   |   |   |   |   |   |   |   |
| Income tax provision (benefit) |   | $                           | 7,367  |   |              | $      | 6,346 |   |   | $ | (1,999 | ) |   |   | 16.1 | % |   |   | (417.5 | %) |
|                           |   |                        |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Effective tax rate             |   |                        | 32.3   | %      |              |   | 142.4 | % |   |   | (14.0 | %) |   |   |   |   |   |   |   |   |

|   | · | For the fiscal year ended October 31, 2008, we recognized no tax benefit on the impairment of $22,137 of goodwill.  Excluding the impact of this goodwill impairment, the effective tax rate for the year ended October 31, 2008 would have been 35.9% |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The decrease in the effective tax rate, excluding the impact of the goodwill impairment, in fiscal 2009 relates primarily to the derecognition of uncertain tax positions |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | For the fiscal year ended October 31, 2008, we recognized no tax benefit on the impairment of $22,137 of goodwill.  Excluding the impact of this goodwill impairment, the effective tax rate for the year ended October 31, 2008 would have been 35.9%.  For the fiscal year ended October 31, 2007, a $6,707 decrease to income tax expense and corresponding increase to deferred tax assets were recorded toaccount for additional tax basis recognized in conjunction with newly enacted Australian tax consolidation rules |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The increase in the effective tax rate, excluding the goodwill impairment and Australian tax consolidation rules impact, in fiscal 2008 relates to the implementation of uncertain tax positions |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

----

Table of Contents

|                             |   | Year Ended                                                 |   |   |     |   |   |       |   |
|----------------------------------|--------|------------------------------------------------------------|--------|--------|----------|--------|--------|------------|--------|
|                             |   | October 31,                                           |   |   | Increase |   |   | Percentage |   |
|                             |   | 2009                                                       |   |   | 2008     |   |   | (Decrease) |   |   | Change |   |
|                             |   | (In thousands, except for units and per unit/seat amounts) |   |
| Utility Segment Revenue:         |   |                                                       |   |   |     |   |   |       |   |   |   |   |
| Lease                            |   | $                                                          | 30,443 |   |     | $      | 28,145 |       |   | $ | 2,298 |   |   |   | 8.2 | % |
| Sales - Shuffler                 |   |                                                       | 29,301 |   |     |   | 37,738 |       |   |   | (8,437 | ) |   |   | (22.4 | ) |
| Sales - Chipper                  |   |                                                       | 1,500  |   |     |   | 3,992  |       |   |   | (2,492 | ) |   |   | (62.4 | ) |
| Service                          |   |                                                       | 6,998  |   |     |   | 6,718  |       |   |   | 280 |   |   |   | 4.2 |   |
| Other                            |   |                                                       | 3,465  |   |     |   | 4,300  |       |   |   | (835 | ) |   |   | (19.4 | ) |
| Total sales and service          |   |                                                       | 41,264 |   |     |   | 52,748 |       |   |   | (11,484 | ) |   |   | (21.8 | ) |
| Total Utility segment revenue    |   | $                                                          | 71,707 |   |     | $      | 80,893 |       |   | $ | (9,186 | ) |   |   | (11.4 | %) |
|                             |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| Utility segment gross profit     |   | $                                                          | 40,513 |   |     | $      | 46,097 |       |   | $ | (5,584 | ) |   |   | (12.1 | %) |
| Utility segment gross margin     |   |                                                       | 56.5   | %      |     |   | 57.0   | %          |   |   |   |   |   |   |   |   |
|                             |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| Utility segment operating income |   | $                                                          | 32,742 |   |     | $      | 36,078 |       |   | $ | (3,336 | ) |   |   | (9.2 | %) |
| Utility segment operating margin |   |                                                       | 45.7   | %      |     |   | 44.6   | %          |   |   |   |   |   |   |   |   |
|                             |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
|                             |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| Shuffler unit information:       |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| Lease units, end of year         |   |                                                       | 5,697  |   |     |   | 5,318  |       |   |   | 379 |   |   |   | 7.1 | % |
| Average monthly lease price      |   | $                                                          | 445    |   |     | $      | 441    |       |   | $ | 4 |   |   |   | 1.0 | % |
|                             |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| Sold units during the period     |   |                                                       | 1,997  |   |     |   | 2,624  |       |   |   | (627 | ) |   |   | (23.9 | %) |
| Average sales price              |   | $                                                          | 14,673 |   |     | $      | 14,382 |       |   | $ | 291 |   |   |   | 2.0 | % |
|                             |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| Chipper unit information:        |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| Lease units, end of year         |   |                                                       | 36     |   |     |   | 26     |       |   |   | 10 |   |   |   | 38.5 | % |
|                             |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| Sold during year                 |   |                                                       | 71     |   |     |   | 154    |       |   |   | (83 | ) |   |   | (53.9 | %) |
| Average sales price              |   | $                                                          | 21,127 |   |     | $      | 25,922 |       |   | $ | (4,795 | ) |   |   | (18.5 | %) |

|   | o | A reduction in shuffler and chipper sales in the European market which has experienced credit market deterioration, smoking bans and the dissolution of the Russian gaming market due to regulatory changes |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | Reduction in sold shuffler units in markets outside of Europe, offset by a slight increase in average sales prices |
|--------|---|--------------------------------------------------------------------------------------------------------------------|

|   | o | Reduction in sold Chipmaster units, which have a higher sale price than our Easy Chipper® C |
|--------|---|--------------------------------------------------------------------------------------------------|

|   | o | Increased units on lease, mostly our i-Deal and one2six shufflers due to our replacement cycle and lease strategy |
|--------|---|-------------------------------------------------------------------------------------------------------------------|

|   | o | Increased average monthly lease price |
|--------|---|---------------------------------------|

|   | o | The overall reduction in sale revenue which generally generates a higher initial gross profit, but a lower gross margin |
|--------|---|-------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

| · | Non-cash charges |
|--------|------------------|

|   | o | A 16.6% decrease in amortization expense associated with the one2six shuffler and Easy Chipper, due to foreign currency fluctuations. In local currency, amortization decreased 7.1% |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | A decrease in gross margin of approximately 0.4% related to lower of cost or market adjustments primarily on older generation products |
|--------|---|----------------------------------------------------------------------------------------------------------------------------------------|

|                             |   | Year Ended                                                 |   |   |     |   |   |       |   |
|----------------------------------|--------|------------------------------------------------------------|--------|--------|----------|--------|--------|------------|--------|
|                             |   | October 31,                                           |   |   | Increase |   |   | Percentage |   |
|                             |   | 2008                                                       |   |   | 2007     |   |   | (Decrease) |   |   | Change |   |
|                             |   | (In thousands, except for units and per unit/seat amounts) |   |
| Utility Segment Revenue:         |   |                                                       |   |   |     |   |   |       |   |   |   |   |
| Lease                            |   | $                                                          | 28,145 |   |     | $      | 24,728 |       |   | $ | 3,417 |   |   |   | 13.8 | % |
| Sales - Shuffler                 |   |                                                       | 37,738 |   |     |   | 42,197 |       |   |   | (4,459 | ) |   |   | (10.6 | ) |
| Sales - Chipper                  |   |                                                       | 3,992  |   |     |   | 2,582  |       |   |   | 1,410 |   |   |   | 54.6 |   |
| Service                          |   |                                                       | 6,718  |   |     |   | 5,631  |       |   |   | 1,087 |   |   |   | 19.3 |   |
| Other                            |   |                                                       | 4,300  |   |     |   | 3,319  |       |   |   | 981 |   |   |   | 29.6 |   |
| Total sales and service          |   |                                                       | 52,748 |   |     |   | 53,729 |       |   |   | (981 | ) |   |   | (1.8 | ) |
| Total Utility segment revenue    |   | $                                                          | 80,893 |   |     | $      | 78,457 |       |   | $ | 2,436 |   |   |   | 3.1 | % |
|                             |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| Utility segment gross profit     |   | $                                                          | 46,097 |   |     | $      | 48,086 |       |   | $ | (1,989 | ) |   |   | (4.1 | %) |
| Utility segment gross margin     |   |                                                       | 57.0   | %      |     |   | 61.3   | %          |   |   |   |   |   |   |   |   |
|                             |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| Utility segment operating income |   | $                                                          | 36,078 |   |     | $      | 33,783 |       |   | $ | 2,295 |   |   |   | 6.8 | % |
| Utility segment operating margin |   |                                                       | 44.6   | %      |     |   | 43.1   | %          |   |   |   |   |   |   |   |   |
|                             |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
|                             |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| Shuffler unit information:       |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| Lease units, end of year         |   |                                                       | 5,318  |   |     |   | 4,986  |       |   |   | 332 |   |   |   | 6.7 | % |
| Average monthly lease price      |   | $                                                          | 441    |   |     | $      | 413    |       |   | $ | 28 |   |   |   | 6.7 | % |
|                             |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| Sold during year                 |   |                                                       | 2,624  |   |     |   | 3,076  |       |   |   | (452 | ) |   |   | (14.7 | %) |
| Average sales price              |   | $                                                          | 14,382 |   |     | $      | 13,718 |       |   | $ | 664 |   |   |   | 4.8 | % |
|                             |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| Chipper unit information:        |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| Lease units, end of year         |   |                                                       | 26     |   |     |   | 17     |       |   |   | 9 |   |   |   | 52.9 | % |
|                             |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| Sold during year                 |   |                                                       | 154    |   |     |   | 101    |       |   |   | 53 |   |   |   | 52.5 | % |
| Average sales price              |   | $                                                          | 25,922 |   |     | $      | 25,564 |       |   | $ | 358 |   |   |   | 1.4 | % |

| · | A 13.8% increase in Utility lease revenue |
|--------|-------------------------------------------|

|   | o | A 6.7% increase in leased units due to our replacement cycle and lease strategy |
|--------|---|---------------------------------------------------------------------------------|

|   | o | A 6.7% increase in average monthly lease price |
|--------|---|------------------------------------------------|

| · | A 54.6% increase in chipper sales revenue |
|--------|-------------------------------------------|

|   | o | A net increase of 52.5% sold units |
|--------|---|------------------------------------|

|   | o | An increase in the average sales price driven primarily by increased sales of Chipmaster units, which have a higher sale price than our Easy Chipper® C |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | A 19.3% increase in service revenue |
|--------|-------------------------------------|

----

Table of Contents

| · | A decrease in the number of sold shufflers although at increased average sales prices |
|--------|---------------------------------------------------------------------------------------|

| · | A decrease in conversion of leased shufflers to sold shufflers of 266 units from 418 units |
|--------|--------------------------------------------------------------------------------------------|

| · | Introductory pricing on new products, such as our i-Deal shuffler |
|--------|-------------------------------------------------------------------|

| · | The continued reduction in leased shuffler conversions which traditionally generate higher gross margins |
|--------|----------------------------------------------------------------------------------------------------------|

| · | An increase in amortization expense associated with the one2six shuffler and Easy Chipper to $5,763 for fiscal 2008 as compared to $4,555 for fiscal 2007 |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | A reduction of approximately $1,000 in legal costs specifically related to the Utility segment |
|--------|------------------------------------------------------------------------------------------------|

----

Table of Contents

|                                |   | Year Ended                                                 |   |   |     |   |   |       |   |
|-------------------------------------|--------|------------------------------------------------------------|--------|--------|----------|--------|--------|------------|--------|
|                                |   | October 31,                                           |   |   | Increase |   |   | Percentage |   |
|                                |   | 2009                                                       |   |   | 2008     |   |   | (Decrease) |   |   | Change |   |
|                                |   | (In thousands, except for units and per unit/seat amounts) |   |
|                                |   |                                                       |   |   |     |   |   |       |   |   |   |   |
| PTG segment revenue:                |   |                                                       |   |   |     |   |   |       |   |   |   |   |
| Royalties and leases                |   | $                                                          | 34,048 |   |     | $      | 33,639 |       |   | $ | 409 |   |   |   | 1.2 | % |
| Sales                               |   |                                                       | 3,581  |   |     |   | 4,332  |       |   |   | (751 | ) |   |   | (17.3 | ) |
| Service                             |   |                                                       | 170    |   |     |   | 276    |       |   |   | (106 | ) |   |   | (38.4 | ) |
| Other                               |   |                                                       | 898    |   |     |   | 347    |       |   |   | 551 |   |   |   | 1.6 |   |
| Total sales and service revenue     |   |                                                       | 4,649  |   |     |   | 4,955  |       |   |   | (306 | ) |   |   | (6.2 | ) |
| Total PTG segment revenue           |   | $                                                          | 38,697 |   |     | $      | 38,594 |       |   | $ | 103 |   |   |   | 0.3 | % |
|                                |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| PTG segment gross profit            |   | $                                                          | 32,079 |   |     | $      | 31,983 |       |   | $ | 96 |   |   |   | 0.3 | % |
| PTG segment gross margin            |   |                                                       | 82.9   | %      |     |   | 82.9   | %          |   |   |   |   |   |   |   |   |
|                                |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| PTG segment operating income        |   | $                                                          | 29,035 |   |     | $      | 28,957 |       |   | $ | 78 |   |   |   | 0.3 | % |
| PTG segment operating margin        |   |                                                       | 75.0   | %      |     |   | 75.0   | %          |   |   |   |   |   |   |   |   |
|                                |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
|                                |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| PTG unit information:               |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| Premium units, end of year          |   |                                                       | 2,241  |   |     |   | 2,245  |       |   |   | (4 | ) |   |   | (0.2 | %) |
| Side bet units, end of year         |   |                                                       | 1,646  |   |     |   | 1,806  |       |   |   | (160 | ) |   |   | (8.9 | %) |
| Progressive units, end of year      |   |                                                       | 359    |   |     |   | 137    |       |   |   | 222 |   |   |   | 162.0 | % |
| Add-on units, end of year           |   |                                                       | 39     |   |     |   | 34     |       |   |   | 5 |   |   |   | 14.7 | % |
| Total revenue generating lease base |   |                                                       | 4,285  |   |     |   | 4,222  |       |   |   | 63 |   |   |   | 1.5 | % |
|                                |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| Average monthly lease/license price |   | $                                                          | 662    |   |     | $      | 664    |       |   | $ | (2 | ) |   |   | (0.3 | %) |
|                                |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| Sold during year                    |   |                                                       | 165    |   |     |   | 154    |       |   |   | 11 |   |   |   | 7.1 | % |
| Average sales price                 |   | $                                                          | 21,703 |   |     | $      | 28,130 |       |   | $ | (6,427 | ) |   |   | (22.8 | %) |

| · | Increase in PTG royalty and lease revenue and other revenue |
|--------|-------------------------------------------------------------|

|   | o | Increased placements of premium table games, specifically our Ultimate Texas Hold’em |
|--------|---|--------------------------------------------------------------------------------------------|

|   | o | Increased placements of add-ons, specifically Fortune Pai Gow Poker Progressive |
|--------|---|---------------------------------------------------------------------------------|

|   | o | Average monthly lease price remained relatively flat, even with increased placements of progressive units, which generally have a lower monthly average lease price than premium game titles |
|--------|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | An increase in net revenue from our Three Card Poker World Championship Tournament, which was held in December 2008, to approximately $580 from $130 |
|--------|---|------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | A 17.3% decrease in PTG sales revenue |
|--------|---------------------------------------|

|   | o | A decrease in average sales price resulting from the sale of approximately 80 Royal Match 21 table game side bet lifetime licenses in 2009. Excluding this sale, our average sales price would have been approximately $38,800, an increase over 2008 driven by two large conversion sales of Three Card Poker table games in 2009 |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | A reduction of $368 related to license fees for the use of certain of our proprietary table game content on certain legalized internet gaming sites to $195 in fiscal 2009 as compared to fiscal 2008 |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | PTG gross profit and gross margin  remained constant year over year |
|--------|-------------------------------------------------------------------------------|

| · | PTG operating income and operating margin remained constant year over year |
|--------|----------------------------------------------------------------------------|

----

Table of Contents

|                                |   | Year Ended                                                 |   |   |     |   |   |       |   |
|-------------------------------------|--------|------------------------------------------------------------|--------|--------|----------|--------|--------|------------|--------|
|                                |   | October 31,                                           |   |   | Increase |   |   | Percentage |   |
|                                |   | 2008                                                       |   |   | 2007     |   |   | (Decrease) |   |   | Change |   |
|                                |   | (In thousands, except for units and per unit/seat amounts) |   |
|                                |   |                                                       |   |   |     |   |   |       |   |   |   |   |
| PTG segment revenue:                |   |                                                       |   |   |     |   |   |       |   |   |   |   |
| Royalties and leases                |   | $                                                          | 33,639 |   |     | $      | 25,974 |       |   | $ | 7,665 |   |   |   | 29.5 | % |
| Sales                               |   |                                                       | 4,332  |   |     |   | 6,980  |       |   |   | (2,648 | ) |   |   | (37.9 | ) |
| Service                             |   |                                                       | 276    |   |     |   | 157    |       |   |   | 119 |   |   |   | 75.8 |   |
| Other                               |   |                                                       | 347    |   |     |   | 14     |       |   |   | 333 |   |   |   | 2,378.6 |   |
| Total sales and service revenue     |   |                                                       | 4,955  |   |     |   | 7,151  |       |   |   | (2,196 | ) |   |   | (30.7 | ) |
| Total PTG segment revenue           |   | $                                                          | 38,594 |   |     | $      | 33,125 |       |   | $ | 5,469 |   |   |   | 16.5 | % |
|                                |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| PTG segment gross profit            |   | $                                                          | 31,983 |   |     | $      | 28,154 |       |   | $ | 3,829 |   |   |   | 13.6 | % |
| PTG segment gross margin            |   |                                                       | 82.9   | %      |     |   | 85.0   | %          |   |   |   |   |   |   |   |   |
|                                |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| PTG segment operating income        |   | $                                                          | 28,957 |   |     | $      | 23,465 |       |   | $ | 5,492 |   |   |   | 23.4 | % |
| PTG segment operating margin        |   |                                                       | 75.0   | %      |     |   | 70.8   | %          |   |   |   |   |   |   |   |   |
|                                |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
|                                |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| PTG unit information:               |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| Premium units, end of year          |   |                                                       | 2,245  |   |     |   | 2,145  |       |   |   | 100 |   |   |   | 4.7 | % |
| Side bet units, end of year         |   |                                                       | 1,806  |   |     |   | 1,861  |       |   |   | (55 | ) |   |   | (3.0 | %) |
| Progressive units, end of year      |   |                                                       | 137    |   |     |   | -      |       |   |   | 137 |   |   |   | 100.0 | % |
| Add-on units, end of year           |   |                                                       | 34     |   |     |   | 36     |       |   |   | (2 | ) |   |   | (5.6 | %) |
| Total revenue generating lease base |   |                                                       | 4,222  |   |     |   | 4,042  |       |   |   | 180 |   |   |   | 4.5 | % |
|                                |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| Average monthly lease/license Price |   | $                                                          | 664    |   |     | $      | 536    |       |   | $ | 128 |   |   |   | 24.0 | % |
|                                |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| Sold during year                    |   |                                                       | 154    |   |     |   | 204    |       |   |   | (50 | ) |   |   | (24.5 | %) |
| Average sales price                 |   | $                                                          | 28,130 |   |     | $      | 34,216 |       |   | $ | (6,086 | ) |   |   | (17.8 | %) |

| · | A 29.5% increase in PTG royalty and lease revenue |
|--------|---------------------------------------------------|

|   | o | A $4,648 increase related to the approximate 600 unit revenue generating lease base that we acquired in connection with the purchase of PGIC’s TGD business in late fiscal 2007 |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | A 9.6% increase related to growth in our traditional non-PGIC table games. This primarily relates to increases of our Ultimate Texas Hold’em and Fortune Pai Gow Poker table games |
|--------|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | An increase in the average monthly lease price |
|--------|---|------------------------------------------------|

|   | o | An increase of 100% in progressive units, primarily related to the increase in our Fortune Pai Gow Poker Progressive |
|--------|---|----------------------------------------------------------------------------------------------------------------------|

|   | o | A 15.0% increase to $563 related to license fees for the use of certain of our proprietary table game content on certain legalized internet gaming sites in fiscal 2008 as compared to fiscal 2007 |
|--------|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | A 37.9% decrease in PTG sales revenue |
|--------|---------------------------------------|

|   | o | A net decrease of 24.5% of sold units comprised primarily of decreases of our Three Card Poker and Four Card Poker table games |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------|

|   | o | A decrease in average sales price as a result of selling approximately 90 Fortune Pai Gow Poker table games in fiscal 2008 and the sale of certain lifetime licenses through an Asian distributor |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | A decrease of 42.9% of conversions from leased to sold table games in fiscal 2008, comprised primarily of decreases of our Three Card Poker and Four Card Poker table game conversions |
|--------|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | The increase in PTG gross profit was a result of the royalty and lease revenue increases offset by the decrease in sold royalty units discussed above |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

| · | The decrease in PTG gross margin was due to a full year of amortization associated with the PGIC TGD acquired in late 2007 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

| · | The decrease in conversions noted above.  Conversions traditionally generate higher gross margins |
|--------|-------------------------------------------------------------------------------------------------------------|

| · | The increased gross profit referred to above |
|--------|----------------------------------------------|

| · | Notwithstanding the decline in gross margin referred to above, operating income and operating margin were favorably impacted by a reduction of approximately $960 of R&D and legal costs specifically related to our PTG segment |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

|                            |   | Year Ended                                                 |   |   |     |   |    |       |   |
|---------------------------------|--------|------------------------------------------------------------|--------|--------|----------|--------|---------|------------|--------|
|                            |   | October 31,                                           |   |   | Increase |   |    | Percentage |   |
|                            |   | 2009                                                       |   |   | 2008     |   |    | (Decrease) |   |   | Change |   |
|                            |   | (In thousands, except for units and per unit/seat amounts) |   |
| ETS segment revenue:            |   |                                                       |   |   |     |   |    |       |   |   |   |   |
| Royalties and leases            |   | $                                                          | 11,730 |   |     | $      | 9,110   |       |   | $ | 2,620 |   |   |   | 28.8 | % |
| Sales                           |   |                                                       | 8,326  |   |     |   | 14,911  |       |   |   | (6,585 | ) |   |   | (44.2 | ) |
| Service                         |   |                                                       | 509    |   |     |   | 405     |       |   |   | 104 |   |   |   | 25.7 |   |
| Other                           |   |                                                       | 1,777  |   |     |   | 3,035   |       |   |   | (1,258 | ) |   |   | (41.4 | ) |
| Total sales and service revenue |   |                                                       | 10,612 |   |     |   | 18,351  |       |   |   | (7,739 | ) |   |   | (42.2 | ) |
| Total ETS segment revenue       |   | $                                                          | 22,342 |   |     | $      | 27,461  |       |   | $ | (5,119 | ) |   |   | (18.6 | %) |
|                            |   |                                                       |   |   |     |   |    |       |   |   |   |   |   |   |   |   |
| ETS segment gross profit        |   | $                                                          | 9,430  |   |     | $      | 13,068  |       |   | $ | (3,638 | ) |   |   | (27.8 | %) |
| ETS segment gross margin        |   |                                                       | 42.2   | %      |     |   | 47.6    | %          |   |   |   |   |   |   |   |   |
|                            |   |                                                       |   |   |     |   |    |       |   |   |   |   |   |   |   |   |
| ETS segment operating income    |   | $                                                          | 3,427  |   |     | $      | (16,105 | )          |   | $ | 19,532 |   |   |   | (121.3 | %) |
| ETS segment operating margin    |   |                                                       | 15.3   | %      |     |   | (58.6   | %)         |   |   |   |   |   |   |   |   |
|                            |   |                                                       |   |   |     |   |    |       |   |   |   |   |   |   |   |   |
| ETS unit information:           |   |                                                       |   |   |     |   |    |       |   |   |   |   |   |   |   |   |
| Lease seats, end of year        |   |                                                       | 2,134  |   |     |   | 1,445   |       |   |   | 689 |   |   |   | 47.7 | % |
| Average monthly lease price     |   | $                                                          | 458    |   |     | $      | 525     |       |   | $ | (67 | ) |   |   | (12.8 | %) |
|                            |   |                                                       |   |   |     |   |    |       |   |   |   |   |   |   |   |   |
| Sold during year                |   |                                                       | 440    |   |     |   | 740     |       |   |   | (300 | ) |   |   | (40.5 | %) |
| Average sales price             |   | $                                                          | 18,923 |   |     | $      | 20,150  |       |   | $ | (1,227 | ) |   |   | (6.1 | %) |

| · | Impact of foreign exchange fluctuations |
|--------|-----------------------------------------|

|   | o | Total revenue was negatively impacted by $1,292 due to the exchange effect of a strengthening U.S. dollar. |
|--------|---|------------------------------------------------------------------------------------------------------------|

| · | A 43.7% decrease in sales and other revenue |
|--------|---------------------------------------------|

|   | o | A 80.4% decline in the number of Table Master™ sold seats consistent with our lease strategy |
|--------|---|----------------------------------------------------------------------------------------------------|

|   | o | A decrease in the average sales price. This decrease was driven primarily by fluctuations in the exchange rate between the Australian dollar and the U.S. dollar related to our Vegas Star and Rapid Table Game products sold in Australia.  The average sales price in Australian dollars remained constant from the prior year period |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | A 41.4% decrease in parts and other peripheral sales related to previously sold ETS seats, primarily relating to our Vegas Star products and secondarily relating to our Rapid Table Games |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | A 28.8% increase in royalty and lease revenue |
|--------|-----------------------------------------------|

|   | o | A 47.7% increase in seats on lease, driven mostly by Table Master™ seats.  These leases are primarily our Royal Match 21, Three Card Poker and Bet The Set 21 proprietary games |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | Offset by a decrease in our average monthly lease price caused by installations of our ETS product in markets where they compete with live table games |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Fixed amortization |
|--------|--------------------|

|   | o | The ETS segment is burdened with substantial amounts of fixed amortization which can have a large impact on gross margin depending on total revenue.  Accordingly, gross margin can vary materially from period to period.  Gross margin in the current period was negatively impacted by 7.2% |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Mix of revenue |
|--------|----------------|

|   | o | The decreases in sales revenue as noted above |
|--------|---|-----------------------------------------------|

|   | o | Sale of refurbished units at reduced prices and reduced margins |
|--------|---|-----------------------------------------------------------------|

|   | o | The decrease in other revenue, primarily parts and other peripherals, as noted above.  Parts and other peripheral sales generally have a higher margin than completed units |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

| · | The $22,137 impairment of goodwill associated with our ETS segment in fiscal 2008, which did not recur in 2009 |
|--------|----------------------------------------------------------------------------------------------------------------|

|   | o | Excluding the impact of the impairment, operating margin in 2008 would have been 22.0%. The 6.7% decrease in margin, excluding the impact of the goodwill impairment, related to the decreases in both operating income and operating margin as discussed above |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                            |   | Year Ended                                                 |    |   |     |   |   |       |   |
|---------------------------------|--------|------------------------------------------------------------|---------|--------|----------|--------|--------|------------|--------|
|                            |   | October 31,                                           |    |   | Increase |   |   | Percentage |   |
|                            |   | 2008                                                       |    |   | 2007     |   |   | (Decrease) |   |   | Change |   |
|                            |   | (In thousands, except for units and per unit/seat amounts) |    |
|                            |   |                                                       |    |   |     |   |   |       |   |   |   |   |
| ETS segment revenue:            |   |                                                       |    |   |     |   |   |       |   |   |   |   |
| Royalties and leases            |   | $                                                          | 9,110   |   |     | $      | 5,691  |       |   | $ | 3,419 |   |   |   | 60.1 | % |
| Sales                           |   |                                                       | 14,911  |   |     |   | 19,535 |       |   |   | (4,624 | ) |   |   | (23.7 | ) |
| Service                         |   |                                                       | 405     |   |     |   | 373    |       |   |   | 32 |   |   |   | 8.6 |   |
| Other                           |   |                                                       | 3,035   |   |     |   | 2,291  |       |   |   | 744 |   |   |   | 32.5 |   |
| Total sales and service revenue |   |                                                       | 18,351  |   |     |   | 22,199 |       |   |   | (3,848 | ) |   |   | (17.3 | ) |
| Total ETS segment revenue       |   | $                                                          | 27,461  |   |     | $      | 27,890 |       |   | $ | (429 | ) |   |   | (1.5 | %) |
|                            |   |                                                       |    |   |     |   |   |       |   |   |   |   |   |   |   |   |
| ETS segment gross profit        |   | $                                                          | 13,068  |   |     | $      | 13,891 |       |   | $ | (823 | ) |   |   | (5.9 | %) |
| ETS segment gross margin        |   |                                                       | 47.6    | %      |     |   | 49.8   | %          |   |   |   |   |   |   |   |   |
|                            |   |                                                       |    |   |     |   |   |       |   |   |   |   |   |   |   |   |
| ETS segment operating income    |   | $                                                          | (16,105 | )      |     | $      | 6,600  |       |   | $ | (22,705 | ) |   |   | (344.0 | %) |
| ETS segment operating margin    |   |                                                       | (58.6   | %)     |     |   | 23.7   | %          |   |   |   |   |   |   |   |   |
|                            |   |                                                       |    |   |     |   |   |       |   |   |   |   |   |   |   |   |
| ETS unit information:           |   |                                                       |    |   |     |   |   |       |   |   |   |   |   |   |   |   |
| Lease seats, end of year        |   |                                                       | 1,445   |   |     |   | 1,096  |       |   |   | 349 |   |   |   | 31.8 | % |
| Average monthly lease price     |   | $                                                          | 525     |   |     | $      | 433    |       |   | $ | 92 |   |   |   | 21.4 | % |
|                            |   |                                                       |    |   |     |   |   |       |   |   |   |   |   |   |   |   |
| Sold during year                |   |                                                       | 740     |   |     |   | 918    |       |   |   | (178 | ) |   |   | (19.4 | %) |
| Average sales price             |   | $                                                          | 20,150  |   |     | $      | 21,280 |       |   | $ | (1,130 | ) |   |   | (5.3 | %) |

| · | A 23.7% decrease in ETS sales revenue |
|--------|---------------------------------------|

|   | o | A 45.3% decrease in sold Vegas Star seats driven primarily by decreased demand for our older Vegas Star classic cabinet in Australia |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------|

|   | o | A 5.3% decrease in the average sales price due to sales to a South American distributor |
|--------|---|-----------------------------------------------------------------------------------------|

| · | Impact of foreign currency fluctuations |
|--------|-----------------------------------------|

|   | o | Total revenue was favorably impacted by $1,151 due to foreign currency fluctuations between the U.S. dollar and the Australian dollar |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------|

| · | A 60.1% increase in lease and royalty revenue |
|--------|-----------------------------------------------|

|   | o | A 31.8% increase in seats on lease, driven mostly by Table Master™ seats.  These leases are primarily our Royal Match 21, Three Card Poker and Ultimate Texas Hold’em proprietary games |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Ø | This increase is primarily related to the five-year exclusive agreement with the Delaware State Lottery System as well as several properties in Nevada and Pennsylvania |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | A 21.4% increase in the average monthly lease price |
|--------|---|-----------------------------------------------------|

| · | A 32.5% increase in other revenue related to sales of parts and other peripherals related to previously sold Vegas and Rapid seats |
|--------|------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

| · | Increase of approximately $1,400 in depreciation associated with new leased units |
|--------|-----------------------------------------------------------------------------------|

| · | Increased installation costs of approximately $400 on newly placed leased units |
|--------|---------------------------------------------------------------------------------|

| · | The $22,137 impairment of goodwill associated with our ETS segment, as previously referred to in the discussion of our operating expenses |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

|                            |   | Year Ended                                                 |   |   |     |   |   |       |   |
|---------------------------------|--------|------------------------------------------------------------|--------|--------|----------|--------|--------|------------|--------|
|                            |   | October 31,                                           |   |   | Increase |   |   | Percentage |   |
|                            |   | 2009                                                       |   |   | 2008     |   |   | (Decrease) |   |   | Change |   |
|                            |   | (In thousands, except for units and per unit/seat amounts) |   |
|                            |   |                                                       |   |   |     |   |   |       |   |   |   |   |
| EGM segment revenue:            |   |                                                       |   |   |     |   |   |       |   |   |   |   |
| Lease revenue                   |   | $                                                          | 45     |   |     | $      | -      |       |   | $ | 45 |   |   |   | (100.0 | %) |
| Sales                           |   |                                                       | 35,502 |   |     |   | 32,946 |       |   |   | 2,556 |   |   |   | 7.8 |   |
| Other                           |   |                                                       | 11,051 |   |     |   | 9,952  |       |   |   | 1,099 |   |   |   | 11.0 |   |
| Total sales and service revenue |   |                                                       | 46,553 |   |     |   | 42,898 |       |   |   | 3,655 |   |   |   | 8.5 |   |
| Total EGM segment revenue       |   | $                                                          | 46,598 |   |     | $      | 42,898 |       |   | $ | 3,700 |   |   |   | 8.6 | % |
|                            |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| EGM segment gross profit        |   | $                                                          | 23,643 |   |     | $      | 19,662 |       |   | $ | 3,981 |   |   |   | 20.2 | % |
| EGM segment gross margin        |   |                                                       | 50.7   | %      |     |   | 45.8   | %          |   |   |   |   |   |   |   |   |
|                            |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| EGM segment operating income    |   | $                                                          | 16,529 |   |     | $      | 11,693 |       |   | $ | 4,836 |   |   |   | 41.4 | % |
| EGM segment operating margin    |   |                                                       | 35.5   | %      |     |   | 27.3   | %          |   |   |   |   |   |   |   |   |
|                            |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| EGM unit information:           |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| Lease seats, end of year        |   |                                                       | 17     |   |     |   | -      |       |   |   | 17 |   |   |   | (100.0 | %) |
|                            |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| Sold during year                |   |                                                       | 2,741  |   |     |   | 2,328  |       |   |   | 413 |   |   |   | 17.7 | % |
| Average sales price             |   | $                                                          | 12,952 |   |     | $      | 14,152 |       |   | $ | (1,200 | ) |   |   | (8.5 | %) |

| · | Impact of foreign currency fluctuations |
|--------|----------------------------------------------|

|   | o | Total revenue was negatively impacted by $7,362 due to foreign currency fluctuations between the U.S. dollar and the Australian dollar. Excluding the impacts of foreign currency fluctuations, revenue would have increased $11,062 |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | A 7.8% increase in sales revenue |
|--------|----------------------------------|

|   | o | A 17.7% increase in sold seats driven primarily by the strength of our newer titles and the success of our progressive links: Pink Panther and Grand Central |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | Partially offset by a decrease in average sales price, driven by fluctuations in the exchange rate between the Australian dollar and the U.S. dollar.  The average sales price in Australian dollars increased approximately 4.1% over the prior year period |
|--------|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | An 11.0% increase in other revenue |
|--------|------------------------------------|

|   | o | A 25.1% increase in parts and peripherals.  The current year includes a large sale of hardware combined with software conversion kits to a single customer |
|--------|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | Offset by a 13.9% decrease in EGM software conversion kits |
|--------|---|------------------------------------------------------------|

| · | The increases in EGM sales revenue as noted above |
|--------|---------------------------------------------------|

| · | The increased amount of parts and peripheral sales which have a substantially higher margin than completed units.  As noted above, the current year includes a large sale of hardware combined with software conversion kits to a single customer |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | The impact of a $662 refund of previously assessed import duties in Australia, which is not expected to have a recurring impact |
|--------|---------------------------------------------------------------------------------------------------------------------------------|

| · | The revenue increases as noted in our gross profit discussion |
|--------|---------------------------------------------------------------|

| · | A decrease of $399 in the amount of R&D costs directly related to the EGM segment |
|--------|---------------------------------------------------------------------------------------|

----

Table of Contents

|                            |   | Year Ended                                                 |   |   |     |   |   |       |   |
|---------------------------------|--------|------------------------------------------------------------|--------|--------|----------|--------|--------|------------|--------|
|                            |   | October 31,                                           |   |   | Increase |   |   | Percentage |   |
|                            |   | 2008                                                       |   |   | 2007     |   |   | (Decrease) |   |   | Change |   |
|                            |   | (In thousands, except for units and per unit/seat amounts) |   |
|                            |   |                                                       |   |   |     |   |   |       |   |   |   |   |
| EGM segment revenue:            |   |                                                       |   |   |     |   |   |       |   |   |   |   |
| Lease revenue                   |   | $                                                          | -      |   |     | $      | 33     |       |   | $ | (33 | ) |   |   | (100.0 | %) |
| Sales                           |   |                                                       | 32,946 |   |     |   | 30,955 |       |   |   | 1,991 |   |   |   | 6.4 |   |
| Other                           |   |                                                       | 9,952  |   |     |   | 8,281  |       |   |   | 1,671 |   |   |   | 20.2 |   |
| Total sales and service revenue |   |                                                       | 42,898 |   |     |   | 39,236 |       |   |   | 3,662 |   |   |   | 9.3 |   |
| Total EGM segment revenue       |   | $                                                          | 42,898 |   |     | $      | 39,269 |       |   | $ | 3,629 |   |   |   | 9.2 | % |
|                            |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| EGM segment gross profit        |   | $                                                          | 19,662 |   |     | $      | 14,027 |       |   | $ | 5,635 |   |   |   | 40.2 | % |
| EGM segment gross margin        |   |                                                       | 45.8   | %      |     |   | 35.7   | %          |   |   |   |   |   |   |   |   |
|                            |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| EGM segment operating income    |   | $                                                          | 11,693 |   |     | $      | 7,390  |       |   | $ | 4,303 |   |   |   | 58.2 | % |
| EGM segment operating margin    |   |                                                       | 27.3   | %      |     |   | 18.8   | %          |   |   |   |   |   |   |   |   |
|                            |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| EGM unit information:           |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| Lease seats, end of year        |   |                                                       | -      |   |     |   | 2      |       |   |   | (2 | ) |   |   | (100.0 | %) |
|                            |   |                                                       |   |   |     |   |   |       |   |   |   |   |   |   |   |   |
| Sold during year                |   |                                                       | 2,328  |   |     |   | 2,714  |       |   |   | (386 | ) |   |   | (14.2 | %) |
| Average monthly sales price     |   | $                                                          | 14,152 |   |     | $      | 11,406 |       |   | $ | 2,746 |   |   |   | 24.1 | % |

| · | Impact of foreign currency fluctuations |
|--------|-----------------------------------------|

|   | o | Total revenue was favorably impacted by $2,771 due to foreign currency fluctuations between the U.S. dollar and the Australian dollar. |
|--------|---|----------------------------------------------------------------------------------------------------------------------------------------|

| · | A 6.4% increase in sales revenue |
|--------|----------------------------------|

|   | o | An increase in average sales price driven by the success of our titles, linked series of games and the PC4 platform |
|--------|---|---------------------------------------------------------------------------------------------------------------------|

|   | Ø | The prior year included the sale of a large number of refurbished units which negatively impacted the prior years average sales price |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------|

| · | A 20.2% increase in other revenue |
|--------|-----------------------------------|

|   | o | A 193.0% increase in sales of parts and peripherals |
|--------|---|-----------------------------------------------------|

|   | o | Offset by a decrease of 38.7% of conversion kits |
|--------|---|--------------------------------------------------|

| · | Substantial increases in the average sales price of our EGMs as noted above |
|--------|-----------------------------------------------------------------------------|

| · | The increased amount of peripheral sales which have a substantially higher margin than completed units |
|--------|--------------------------------------------------------------------------------------------------------|

| · | Prior year margins were adversely impacted by a minimum royalty shortfall of $2,900 and inventory write-offs of $2,800 recognized at our Australian subsidiary |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | The revenue increases as noted in our gross profit discussion |
|--------|---------------------------------------------------------------|

| · | Offset by an increase of $1,300 in the amount of R&D costs directly related to the EGM segment |
|--------|----------------------------------------------------------------------------------------------------|

----

Table of Contents

|                      |   | October 31,              |   |   | Increase |   |   | Percentage |   |
|---------------------------|--------|-------------------------------|--------|--------|----------|--------|--------|------------|--------|
|                      |   | 2009                          |   |   | 2008     |   |   | (Decrease) |   |   | Change |   |
|                      |   | (In thousands, except ratios) |   |   |     |   |
|                      |   |                          |   |   |     |   |   |       |   |   |   |   |
| Cash and cash equivalents |   | $                             | 7,840  |   |     | $      | 5,374  |       |   | $ | 2,466 |   |   |   | 45.9 | % |
| Working capital           |   | $                             | 59,272 |   |     | $      | 7,739  |       |   | $ | 51,533 |   |   |   | 665.9 | % |
| Current ratio             |   | 2.8 : 1                       |   |   | 1.1 : 1  |   |   |       | 1.8    |   |   |   |   |   |

|                      |   | Year Ended       |    |   |     |   |    |       |   |
|---------------------------|--------|------------------|---------|--------|----------|--------|---------|------------|--------|
|                      |   | October 31, |    |   | Provided |   |    | Percentage |   |
|                      |   | 2009             |    |   | 2008     |   |    | (Used)     |   |   | Change |   |
|                      |   | (In thousands)   |    |   |     |   |
|                      |   |             |    |   |     |   |    |       |   |   |   |   |
| Operations                |   | $                | 40,142  |   |     | $      | 44,018  |       |   | $ | (3,876 | ) |   |   | (8.8 | %) |
| Investing                 |   |             | (9,045  | )      |     |   | (5,812  | )          |   |   | (3,233 | ) |   |   | (55.6 | %) |
| Financing                 |   |             | (30,124 | )      |     |   | (37,256 | )          |   |   | 7,132 |   |   |   | 19.1 | % |
| Effects of exchange rates |   |             | 1,493   |   |     |   | 32      |       |   |   | 1,461 |   |   |   | (4,565.6 | %) |
| Net Change                |   | $                | 2,466   |   |     | $      | 982     |       |   | $ | 1,484 |   |   |   | (151.1 | %) |

|                                            |   | Year ended       |    |   |     |   |    |       |   |
|-------------------------------------------------|--------|------------------|---------|--------|----------|--------|---------|------------|--------|
|                                            |   | October 31, |    |   | Provided |   |    | Percentage |   |
|                                            |   | 2009             |    |   | 2008     |   |    | (Used)     |   |   | Change |   |
|                                            |   | (In thousands)   |    |   |     |   |
|                                            |   |             |    |   |     |   |    |       |   |   |   |   |
| Payments for products leased and held for lease |   | $                | (11,990 | )      |     | $      | (13,670 | )          |   | $ | 1,680 |   |   |   | 12.3 | % |
| Purchases of property and equipment             |   |             | (1,150  | )      |     |   | (2,554  | )          |   |   | 1,404 |   |   |   | 55.0 | % |
| Purchases of intangible assets                  |   |             | (4,493  | )      |     |   | (1,202  | )          |   |   | (3,291 | ) |   |   | (273.8 | %) |
| Total capital expenditures                      |   | $                | (17,633 | )      |     | $      | (17,426 | )          |   | $ | (207 | ) |   |   | (1.2 | %) |

----

Table of Contents

| · | An increase in cash used for inventory of $10,884, to a use of cash of ($2,304) in fiscal 2009 from $8,580 cash provided from inventory in fiscal 2008. In fiscal 2009, we experienced an increase in our inventory balance primarily related to increased demand for our ETS and shuffler products.  We intend to focus our operational efforts in fiscal 2010 to optimize level of inventory to fulfill sales orders witha focus on increasing our turnover ratio.  We also intend to improve our operational efficiencies surrounding inventory management through continued value engineering of our more popular products. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | An increase in accounts receivable of $7,376, to a use of cash of ($5,120) in fiscal 2009 from a source of cash of $2,256 in fiscal 2008.  Average days sales outstanding (“DSO”) for fiscal 2009 increased to approximately 74 days from approximately 55 days in fiscal 2008 on higher receivables and lower revenues. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | A decrease in non-cash items of $16,233, to $26,847 in fiscal 2009 from $43,080 in fiscal 2008.  In fiscal 2009, non-cash items primarily consisted of depreciation and amortization, share-based compensation, amortization of debt issuance costs, gain on sales of leased assets, gain on early extinguishment of debt and write-down for inventory obsolescence.  In fiscal 2008, non-cash items also includedan impairment of goodwill and an impairment related to our former equity method investment in Sona Mobile Holdings Inc.  No such charges are included in fiscal 2009. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Increase in cash used for purchases of intangible assets of $3,291 related to the Elixir asset purchase during March 2009. |
|--------|----------------------------------------------------------------------------------------------------------------------------|

| · | Cash inflows increased from the release of our $3,000 cash security, plus interest earned thereon, posted in 2004 that related to a patent infringement lawsuit with Elixir. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | The prior year included $2,302 received from the sale of assets, primarily related to the sale of our fractional ownership in a corporate airplane.  No such sales occurred in 2009. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | In 2008, we executed a multi-step refinancing plan (the “Refinancing”) that involved a public offering of our common stock, a second amendment to our senior secured credit facility and a cash tender offer for our Notes. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | We issued 20,294 shares of our common stock at $4.25 per share for net proceeds of $80,453. We offered no common stock for public sale in 2009. |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | We entered into a second amendment to our senior secured facility which, among other things, provided for a new $65,000 Term Loan.  Net proceeds from the Term Loan were $63,438.  No such amendment occurred in 2009. |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | We executed a Tender Offer to repurchase our Notes.  Under the Tender Offer, we repurchased $89,350 in aggregate principal amount of our Notes.  No such Tender Offer occurred in 2009. |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | We repurchased $20,384 of our Notes in separate transactions in the open market. |
|--------|---|----------------------------------------------------------------------------------|

| · | Cash provided by debt proceeds decreased by $47,100. In fiscal 2009, debt proceeds primarily related to borrowings under our Revolver. In fiscal 2008, debt proceeds related to both our Term Loan and Revolver as part of the Refinancing. Debt proceeds in fiscal 2009 include approximately $40,000 of borrowings on our Revolver used to satisfy the remaining Notes outstanding that had not been repurchased in fiscal 2008. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | A decrease in cash used for debt repayments of $125,403, or 60.9%, to $80,420 for fiscal 2009 compared to $205,823 in fiscal 2008. For fiscal 2009, debt repayments primarily related to the repurchase of our remaining outstanding Notes, as part of the Refinancing, payments on our Revolver and payments on the remaining liability to Bet Technology, Inc.  For fiscal 2008, debt payments related primarily to ourNotes, as part of the Refinancing and our Revolver. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Net debt, total debt less cash and cash equivalents, decreased by $34,405 to $85,730 as of October 31, 2009. |
|--------|--------------------------------------------------------------------------------------------------------------|

----

Table of Contents

|                      |   | Year Ended       |    |   |     |   |    |       |   |
|---------------------------|--------|------------------|---------|--------|----------|--------|---------|------------|--------|
|                      |   | October 31, |    |   | Provided |   |    | Percentage |   |
|                      |   | 2008             |    |   | 2007     |   |    | (Used)     |   |   | Change |   |
|                      |   | (In thousands)   |    |   |     |   |
|                      |   |             |    |   |     |   |    |       |   |   |   |   |
| Operations                |   | $                | 44,018  |   |     | $      | 33,048  |       |   | $ | 10,970 |   |   |   | 33.2 | % |
| Investing                 |   |             | (5,812  | )      |     |   | (33,119 | )          |   |   | 27,307 |   |   |   | 82.5 | % |
| Financing                 |   |             | (37,256 | )      |     |   | (3,513  | )          |   |   | (33,743 | ) |   |   | (960.5 | %) |
| Effects of exchange rates |   |             | 32      |   |     |   | (930    | )          |   |   | 962 |   |   |   | 103.4 | % |
| Net Change                |   | $                | 982     |   |     | $      | (4,514  | )          |   | $ | 5,496 |   |   |   | 121.8 | % |

|                                            |   | Year ended       |    |   |     |   |    |       |   |
|-------------------------------------------------|--------|------------------|---------|--------|----------|--------|---------|------------|--------|
|                                            |   | October 31, |    |   | Provided |   |    | Percentage |   |
|                                            |   | 2008             |    |   | 2007     |   |    | (Used)     |   |   | Change |   |
|                                            |   | (In thousands)   |    |   |     |   |
|                                            |   |             |    |   |     |   |    |       |   |   |   |   |
| Payments for products leased and held for lease |   | $                | (13,670 | )      |     | $      | (10,085 | )          |   | $ | (3,585 | ) |   |   | (35.5 | %) |
| Purchases of property and equipment             |   |             | (2,554  | )      |     |   | (2,774  | )          |   |   | 220 |   |   |   | 7.9 | % |
| Purchases of intangible assets                  |   |             | (1,202  | )      |     |   | (2,397  | )          |   |   | 1,195 |   |   |   | 49.9 | % |
| Total capital expenditures                      |   | $                | (17,426 | )      |     | $      | (15,256 | )          |   | $ | (2,170 | ) |   |   | (14.2 | %) |

| · | Non-cash goodwill impairment charge of $22,137 in fiscal 2008 which did not exist in fiscal 2007. |
|--------|---------------------------------------------------------------------------------------------------|

| · | Reductions in inventory of $8,580 in fiscal 2008 as compared to cash used for inventory of ($5,803) in fiscal 2007. |
|--------|---------------------------------------------------------------------------------------------------------------------|

| · | Increased depreciation and amortization expense of $4,019, or 20.7%, to $23,440 in fiscal 2008 as compared to $19,421 in fiscal 2007. This increase is due to the acquisition of the PGIC TGD business effective September 28, 2007, in addition to our increased leased asset base as a result of our continued emphasis on leasing versus selling. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Increase of $1,560 due to the impairment and ultimate sale of our investment in Sona. |
|--------|---------------------------------------------------------------------------------------|

| · | Offset by a gain on the early extinguishment of our Notes of $1,773 for fiscal 2008 as compared to $0 in fiscal 2007. |
|--------|-----------------------------------------------------------------------------------------------------------------------|

| · | Offset by a gain on the sale of our fractional ownership in the corporate airplane of $738 for fiscal 2008 as compared to $0 in fiscal 2007. See SG&A discussion in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” for more information. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Offset by a gain on sale of leased assets of $7,238 for fiscal 2008 as compared to $2,511 in fiscal 2007. |
|--------|-----------------------------------------------------------------------------------------------------------|

| · | Proceeds received from the sale of our fractional ownership in a corporate airplane of approximately $1,309. |
|--------|--------------------------------------------------------------------------------------------------------------|

| · | Proceeds received from the sale of leased assets of $9,247 in fiscal 2008 as compared to $4,070 in fiscal 2007. |
|--------|-----------------------------------------------------------------------------------------------------------------|

----

Table of Contents

| · | Decrease in cash used in business acquisitions of $21,946, or 100%, to $0 for fiscal 2008 as compared to $21,946 in fiscal 2007. The prior year amounts relate to our acquisition of the PGIC TGD.  See Note 2 in “Item 8. Financial Statements and Supplementary Data” included in this Form 10-K for more information. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Offset by an increase in payments for products leased and held for lease of $3,585, or 35.5%, to ($13,670) for fiscal 2008 as compared to ($10,085) in fiscal 2007. Consistent with our strategy of leasing versus selling, we expect this trend to continue. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Increase in debt payments of $113,444, or 122.8%, to ($205,823) for fiscal 2008 as compared to ($92,379) in fiscal 2007. For fiscal 2008, debt payments related to our Notes and Revolver.  For fiscal 2007, the debt payments primarily included payments made on our Old Credit Agreement. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Increase in repurchases of our common stock of $5,192, or 268.6%, to ($7,125) for fiscal 2008 as compared to ($1,933) for fiscal 2007. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------|

| · | Offset by cash received from the Offering, which resulted in total net proceeds of $80,453.  See Note 2 in “Item 8. Financial Statements and Supplementary Data” included in this Form 10-K for more information. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

|   | CONTRACTUAL OBLIGATIONS AND OFF-BALANCE SHEET ARRANGEMENTS |
|--------|------------------------------------------------------------|

|                                                          |   | Total          |    |   | Less than 1 Year |   |   | 1 - 3 Years |   |   | 3 - 5 Years |   |   | More than 5 Years |   |
|---------------------------------------------------------------|--------|----------------|---------|--------|------------------|--------|--------|-------------|--------|--------|-------------|--------|--------|-------------------|--------|
|                                                          |   | (In thousands) |    |
| Contractual obligations:                                      |   |           |    |   |             |   |   |        |   |   |        |   |   |              |   |   |   |
| Debt                                                          |   |           |    |   |             |   |   |        |   |   |        |   |   |              |   |   |   |
| Term Loan (1)                                                 |   | $              | 64,350  |   |             |   | 650    |        |   |   | 63,700      |   |   |              | -      |   |   |   | - |   |
| Interest on the Term Loan (2)                                 |   |           | 5,469   |   |             |   | 2,636  |        |   |   | 2,833       |   |   |              |   |   |   |   |   |   |
| Senior secured revolving credit facility (the "Revolver") (3) |   |           | 28,000  |   |             |   | -      |        |   |   | 28,000      |   |   |              | -      |   |   |   | - |   |
| Interest on the Revolver (4)                                  |   |           | 991     |   |             |   | 476    |        |   |   | 515         |   |   |              | -      |   |   |   | - |   |
| Kings Gaming Inc. including imputed interest (5)              |   |           | 525     |   |             |   | 25     |        |   |   | 500         |   |   |              | -      |   |   |   | - |   |
| Magnum Gaming (Bet the Set "21") (6)                          |   |           | 353     |   |             |   |   |        |   |   |        |   |   |              |   |   |   |   | 353 |   |
| Other                                                         |   |           |    |   |             |   |   |        |   |   |        |   |   |              |   |   |   |   |   |   |
| Purchase commitments (7)                                      |   |           | 9,747   |   |             |   | 9,747  |        |   |   | -           |   |   |              | -      |   |   |   | - |   |
| Operating leases (8)                                          |   |           | 7,259   |   |             |   | 2,345  |        |   |   | 3,707       |   |   |              | 902    |   |   |   | 305 |   |
| Uncertain tax positions (9)                                   |   |           | 1,435   |   |             |   |   |        |   |   |        |   |   |              |   |   |   |   |   |   |
| Other (10)                                                    |   |           | 3,472   |   |             |   | 1,558  |        |   |   | 1,229       |   |   |              | 158    |   |   |   | 527 |   |
| Total contractual obligations                                 |   | $              | 121,601 |   |             | $      | 17,437 |        |   | $      | 100,484     |   |   | $                 | 1,060  |   |   | $ | 1,185 |   |

----

Table of Contents

----

Table of Contents

|                                               |   | Quarter Ended                            |   |   |           |   |
|----------------------------------------------------|--------|------------------------------------------|--------|--------|----------------|--------|
|                                               |   | January 31,                         |   |   | April 30, |   |   | July 31, |   |   | October 31, |   |
|                                               |   | (In thousands, except per share amounts) |   |
|                                               |   |                                     |   |   |           |   |   |   |   |   |   |   |
| 2009:                                              |   |                                     |   |   |           |   |   |   |   |   |   |   |
| Revenue                                            |   | $                                        | 34,489 |   |           | $      | 45,304 |   |   | $ | 45,066 |   |   | $ | 54,568 |   |
| Gross profit                                       |   |                                     | 20,561 |   |           |   | 25,698 |   |   |   | 27,371 |   |   |   | 32,041 |   |
| Income (Loss) from continuing operations           |   |                                     | (973   | )      |           |   | 4,577 |   |   |   | 5,611 |   |   |   | 6,244 |   |
| Net income (loss)                                  |   |                                     | (973   | )      |           |   | 4,577 |   |   |   | 5,611 |   |   |   | 6,244 |   |
| Earnings (Loss) per share - continuing operations: |   |                                     |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Earnings (Loss) per share, basic (a)               |   |                                     | (0.02  | )      |           |   | 0.09 |   |   |   | 0.11 |   |   |   | 0.12 |   |
| Earnings (Loss)  per share, diluted (a)  |   |                                     | (0.02  | )      |           |   | 0.09 |   |   |   | 0.10 |   |   |   | 0.12 |   |
|                                               |   |                                     |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
|                                               |   |                                     |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| 2008:                                              |   |                                     |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Revenue                                            |   | $                                        | 37,897 |   |           | $      | 49,003 |   |   | $ | 49,492 |   |   | $ | 53,614 |   |
| Gross profit                                       |   |                                     | 21,846 |   |           |   | 29,190 |   |   |   | 29,131 |   |   |   | 30,735 |   |
| Income (Loss) from continuing operations           |   |                                     | (1,803 | )      |           |   | 3,049 |   |   |   | 2,998 |   |   |   | (15,046 | ) |
| Net income (loss)                                  |   |                                     | (1,803 | )      |           |   | 3,048 |   |   |   | 2,998 |   |   |   | (15,046 | ) |
| Earnings (Loss) per share - continuing operations: |   |                                     |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Earnings (Loss) per share, basic (a)               |   |                                     | (0.05  | )      |           |   | 0.09 |   |   |   | 0.08 |   |   |   | (0.28 | ) |
| Earnings (Loss)  per share, diluted (a)  |   |                                     | (0.05  | )      |           |   | 0.09 |   |   |   | 0.08 |   |   |   | (0.28 | ) |

----

Table of Contents

IT

----

Table of Contents

IT

|                                                                                                                 |   | Page     |
|----------------------------------------------------------------------------------------------------------------------|--------|----------|
| Report of Independent Registered Public Accounting Firm                                                              |   | 67       |   |
| Consolidated Statements of Operations for the years ended October 31, 2009, 2008 and 2007                            |   |  68 |   |
| Consolidated Balance Sheets as of October 31, 2009 and 2008                                                          |   |  69 |   |
| Consolidated Statements of Changes in Shareholders’ Equity for the years ended October 31, 2009, 2008 and 2007 |   |  70 |   |
| Consolidated Statements of Cash Flows for the years ended October 31, 2009, 2008 and 2007                            |   |  71 |   |
| Notes to consolidated financial statements                                                                           |   |  73 |   |

----

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

----

Table of Contents

CONSOLIDATED STATEMENTS OF OPERATION

|                                                   |   | Year Ended October 31,             |    |
|--------------------------------------------------------|--------|-----------------------------------------|---------|
|                                                   |   | 2009                                    |    |   | 2008 |   |   | 2007 |   |
|                                                   |   | (In thousands, except per share amounts |    |
| Revenue:                                               |   |                                    |    |   |   |   |   |   |   |
| Product leases and royalties                           |   | $                                       | 76,258  |   |   | $ | 70,898 |   |   | $ | 56,426 |   |
| Product sales and service                              |   |                                    | 103,113 |   |   |   | 118,948 |   |   |   | 122,315 |   |
| Other                                                  |   |                                    | 56      |   |   |   | 160 |   |   |   | 110 |   |
| Total revenue                                          |   |                                    | 179,427 |   |   |   | 190,006 |   |   |   | 178,851 |   |
| Costs and expenses:                                    |   |                                    |    |   |   |   |   |   |   |   |   |   |
| Cost of leases and royalties                           |   |                                    | 24,559  |   |   |   | 21,866 |   |   |   | 17,221 |   |
| Cost of sales and service                              |   |                                    | 49,197  |   |   |   | 57,238 |   |   |   | 57,764 |   |
| Gross profit                                           |   |                                    | 105,671 |   |   |   | 110,902 |   |   |   | 103,866 |   |
| Selling, general and administrative                    |   |                                    | 63,647  |   |   |   | 71,350 |   |   |   | 61,947 |   |
| Research and development                               |   |                                    | 17,349  |   |   |   | 18,474 |   |   |   | 17,337 |   |
| Impairment of goodwill                                 |   |                                    | -       |   |   |   | 22,137 |   |   |   | - |   |
| Total costs and expenses                               |   |                                    | 154,752 |   |   |   | 191,065 |   |   |   | 154,269 |   |
|                                                   |   |                                    |    |   |   |   |   |   |   |   |   |   |
| Income (Loss)  from operations               |   |                                    | 24,675  |   |   |   | (1,059 | ) |   |   | 24,582 |   |
|                                                   |   |                                    |    |   |   |   |   |   |   |   |   |   |
| Other income (expense):                                |   |                                    |    |   |   |   |   |   |   |   |   |   |
| Interest income                                        |   |                                    | 860     |   |   |   | 1,759 |   |   |   | 1,644 |   |
| Interest expense                                       |   |                                    | (5,401  | ) |   |   | (6,630 | ) |   |   | (7,487 | ) |
| Other, net                                             |   |                                    | 731     |   |   |   | 1,261 |   |   |   | (4,131 | ) |
| Total other income (expense)                           |   |                                    | (3,810  | ) |   |   | (3,610 | ) |   |   | (9,974 | ) |
| Gain on early extinguishment of debt                   |   |                                    | 1,961   |   |   |   | 1,773 |   |   |   | - |   |
| Impairment of investment                               |   |                                    | -       |   |   |   | (1,560 | ) |   |   | - |   |
| Equity method investment loss                          |   |                                    | -       |   |   |   | - |   |   |   | (306 | ) |
| Income (Loss) from continuing operations before tax    |   |                                    | 22,826  |   |   |   | (4,456 | ) |   |   | 14,302 |   |
| Income tax provision (benefit)                         |   |                                    | 7,367   |   |   |   | 6,346 |   |   |   | (1,999 | ) |
| Income (Loss) from continuing operations               |   |                                    | 15,459  |   |   |   | (10,802 | ) |   |   | 16,301 |   |
| Discontinued operations, net of tax                    |   |                                    | -       |   |   |   | (1 | ) |   |   | 78 |   |
| Net income (loss)                                      |   | $                                       | 15,459  |   |   | $ | (10,803 | ) |   | $ | 16,379 |   |
|                                                   |   |                                    |    |   |   |   |   |   |   |   |   |   |
| Basic earnings  (loss)  per share: |   |                                    |    |   |   |   |   |   |   |   |   |   |
| Continuing operations                                  |   | $                                       | 0.29    |   |   | $ | (0.27 | ) |   | $ | 0.47 |   |
| Discontinued operations                                |   |                                    | -       |   |   |   | - |   |   |   | - |   |
| Net income (loss)                                      |   | $                                       | 0.29    |   |   | $ | (0.27 | ) |   | $ | 0.47 |   |
|                                                   |   |                                    |    |   |   |   |   |   |   |   |   |   |
| Diluted earnings (loss)  per share:          |   |                                    |    |   |   |   |   |   |   |   |   |   |
| Continuing operations                                  |   | $                                       | 0.29    |   |   | $ | (0.27 | ) |   | $ | 0.46 |   |
| Discontinued operations                                |   |                                    | -       |   |   |   | - |   |   |   | - |   |
| Net income (loss)                                      |   | $                                       | 0.29    |   |   | $ | (0.27 | ) |   | $ | 0.46 |   |
|                                                   |   |                                    |    |   |   |   |   |   |   |   |   |   |
| Weighted average shares outstanding:                   |   |                                    |    |   |   |   |   |   |   |   |   |   |
| Basic                                                  |   |                                    | 53,120  |   |   |   | 40,006 |   |   |   | 34,680 |   |
| Diluted                                                |   |                                    | 53,449  |   |   |   | 40,006 |   |   |   | 35,276 |   |

----

Table of Contents

CONSOLIDATED BALANCE SHEETS

|                                                                                                           |   | October 31,                         |    |
|----------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|---------|
|                                                                                                           |   | 2009                                     |    |   | 2008 |   |
|                                                                                                           |   | (In thousands, except per share amounts) |    |
| ASSETS                                                                                                         |   |                                     |    |   |   |   |
| Current assets:                                                                                                |   |                                     |    |   |   |   |
| Cash and cash equivalents                                                                                      |   | $                                        | 7,840   |   |   | $ | 5,374 |   |
| Accounts receivable, net of allowance for bad debts of $630 and $584                                           |   |                                     | 36,371  |   |   |   | 28,915 |   |
| Investment in sales-type leases and notes receivable, net of allowance                                         |   |                                     |    |   |   |   |   |   |
| for bad debts of $164 and $202                                                                                 |   |                                     | 2,281   |   |   |   | 5,655 |   |
| Inventories                                                                                                    |   |                                     | 27,639  |   |   |   | 22,753 |   |
| Prepaid income taxes                                                                                           |   |                                     | 5,893   |   |   |   | 7,459 |   |
| Deferred income taxes                                                                                          |   |                                     | 6,637   |   |   |   | 5,318 |   |
| Other current assets                                                                                           |   |                                     | 5,897   |   |   |   | 4,925 |   |
| Total current assets                                                                                           |   |                                     | 92,558  |   |   |   | 80,399 |   |
| Investment in sales-type leases and notes receivable, net of current portion                                   |   |                                     | 1,295   |   |   |   | 1,961 |   |
| Products leased and held for lease, net                                                                        |   |                                     | 23,653  |   |   |   | 21,054 |   |
| Property and equipment, net                                                                                    |   |                                     | 9,506   |   |   |   | 9,143 |   |
| Intangible assets, net                                                                                         |   |                                     | 71,338  |   |   |   | 66,153 |   |
| Goodwill                                                                                                       |   |                                     | 74,662  |   |   |   | 60,929 |   |
| Deferred income taxes                                                                                          |   |                                     | 9,414   |   |   |   | 10,013 |   |
| Other assets                                                                                                   |   |                                     | 3,043   |   |   |   | 12,294 |   |
| Total assets                                                                                                   |   | $                                        | 285,469 |   |   | $ | 261,946 |   |
|                                                                                                           |   |                                     |    |   |   |   |   |   |
| LIABILITIES AND SHAREHOLDERS' EQUITY                                                                           |   |                                     |    |
| Current liabilities:                                                                                           |   |                                     |    |   |   |   |   |   |
| Accounts payable                                                                                               |   | $                                        | 6,336   |   |   | $ | 10,645 |   |
| Accrued liabilities and other current liabilities                                                              |   |                                     | 16,608  |   |   |   | 13,441 |   |
| Deferred income taxes, current                                                                                 |   |                                     | 62      |   |   |   | - |   |
| Customer deposits                                                                                              |   |                                     | 2,828   |   |   |   | 2,211 |   |
| Deferred revenue                                                                                               |   |                                     | 6,802   |   |   |   | 4,610 |   |
| Current portion of long-term debt                                                                              |   |                                     | 650     |   |   |   | 41,753 |   |
| Total current liabilities                                                                                      |   |                                     | 33,286  |   |   |   | 72,660 |   |
| Long-term debt, net of current portion                                                                         |   |                                     | 92,560  |   |   |   | 83,396 |   |
| Other long-term liabilities                                                                                    |   |                                     | 3,549   |   |   |   | 2,659 |   |
| Deferred income taxes                                                                                          |   |                                     | -       |   |   |   | 373 |   |
| Total liabilities                                                                                              |   |                                     | 129,395 |   |   |   | 159,088 |   |
| Commitments and Contingencies (See Note 15)                                                                    |   |                                     |    |   |   |   |   |   |
| Shareholders' equity:                                                                                          |   |                                     |    |   |   |   |   |   |
| Common stock, $0.01 par value; 151,368 shares authorized; 53,617 and 53,535 shares issued and outstanding |   |                                     | 536     |   |   |   | 535 |   |
| Additional paid-in capital                                                                                     |   |                                     | 88,977  |   |   |   | 83,710 |   |
| Retained earnings                                                                                              |   |                                     | 42,282  |   |   |   | 26,823 |   |
| Accumulated other comprehensive income (loss)                                                                  |   |                                     | 24,279  |   |   |   | (8,210 | ) |
| Total shareholders' equity                                                                                     |   |                                     | 156,074 |   |   |   | 102,858 |   |
| Total liabilities and shareholders' equity                                                                     |   | $                                        | 285,469 |   |   | $ | 261,946 |   |

----

Table of Contents

CONSOLIDATED STATEMENTS CHANGES IN SHAREHOLDERS’ EQUITY

|                                                      |   | Common Stock   |   |   | Additional Paid-in |   |   | Retained |   |   | Accumulated Other Comprehensive |   |   | Total Share-holders' |    |
|-----------------------------------------------------------|--------|----------------|--------|--------|--------------------|--------|--------|----------|--------|--------|---------------------------------|--------|--------|----------------------|---------|
|                                                      |   | Shares         |   |   | Amount             |   |   | Capital  |   |   | Earnings                        |   |   | Income (loss)        |    |   | Equity |   |
|                                                      |   | (In thousands) |   |
| Balance, October 31, 2006                                 |   |           | 34,895 |   |               | $      | 349    |     |   | $      | 717                             |   |   | $                    | 22,391  |   |   | $ | 9,092 |   |   | $ | 32,549 |   |
|                                                      |   |           |   |   |               |   |   |     |   |   |                            |   |   |                 |    |   |   |   |   |   |   |   |   |   |
| Comprehensive Income:                                     |   |           |   |   |               |   |   |     |   |   |                            |   |   |                 |    |   |   |   |   |   |   |   |   |   |
| Net Income                                                |   |           |   |   |               |   |   |     |   |   |                            |   |   |                 | 16,379  |   |   |   |   |   |   |   | 16,379 |   |
| Currency translation                                      |   |           |   |   |               |   |   |     |   |   |                            |   |   |                 |    |   |   |   | 32,850 |   |   |   | 32,850 |   |
| Reclassification of loss on investments                   |   |           |   |   |               |   |   |     |   |   |                            |   |   |                 |    |   |   |   | 78 |   |   |   | 78 |   |
| Total comprehensive income                                |   |           |   |   |               |   |   |     |   |   |                            |   |   |                 |    |   |   |   |   |   |   |   | 49,307 |   |
|                                                      |   |           |   |   |               |   |   |     |   |   |                            |   |   |                 |    |   |   |   |   |   |   |   |   |   |
| Stock repurchased                                         |   |           | (77    | )      |               |   | (1     | )        |   |   | (1,962                          | )      |   |                 |    |   |   |   |   |   |   |   | (1,963 | ) |
| Options exercised                                         |   |           | 229    |   |               |   | 3      |     |   |   | 2,544                           |   |   |                 |    |   |   |   |   |   |   |   | 2,547 |   |
| Shares surrendered and retired for stock option exercises |   |           | (76    | )      |               |   | (1     | )        |   |   | (750                            | )      |   |                 |    |   |   |   |   |   |   |   | (751 | ) |
| Share-based compensation expense                          |   |           |   |   |               |   |   |     |   |   | 4,812                           |   |   |                 |    |   |   |   |   |   |   |   | 4,812 |   |
| Tax benefit from stock option exercises                   |   |           |   |   |               |   |   |     |   |   | 1,133                           |   |   |                 |    |   |   |   |   |   |   |   | 1,133 |   |
| Issuance of restricted stock                              |   |           | 227    |   |               |   | 2      |     |   |   | (2                              | )      |   |                 |    |   |   |   |   |   |   |   | - |   |
| Balance, October 31, 2007                                 |   |           | 35,198 |   |               | $      | 352    |     |   | $      | 6,492                           |   |   | $                    | 38,770  |   |   | $ | 42,020 |   |   | $ | 87,634 |   |
|                                                      |   |           |   |   |               |   |   |     |   |   |                            |   |   |                 |    |   |   |   |   |   |   |   |   |   |
| Comprehensive Income:                                     |   |           |   |   |               |   |   |     |   |   |                            |   |   |                 |    |   |   |   |   |   |   |   |   |   |
| Net Income (loss)                                         |   |           |   |   |               |   |   |     |   |   |                            |   |   |                 | (10,803 | ) |   |   |   |   |   |   | (10,803 | ) |
| Currency translation                                      |   |           |   |   |               |   |   |     |   |   |                            |   |   |                 |    |   |   |   | (50,152 | ) |   |   | (50,152 | ) |
| Reclassification of loss on investments                   |   |           |   |   |               |   |   |     |   |   |                            |   |   |                 |    |   |   |   | (123 | ) |   |   | (123 | ) |
| Tax on unrealized loss on investments                     |   |           |   |   |               |   |   |     |   |   |                            |   |   |                 |    |   |   |   | 45 |   |   |   | 45 |   |
| Total comprehensive income                                |   |           |   |   |               |   |   |     |   |   |                            |   |   |                 |    |   |   |   |   |   |   |   | (61,033 | ) |
|                                                      |   |           |   |   |               |   |   |     |   |   |                            |   |   |                 |    |   |   |   |   |   |   |   |   |   |
| Stock issued                                              |   |           | 20,294 |   |               |   | 202    |     |   |   | 80,250                          |   |   |                 | -       |   |   |   | - |   |   |   | 80,452 |   |
| Stock repurchased                                         |   |           | (2,000 | )      |               |   | (20    | )        |   |   | (7,105                          | )      |   |                 | -       |   |   |   | - |   |   |   | (7,125 | ) |
| Shares surrendered and retired for stock option exercises |   |           | (16    | )      |               |   | -      |     |   |   | -                               |   |   |                 | -       |   |   |   | - |   |   |   | - |   |
| Share-based compensation expense                          |   |           | -      |   |               |   | -      |     |   |   | 4,189                           |   |   |                 | -       |   |   |   | - |   |   |   | 4,189 |   |
| Tax effect from stock option exercises                    |   |           | -      |   |               |   | -      |     |   |   | (115                            | )      |   |                 | -       |   |   |   | - |   |   |   | (115 | ) |
| FIN 48 Adoption                                           |   |           | -      |   |               |   | -      |     |   |   | -                               |   |   |                 | (1,144  | ) |   |   | - |   |   |   | (1,144 | ) |
| Issuance of restricted stock                              |   |           | 59     |   |               |   | 1      |     |   |   | (1                              | )      |   |                 |    |   |   |   |   |   |   |   | - |   |
| Balance, October 31, 2008                                 |   |           | 53,535 |   |               | $      | 535    |     |   | $      | 83,710                          |   |   | $                    | 26,823  |   |   | $ | (8,210 | ) |   | $ | 102,858 |   |
|                                                      |   |           |   |   |               |   |   |     |   |   |                            |   |   |                 |    |   |   |   |   |   |   |   |   |   |
| Comprehensive Income:                                     |   |           |   |   |               |   |   |     |   |   |                            |   |   |                 |    |   |   |   |   |   |   |   |   |   |
| Net Income (loss)                                         |   |           |   |   |               |   |   |     |   |   |                            |   |   |                 | 15,459  |   |   |   |   |   |   |   | 15,459 |   |
| Currency translation                                      |   |           |   |   |               |   |   |     |   |   |                            |   |   |                 |    |   |   |   | 32,489 |   |   |   | 32,489 |   |
| Total comprehensive income                                |   |           |   |   |               |   |   |     |   |   |                            |   |   |                 |    |   |   |   |   |   |   |   | 47,948 |   |
|                                                      |   |           |   |   |               |   |   |     |   |   |                            |   |   |                 |    |   |   |   |   |   |   |   |   |   |
| Stock repurchased                                         |   |           | (25    | )      |               |   |   |     |   |   | (104                            | )      |   |                 |    |   |   |   |   |   |   |   | (104 | ) |
| Share-based compensation expense                          |   |           |   |   |               |   |   |     |   |   | 6,480                           |   |   |                 |    |   |   |   |   |   |   |   | 6,480 |   |
| Tax effect from stock option exercises                    |   |           |   |   |               |   |   |     |   |   | (1,108                          | )      |   |                 |    |   |   |   |   |   |   |   | (1,108 | ) |
| Issuance of restricted stock                              |   |           | 119    |   |               |   | 1      |     |   |   | (1                              | )      |   |                 |    |   |   |   |   |   |   |   | - |   |
| Other stock issuances (RES cancels; swaps)                |   |           | (12    | )      |               |   | -      |     |   |   |                            |   |   |                 |    |   |   |   |   |   |   |   | - |   |
| Balance, October 31, 2009                                 |   |           | 53,617 |   |               | $      | 536    |     |   | $      | 88,977                          |   |   | $                    | 42,282  |   |   | $ | 24,279 |   |   | $ | 156,074 |   |

----

Table of Contents

CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                                 |   | Year Ended October 31, |    |
|--------------------------------------------------------------------------------------|--------|------------------------|---------|
|                                                                                 |   | 2009                   |    |   | 2008 |   |   | 2007 |   |
|                                                                                 |   | (In thousands)         |    |
|  Cash flows from operating activities:                                          |   |                   |    |   |   |   |   |   |   |
|  Net income (loss)                                                              |   | $                      | 15,459  |   |   | $ | (10,803 | ) |   | $ | 16,379 |   |
| Adjustments to reconcile net income (loss) to cash provided by operating activities: |   |                   |    |   |   |   |   |   |   |
|  Depreciation and amortization                                                  |   |                   | 23,515  |   |   |   | 23,440 |   |   |   | 19,421 |   |
|  Amortization of debt issuance costs                                            |   |                   | 1,158   |   |   |   | 1,339 |   |   |   | 1,327 |   |
|  Gain on early extinguishment of debt                                           |   |                   | (1,961  | ) |   |   | (1,773 | ) |   |   | - |   |
|  Share-based compensation                                                       |   |                   | 6,480   |   |   |   | 4,189 |   |   |   | 4,812 |   |
|  Equity method investment loss                                                  |   |                   | -       |   |   |   | - |   |   |   | 306 |   |
|  Impairment of investment                                                       |   |                   | -       |   |   |   | 1,560 |   |   |   | - |   |
|  Impairment of goodwill                                                         |   |                   | -       |   |   |   | 22,137 |   |   |   | - |   |
|  Provision for bad debts                                                        |   |                   | 301     |   |   |   | 92 |   |   |   | (406 | ) |
|  Write-down for inventory obsolescence                                          |   |                   | 1,523   |   |   |   | 72 |   |   |   | 1,415 |   |
|  Loss (Gain) on sale of assets                                                  |   |                   | 110     |   |   |   | (738 | ) |   |   | - |   |
|  Gain on sale of leased assets                                                  |   |                   | (4,279  | ) |   |   | (7,238 | ) |   |   | (2,511 | ) |
|  Excess tax benefit from stock option exercises                                 |   |                   | -       |   |   |   | - |   |   |   | (854 | ) |
|  Tax benefit from stock option exercises                                        |   |                   | -       |   |   |   | - |   |   |   | 279 |   |
|  Changes in operating assets and liabilities:                                   |   |                   |    |   |   |   |   |   |   |   |   |   |
|  Accounts receivable                                                            |   |                   | (5,120  | ) |   |   | 2,256 |   |   |   | 1,245 |   |
|  Investment in sales-type leases and notes receivable                           |   |                   | 4,067   |   |   |   | 7,597 |   |   |   | 6,801 |   |
|  Inventories                                                                    |   |                   | (2,304  | ) |   |   | 8,580 |   |   |   | (5,803 | ) |
|  Accounts payable and accrued liabilities                                       |   |                   | (3,069  | ) |   |   | (5,639 | ) |   |   | 5,505 |   |
|  Customer deposits and deferred revenue                                         |   |                   | 2,149   |   |   |   | (1,411 | ) |   |   | (232 | ) |
|  Income taxes, net of stock option exercises                                    |   |                   | (23     | ) |   |   | (9 | ) |   |   | (20 | ) |
|  Deferred income taxes                                                          |   |                   | 260     |   |   |   | 2,893 |   |   |   | (8,315 | ) |
|  Prepaid income taxes                                                           |   |                   | 2,143   |   |   |   | (3,937 | ) |   |   | (2,690 | ) |
|  Other                                                                          |   |                   | (267    | ) |   |   | 1,411 |   |   |   | (3,611 | ) |
|  Net cash provided by operating activities                                      |   |                   | 40,142  |   |   |   | 44,018 |   |   |   | 33,048 |   |
|                                                                                 |   |                   |    |   |   |   |   |   |   |   |   |   |
|  Cash flows from investing activities:                                          |   |                   |    |   |   |   |   |   |   |   |   |   |
|  Return of security bonds posted with courts                                    |   |                   | 3,050   |   |   |   | - |   |   |   | - |   |
|  Proceeds from sale and maturities of investments                               |   |                   | -       |   |   |   | 65 |   |   |   | 13 |   |
|  Proceeds from sale of assets                                                   |   |                   | 82      |   |   |   | 2,302 |   |   |   | - |   |
|  Proceeds from sale of leased assets                                            |   |                   | 6,400   |   |   |   | 9,247 |   |   |   | 4,070 |   |
|  Payments for products leased and held for lease                                |   |                   | (11,990 | ) |   |   | (13,670 | ) |   |   | (10,085 | ) |
|  Purchases of property and equipment                                            |   |                   | (1,150  | ) |   |   | (2,554 | ) |   |   | (2,774 | ) |
|  Purchases of intangible assets                                                 |   |                   | (4,493  | ) |   |   | (1,202 | ) |   |   | (2,397 | ) |
|  Acquisition of businesses, net of cash acquired                                |   |                   | -  |   |   |   | - |   |   |   | (21,946 | ) |
|  Other                                                                          |   |                   | (944    | ) |   |   | - |   |   |   | - |   |
|  Net cash used by investing activities                                          |   |                   | (9,045  | ) |   |   | (5,812 | ) |   |   | (33,119 | ) |
|                                                                                 |   |                   |    |   |   |   |   |   |   |   |   |   |
|  Cash flows from financing activities:                                          |   |                   |    |   |   |   |   |   |   |   |   |   |
|  Payments on acquisition financing                                              |   |                   | -       |   |   |   | - |   |   |   | (70,000 | ) |
|  Proceeds from Revolver                                                         |   |                   | 50,400  |   |   |   | 32,500 |   |   |   | 87,680 |   |
|  Payments on Revolver                                                           |   |                   | (38,400 | ) |   |   | (92,180 | ) |   |   | (12,000 | ) |
|  Payments on Contingent convertible senior notes                                |   |                   | (40,095 | ) |   |   | (107,969 | ) |   |   | - |   |
|  Payments on notes payable and other long-term debt                             |   |                   | (1,925  | ) |   |   | (5,674 | ) |   |   | (10,379 | ) |
|  Proceeds from other borrowings                                                 |   |                   | -       |   |   |   | 65,000 |   |   |   | 1,926 |   |
|  Repurchase of common stock                                                     |   |                   | -       |   |   |   | (7,125 | ) |   |   | (1,933 | ) |
|  Proceeds from issuance of common stock, net                                    |   |                   | -       |   |   |   | 80,453 |   |   |   | 2,061 |   |
|  Debt issuance costs                                                            |   |                   | -       |   |   |   | (2,261 | ) |   |   | (1,722 | ) |
|  Excess tax benefit from stock option exercises                                 |   |                   | -       |   |   |   | - |   |   |   | 854 |   |
|  Other                                                                          |   |                   | (104    | ) |   |   | - |   |   |   | - |   |
|  Net cash used by financing activities                                          |   |                   | (30,124 | ) |   |   | (37,256 | ) |   |   | (3,513 | ) |
|                                                                                 |   |                   |    |   |   |   |   |   |   |   |   |   |
|  Effect of exchange rate changes on cash                                        |   |                   | 1,493   |   |   |   | 32 |   |   |   | (930 | ) |
|                                                                                 |   |                   |    |   |   |   |   |   |   |   |   |   |
|  Net increase (decrease) in cash and cash equivalents                           |   |                   | 2,466   |   |   |   | 982 |   |   |   | (4,514 | ) |
|  Cash and cash equivalents, beginning of year                                   |   |                   | 5,374   |   |   |   | 4,392 |   |   |   | 8,906 |   |
|  Cash and cash equivalents, end of year                                         |   | $                      | 7,840   |   |   | $ | 5,374 |   |   | $ | 4,392 |   |

----

Table of Contents

|                                                           |   | Year Ended October 31, |   |
|----------------------------------------------------------------|--------|------------------------|--------|
|                                                           |   | 2009                   |   |   | 2008 |   |   | 2007 |   |
|                                                           |   | (In thousands)         |   |
|  Non-cash Investing and Financing transactions:           |   |                   |   |   |   |   |   |   |   |
|  Accrued direct acquisition costs related to acquisitions |   | $                      | -      |   |   | $ | - |   |   | $ | 792 |   |
|  Note payable and contingent consideration issued in      |   |                   |   |   |   |   |   |   |   |   |   |   |
|  connection with the acquisition of a business or assets  |   |                   | -      |   |   |   | - |   |   |   | 2,922 |   |
| Recharacterization of prepaid royalty                          |   |                   | 4,667  |   |   |   | - |   |   |   | 1,750 |   |
|  Cash paid for:                                           |   |                   |   |   |   |   |   |   |   |   |   |   |
|  Income taxes, net of refunds                             |   |                   | 6,417  |   |   | $ | 6,007 |   |   | $ | 8,475 |   |
|  Interest                                                 |   |                   | 4,358  |   |   |   | 6,815 |   |   |   | 5,844 |   |

----

Table of Contents

Notes to Consolidated Financial Statements

----

Table of Contents

----

Table of Contents

| ·   | persuasive evidence of an arrangement between us and our customer exists; |
|--------------------|---------------------------------------------------------------------------|

| ·   | shipment has occurred or services have been rendered; |
|--------------------|-------------------------------------------------------|

| ·   | the price is fixed or determinable; and |
|--------------------|-----------------------------------------|

| ·   | collectability is reasonably assured and/or probable. |
|--------------------|-------------------------------------------------------|

----

Table of Contents

| ·   | Whether the software is a significant focus of the marketing effort or is sold separately. |
|--------------------|--------------------------------------------------------------------------------------------|

| ·   | Whether post-contract customer support or PCS (PCS includes the right to receive services or unspecified upgrades/enhancements, or both, offered to users or resellers) is provided. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Whether the development and production costs of the software as a component of the cost of the product is incidental. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------|

| ·   | Whether an agreement includes service elements (other than PCS related services), such as training or installation and whether such services are essential to the functionality of the software or whether such software is considered “off-the-shelf” (off-the-shelf software is software that is marketed as a stock item that can be used by customerswith little or no customization). Conversely, “core software” requires significant customization of the software in order for the software to be used by the end customer. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The delivered items have value to the customer on a stand alone basis; |
|--------------------|------------------------------------------------------------------------|

| ·   | we have objective and reliable evidence of the fair value of the undelivered items; and |
|--------------------|-----------------------------------------------------------------------------------------|

| ·   | delivery of any undelivered item is considered probable and substantially in our control. |
|--------------------|-------------------------------------------------------------------------------------------|

----

Table of Contents

|   | Level 1: | Quoted prices for identical instruments in active markets. |
|--------|----------|------------------------------------------------------------|

|   | Level 2: | Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. |
|--------|----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Level 3: | Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
|--------|----------|-------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

----

Table of Contents

----

Table of Contents

| Effective settlement of lawsuit                                                      |   | $      | 400   |   |
|--------------------------------------------------------------------------------------|--------|--------|-------|--------|
| Inventory                                                                            |   |   | 122   |   |
| Patents (amortized over a 3 year period to Utility segment cost of goods sold)       |   |   | 850   |   |
| Covenant not to compete (amortized over a 7 year period to Utility segment SG&A) |   |   | 1,576 |   |
| Total consideration                                                                  |   | $      | 2,948 |   |

|        |   | Carrying Value   |   |   | Fair Value       |   | Fair Value |
|-------------|--------|------------------|--------|--------|------------------|--------|------------|
|        |   | October 31, 2009 |   |   | October 31, 2009 |   | Hierarchy  |
|        |   |             |   |   |             |   |       |
| Term Loan   |   | $                | 64,350 |   |             | $      | 62,806     |   | Level 2 |
| Revolver    |   |             | 28,000 |   |             |   | 25,312     |   | Level 2 |
|  Total |   | $                | 92,350 |   |             | $      | 88,118     |   |   |

|                          |   | October 31,    |   |
|-------------------------------|--------|----------------|--------|
|                          |   | 2009           |   |   | 2008 |   |
|                          |   | (In thousands) |   |
| Accounts receivable, net:     |   |           |   |   |   |   |
| Trade receivables             |   | $              | 37,001 |   |   | $ | 29,499 |   |
| Less: allowance for bad debts |   |           | (630   | ) |   |   | (584 | ) |
| Total                         |   | $              | 36,371 |   |   | $ | 28,915 |   |

|                                                                   |   | October 31, |   |
|------------------------------------------------------------------------|--------|------------------|--------|
|                                                                   |   | 2009             |   |   | 2008 |   |
|                                                                   |   | (In thousands)   |   |
| Investment in sales-type leases and notes receivable, net:             |   |             |   |   |   |   |
| Minimum sales-type lease payments                                      |   | $                | 3,570  |   |   | $ | 5,476 |   |
| Notes receivable - table game licenses                                 |   |             | 998    |   |   |   | 3,800 |   |
| Sub-total sales-type leases and notes receivable                       |   |             | 4,568  |   |   |   | 9,276 |   |
|                                                                   |   |             |   |   |   |   |   |   |
| Less: interest sales-type leases                                       |   |             | (321   | ) |   |   | (626 | ) |
| Less: deferred service revenue                                         |   |             | (507   | ) |   |   | (832 | ) |
| Less: allowance for bad debts                                          |   |             | (164   | ) |   |   | (202 | ) |
|                                                                   |   |             |   |   |   |   |   |   |
| Investment in sales-type leases and notes receivable, net              |   |             | 3,576  |   |   |   | 7,616 |   |
|                                                                   |   |             |   |   |   |   |   |   |
| Less: current portion sales-type leases                                |   |             | (1,466 | ) |   |   | (2,995 | ) |
| Less: current portion notes receivable - table game licenses           |   |             | (815   | ) |   |   | (2,660 | ) |
|                                                                   |   |             |   |   |   |   |   |   |
| Long-term portion investment in sales-type leases and notes receivable |   | $                | 1,295  |   |   | $ | 1,961 |   |

----

Table of Contents

| October 31,                                               |   | 2010           |   |   | 2011   |   |   | 2012   |   |   | Total  |   |
|-----------------------------------------------------------|--------|----------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                      |   | (In thousands) |   |
| Investment in sales-type leases                           |   |           |   |   |   |   |   |   |   |   |   |   |
| and notes receivable, net:                                |   |           |   |   |   |   |   |   |   |   |   |   |
| Future sales-type lease payments                          |   | $              | 2,031  |   |   | $      | 1,113  |   |   | $      | 426    |   |   | $ | 3,570 |   |
| Notes receivable - table game licenses                    |   |           | 874    |   |   |   | 123    |   |   |   | 1      |   |   |   | 998 |   |
| Sub-total sales-type leases and notes receivable          |   |           | 2,905  |   |   |   | 1,236  |   |   |   | 427    |   |   |   | 4,568 |   |
|                                                      |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Less: interest sales-type leases                          |   |           | (242   | )      |   |   | (66    | )      |   |   | (13    | )      |   |   | (321 | ) |
| Less: deferred service revenue                            |   |           | (277   | )      |   |   | (160   | )      |   |   | (70    | )      |   |   | (507 | ) |
| Less: allowance for bad debts                             |   |           | (105   | )      |   |   | (45    | )      |   |   | (14    | )      |   |   | (164 | ) |
| Investment in sales-type leases and notes receivable, net |   | $              | 2,281  |   |   | $      | 965    |   |   | $      | 330    |   |   | $ | 3,576 |   |

|                              |   | October 31, |   |
|-----------------------------------|--------|------------------|--------|
|                              |   | 2009             |   |   | 2008 |   |
|                              |   | (In thousands)   |   |
| Inventories:                      |   |             |   |   |   |   |
| Raw materials and component parts |   | $                | 13,668 |   |   | $ | 16,649 |   |
| Work-in-process                   |   |             | 4,353  |   |   |   | 710 |   |
| Finished goods                    |   |             | 9,618  |   |   |   | 5,394 |   |
| Total                             |   | $                | 27,639 |   |   | $ | 22,753 |   |

----

Table of Contents

|                                |   | October 31, |    |
|-------------------------------------|--------|------------------|---------|
|                                |   | 2009             |    |   | 2008 |   |
|                                |   | (In thousands)   |    |
| Products leased and held for lease: |   |             |    |   |   |   |
| Utility                             |   | $                | 32,828  |   |   | $ | 30,014 |   |
| Less: accumulated depreciation      |   |             | (23,649 | ) |   |   | (21,456 | ) |
| Utility, net                        |   |             | 9,179   |   |   |   | 8,558 |   |
|                                |   |             |    |   |   |   |   |   |
| Proprietary Table Games             |   |             | 2,706   |   |   |   | 2,658 |   |
| Less: accumulated depreciation      |   |             | (1,498  | ) |   |   | (1,117 | ) |
| Proprietary Table Games, net        |   |             | 1,208   |   |   |   | 1,541 |   |
|                                |   |             |    |   |   |   |   |   |
| Electronic Table Systems            |   |             | 22,258  |   |   |   | 16,420 |   |
| Less: accumulated depreciation      |   |             | (8,992  | ) |   |   | (5,465 | ) |
| Electronic Table Systems, net       |   |             | 13,266  |   |   |   | 10,955 |   |
|                                |   |             |    |   |   |   |   |   |
| Total, net                          |   | $                | 23,653  |   |   | $ | 21,054 |   |

|                                    |   | October 31, |   |
|-----------------------------------------|--------|------------------|--------|
|                                    |   | 2009             |   |   | 2008 |   |
|                                    |   | (In thousands)   |   |
| Property and equipment:                 |   |             |   |   |   |   |
| Office furniture and computer equipment |   | $                | 9,492  |   |   | $ | 7,612 |   |
| Less: accumulated depreciation          |   |             | (6,772 | ) |   |   | (5,051 | ) |
| Property and equipment, net             |   |             | 2,720  |   |   |   | 2,561 |   |
|                                    |   |             |   |   |   |   |   |   |
| Leasehold improvements:                 |   |             | 4,751  |   |   |   | 5,878 |   |
| Less: accumulated depreciation          |   |             | (3,704 | ) |   |   | (3,308 | ) |
| Leasehold Improvements, net             |   |             | 1,047  |   |   |   | 2,570 |   |
|                                    |   |             |   |   |   |   |   |   |
| Production equipment and other:         |   |             | 11,219 |   |   |   | 8,230 |   |
| Less: accumulated depreciation          |   |             | (5,480 | ) |   |   | (4,218 | ) |
| Production equipment and other, net     |   |             | 5,739  |   |   |   | 4,012 |   |
|                                    |   |             |   |   |   |   |   |   |
| Total, net                              |   | $                | 9,506  |   |   | $ | 9,143 |   |

|                        |   | October 31, |   |
|-----------------------------|--------|------------------|--------|
|                        |   | 2009             |   |   | 2008 |   |
|                        |   | (In thousands)   |   |
| Other current assets:       |   |             |   |   |   |   |
| Prepaid legal fees          |   | $                | -      |   |   | $ | 1,358 |   |
| Deferred cost of goods sold |   |             | 2,118  |   |   |   | 1,248 |   |
| Other prepaid expenses      |   |             | 1,956  |   |   |   | 1,552 |   |
| Other receivables           |   |             | 1,631  |   |   |   | 670 |   |
| Other                       |   |             | 192    |   |   |   | 97 |   |
| Total                       |   | $                | 5,897  |   |   | $ | 4,925 |   |

----

Table of Contents

|                                  |   | October 31, |   |
|---------------------------------------|--------|------------------|--------|
|                                  |   | 2009             |   |   | 2008 |   |
|                                  |   | (In thousands)   |   |
| Other long-term assets:               |   |             |   |   |   |   |
| PGIC TGD prepaid royalty (see Note 2) |   | $                | -      |   |   | $ | 4,709 |   |
| Deposits                              |   |             | 259    |   |   |   | 3,628 |   |
| Debt issuance costs, net              |   |             | 2,160  |   |   |   | 3,319 |   |
| Other                                 |   |             | 624    |   |   |   | 638 |   |
| Total                                 |   | $                | 3,043  |   |   | $ | 12,294 |   |

|                                               |   | October 31, |   |
|----------------------------------------------------|--------|------------------|--------|
|                                               |   | 2009             |   |   | 2008 |   |
|                                               |   | (In thousands)   |   |
| Accrued liabilities and other current liabilities: |   |             |   |   |   |   |
| Accrued interest                                   |   | $                | 155    |   |   | $ | 340 |   |
| Accrued compensation                               |   |             | 10,137 |   |   |   | 8,012 |   |
| Accrued taxes                                      |   |             | 2,083  |   |   |   | 2,318 |   |
| Other accrued liabilities                          |   |             | 4,233  |   |   |   | 2,771 |   |
| Total                                              |   | $                | 16,608 |   |   | $ | 13,441 |   |

----

Table of Contents

|                           | Weighted Average |   | October 31, |    |
|--------------------------------|------------------|--------|------------------|---------|
|                           | Useful Life      |   | 2009             |    |   | 2008 |   |
|                           |             |   | (In thousands)   |    |
| Amortizable intangible assets: |             |   |             |    |   |   |   |
|                           |             |   |             |    |   |   |   |
| Patents, games and products    | 10 years         |   | $                | 65,345  |   |   | $ | 60,478 |   |
| Less: accumulated amortization |             |   |             | (42,697 | ) |   |   | (30,839 | ) |
|                           |             |   |             | 22,648  |   |   |   | 29,639 |   |
| Customer relationships         | 10 years         |   |             | 23,290  |   |   |   | 19,497 |   |
| Less: accumulated amortization |             |   |             | (6,704  | ) |   |   | (3,592 | ) |
|                           |             |   |             | 16,586  |   |   |   | 15,905 |   |
| Licenses and other             | 6 years          |   |             | 12,722  |   |   |   | 4,392 |   |
| Less: accumulated amortization |             |   |             | (2,934  | ) |   |   | (2,189 | ) |
|                           |             |   |             | 9,788   |   |   |   | 2,203 |   |
| Developed technology           | 4 years          |   |             | 9,934   |   |   |   | 7,318 |   |
| Less: accumulated amortization |             |   |             | (9,313  | ) |   |   | (5,031 | ) |
|                           |             |   |             | 621     |   |   |   | 2,287 |   |
|                           |             |   |             |    |   |   |   |   |   |
| Total                          |             |   | $                | 49,643  |   |   | $ | 50,034 |   |

| Year ending October 31, |   | (In thousands) |   |
|------------------------------|--------|----------------|--------|
| 2010                         |   | $              | 11,743 |   |
| 2011                         |   |           | 9,105  |   |
| 2012                         |   |           | 7,600  |   |
| 2013                         |   |           | 5,213  |   |
| 2014                         |   |           | 8,179  |   |
| Thereafter                   |   |           | 7,803  |   |
|                         |   | $              | 49,643 |   |

|                                    |   |           |   |   | Proprietary |   |   | Electronic    |   |   | Electronic      |   |   |   |   |
|-----------------------------------------|--------|----------------|--------|--------|-------------|--------|--------|---------------|--------|--------|-----------------|--------|--------|--------|--------|
|                                    |   | Utility        |   |   | Table Games |   |   | Table Systems |   |   | Gaming Machines |   |   | Total  |   |
|                                    |   | (In thousands) |   |
| Balance at October 31, 2008             |   | $              | 37,194 |   |        | $      | 7,373  |          |   | $      | 8,200           |   |   | $      | 8,162  |   |   | $ | 60,929 |   |
| Foreign currency translation adjustment |   |           | 6,941  |   |        |   | -      |          |   |   | 2,931           |   |   |   | 2,917  |   |   |   | 12,789 |   |
| Other                                   |   |           | -      |   |        |   | 944    |          |   |   | -               |   |   |   | -      |   |   |   | 944 |   |
| Balance at October 31, 2009             |   | $              | 44,135 |   |        | $      | 8,317  |          |   | $      | 11,131          |   |   | $      | 11,079 |   |   | $ | 74,662 |   |

----

Table of Contents

|                                                                                      |   | October 31, |   |
|-------------------------------------------------------------------------------------------|--------|------------------|--------|
|                                                                                      |   | 2009             |   |   | 2008 |   |
|                                                                                      |   | (In thousands)   |   |
| Term Loan                                                                                 |   | $                | 64,350 |   |   | $ | 65,000 |   |
| Contingent convertible senior notes (the "Notes"), fixed rate interest at 1.25%, due 2024 |   |             | -      |   |   |   | 40,258 |   |
| Senior secured revolving credit facility (the "Revolver")                                 |   |             | 28,000 |   |   |   | 16,000 |   |
| PGIC TGD minimum consideration, non-interest bearing, due in installments through 2011    |   |             | -      |   |   |   | 2,444 |   |
| BTI acquisition contingent consideration                                                  |   |             | -      |   |   |   | 527 |   |
| Kings Gaming Inc. contingent consideration                                                |   |             | 506    |   |   |   | 508 |   |
| Bet the Set "21" contingent consideration                                                 |   |             | 354    |   |   |   | 412 |   |
| Total debt                                                                                |   |             | 93,210 |   |   |   | 125,149 |   |
| Less: current portion                                                                     |   |             | (650   | ) |   |   | (41,753 | ) |
| Total long-term debt                                                                      |   | $                | 92,560 |   |   | $ | 83,396 |   |

----

Table of Contents

| · | Acquisitions; |
|--------|---------------|

| · | Incurrence of indebtedness; |
|--------|-----------------------------|

| · | Granting or incurrence of liens; |
|--------|----------------------------------|

| · | Dividends and other distributions in respect of our equity securities; |
|--------|------------------------------------------------------------------------|

| · | Investments; |
|--------|--------------|

| · | Sales of assets; |
|--------|------------------|

| · | Transactions with affiliates; |
|--------|-------------------------------|

| · | Mergers; and |
|--------|--------------|

| · | Agreements to restrict dividends and other payments from subsidiaries. |
|--------|------------------------------------------------------------------------|

----

Table of Contents

| October 31, |   | (In thousands) |   |
|------------------|--------|----------------|--------|
| 2010             |   |           | 650    |   |
| 2011             |   |           | 650    |   |
| 2012             |   |           | 91,556 |   |
| 2013             |   |           | -      |   |
| 2014             |   |           | -      |   |
| Thereafter       |   |           | 354    |   |
|             |   |           | 93,210 |   |

----

Table of Contents

|                                            |   | Shares                                  |   |   | Weighted Average Exercise Price |   | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value |
|-------------------------------------------------|--------|-----------------------------------------|--------|--------|-------------------------------------------|--------|------------------------------------------------------------|--------------------------------|
|                                            |   | (In thousands, except per share amount) |
| Outstanding at October 31, 2006                 |   |                                    | 3,131  |   |                                      | $      | 19.16                                                      |                           |   |   |
| Granted                                         |   |                                    | 142    |   |                                      |   | 27.23                                                      |                           |   |   |
| Exercised                                       |   |                                    | (229   | )      |                                      |   | 11.12                                                      |                           |   |   |
| Forfeited or expired                            |   |                                    | (138   | )      |                                      |   | 29.96                                                      |                           |   |   |
|                                            |   |                                    |   |   |                                      |   |                                                       |                           |   |   |
| Outstanding at October 31, 2007                 |   |                                    | 2,906  |   |                                      |   | 19.68                                                      |                           |   |   |
| Granted                                         |   |                                    | 655    |   |                                      |   | 9.37                                                       |                           |   |   |
| Exercised                                       |   |                                    | -      |   |                                      |   | -                                                          |                           |   |   |
| Forfeited or expired                            |   |                                    | (165   | )      |                                      |   | 17.39                                                      |                           |   |   |
|                                            |   |                                    |   |   |                                      |   |                                                       |                           |   |   |
| Outstanding at October 31, 2008                 |   |                                    | 3,396  |   |                                      |   | 17.80                                                      |                           |   |   |
| Granted                                         |   |                                    | 1,155  |   |                                      |   | 4.05                                                       |                           |   |   |
| Exercised                                       |   |                                    | -      |   |                                      |   | -                                                          |                           |   |   |
| Forfeited or expired                            |   |                                    | (186   | )      |                                      | $      | 8.42                                                       |                           |   |   |
|                                            |   |                                    |   |   |                                      |   |                                                       |                           |   |   |
| Outstanding at October 31, 2009                 |   |                                    | 4,365  |   |                                      |   | 14.56                                                      |                           |  6.2 |  4,520 |
|                                            |   |                                    |   |   |                                      |   |                                                       |                           |   |   |
| Exercisable at October 31, 2009                 |   |                                    | 2,642  |   |                                      |   | 17.20                                                      |                           |  4.8 |  456 |
| Vested and expected to vest at October 31, 2009 |   |                                    | 3,960  |   |                                      |   | 14.56                                                      |                           |  6.2 |  4,520 |

|                          |   |                                    |   |   | Weighted Average Grant-Date |   |
|-------------------------------|--------|-----------------------------------------|--------|--------|-----------------------------|--------|
|                          |   | Shares                                  |   |   | Fair Value                  |   |
|                          |   | (In thousands, except per share amount) |   |
| Nonvested at October 31, 2006 |   |                                    | 340    |   |                        | $      | 26.01 |   |
| Granted                       |   |                                    | 227    |   |                        |   | 25.42 |   |
| Vested                        |   |                                    | (30    | )      |                        |   | 33.02 |   |
| Forfeited                     |   |                                    | (51    | )      |                        |   | 25.94 |   |
|                          |   |                                    |   |   |                        |   |   |   |
| Nonvested at October 31, 2007 |   |                                    | 486    |   |                        |   | 26.19 |   |
| Granted                       |   |                                    | 59     |   |                        |   | 11.66 |   |
| Vested                        |   |                                    | (25    | )      |                        |   | 20.87 |   |
| Forfeited                     |   |                                    | (16    | )      |                        |   | 18.25 |   |
|                          |   |                                    |   |   |                        |   |   |   |
| Nonvested at October 31, 2008 |   |                                    | 504    |   |                        | $      | 24.15 |   |
| Granted                       |   |                                    | 121    |   |                        |   | 4.36 |   |
| Vested                        |   |                                    | (170   | )      |                        |   | 23.19 |   |
| Forfeited                     |   |                                    | (13    | )      |                        |   | 8.70 |   |
| Nonvested at October 31, 2009 |   |                                    | 442    |   |                        |   | 19.55 |   |

----

Table of Contents

|                    |   | Year Ended October 31, |   |
|-------------------------|--------|-----------------------------|--------|
|                    |   | 2009                        |   |   | 2008 |   |   | 2007 |   |
|                    |   | (In thousands)              |   |
| Compensation costs:     |   |                        |   |   |   |   |   |   |   |
| Stock options           |   | $                           | 2,909  |   |   | $ | 1,577 |   |   | $ | 1,881 |   |
| Restricted stock        |   |                        | 3,571  |   |   |   | 2,612 |   |   |   | 2,931 |   |
| Total compensation cost |   | $                           | 6,480  |   |   | $ | 4,189 |   |   | $ | 4,812 |   |
| Related tax benefit     |   | $                           | (2,206 | ) |   | $ | (1,131 | ) |   | $ | (1,313 | ) |

|                                |   | Year Ended October 31, |   |
|-------------------------------------|--------|-----------------------------|--------|
|                                |   | 2009                        |   |   | 2008 |   |   | 2007 |   |
|                                |   | (In thousands)              |   |
|                                |   |                        |   |   |   |   |   |   |   |
| Cost of sales                       |   | $                           | 32     |   |   | $ | 25 |   |   | $ | 43 |   |
| Selling, general and administrative |   |                        | 6,018  |   |   |   | 3,770 |   |   |   | 4,391 |   |
| Research and development            |   |                        | 430    |   |   |   | 394 |   |   |   | 378 |   |
| Total share-based compensation      |   | $                           | 6,480  |   |   | $ | 4,189 |   |   | $ | 4,812 |   |

|                          |   | Year Ended October 31, |   |
|-------------------------------|--------|-----------------------------|--------|
|                          |   | 2009                        |   |   | 2008 |   |   | 2007 |   |
| Option valuation assumptions: |   |                        |   |   |   |   |   |   |   |
| Expected dividend yield       |   | None                        |   |   | None |   |   | None |   |
| Expected volatility           |   |                        | 68.9   | % |   |   | 47.1 | % |   |   | 39.6 | % |
| Risk-free interest rate       |   |                        | 1.7    | % |   |   | 3.0 | % |   |   | 4.6 | % |
| Expected term                 |   | 4.4 years                   |   |   | 4.2 years |   |   | 4.2 years |   |

----

Table of Contents

|                                                  |   | Year Ended October 31,                  |   |
|-------------------------------------------------------|--------|-----------------------------------------|--------|
|                                                  |   | 2009                                    |   |   | 2008 |   |   | 2007 |   |
|                                                  |   | (In thousands, except per share amount) |   |
|                                                  |   |                                    |   |   |   |   |   |   |   |
| Income (Loss) from continuing operations              |   | $                                       | 15,459 |   |   | $ | (10,802 | ) |   | $ | 16,301 |   |
|                                                  |   |                                    |   |   |   |   |   |   |   |   |   |   |
| Basic:                                                |   |                                    |   |   |   |   |   |   |   |   |   |   |
|  Weighted average shares                         |   |                                    | 53,120 |   |   |   | 40,006 |   |   |   | 34,680 |   |
|                                                  |   |                                    |   |   |   |   |   |   |   |   |   |   |
| Diluted:                                              |   |                                    |   |   |   |   |   |   |   |   |   |   |
|  Weighted average shares, basic                  |   |                                    | 53,120 |   |   |   | 40,006 |   |   |   | 34,680 |   |
|  Dilutive effect of options and restricted stock |   |                                    | 329    |   |   |   | - |   |   |   | 593 |   |
|  Dilutive effect of contingent convertible notes |   |                                    | -      |   |   |   | - |   |   |   | 3 |   |
|  Weighted average shares, diluted                |   |                                    | 53,449 |   |   |   | 40,006 |   |   |   | 35,276 |   |
|                                                  |   |                                    |   |   |   |   |   |   |   |   |   |   |
| Basic earnings (loss) per share                       |   | $                                       | 0.29   |   |   | $ | (0.27 | ) |   | $ | 0.47 |   |
| Diluted earnings (loss) per share                     |   | $                                       | 0.29   |   |   | $ | (0.27 | ) |   | $ | 0.46 |   |
| Weighted average anti-dilutive shares excluded        |   |                                    |   |   |   |   |   |   |   |   |   |   |
| from diluted EPS                                      |   |                                    | 5,432  |   |   |   | 16,292 |   |   |   | 6,739 |   |

----

Table of Contents

|                                 |   | Year Ended October 31, |   |
|--------------------------------------|--------|-----------------------------|--------|
|                                 |   | 2009                        |   |   | 2008 |   |   | 2007 |   |
|                                 |   | (In thousands)              |   |
| Other income (expense):              |   |                        |   |   |   |   |   |   |   |
| Interest income                      |   |                        | 860    |   |   |   | 1,759 |   |   |   | 1,644 |   |
| Interest expense                     |   |                        | (5,401 | ) |   |   | (6,630 | ) |   |   | (7,487 | ) |
| Other, net                           |   |                        | 731    |   |   |   | 1,261 |   |   |   | (4,131 | ) |
| Total other income (expense)         |   | $                           | (3,810 | ) |   | $ | (3,610 | ) |   | $ | (9,974 | ) |
|                                 |   |                        |   |   |   |   |   |   |   |   |   |   |
| Gain on early extinguishment of debt |   | $                           | 1,961  |   |   | $ | 1,773 |   |   |   | - |   |

|                    |   | 2009           |   |   | 2008   |   |   | 2007   |   |
|-------------------------|--------|----------------|--------|--------|--------|--------|--------|--------|--------|
|                    |   | (In thousands) |   |
|                    |   |           |   |   |   |   |   |   |   |
| Continuing operations   |   | $              | 7,367  |   |   | $      | 6,346  |   |   | $ | (1,999 | ) |
| Discontinued operations |   |           | -      |   |   |   | -      |   |   |   | 46 |   |
| Total                   |   | $              | 7,367  |   |   | $      | 6,346  |   |   | $ | (1,953 | ) |

----

Table of Contents

|      |   | Year Ended October 31, |   |
|-----------|--------|-----------------------------|--------|
|      |   | 2009                        |   |   | 2008 |   |   | 2007 |   |
|      |   | (In thousands)              |   |
| Current:  |   |                        |   |   |   |   |   |   |   |
| Federal   |   | $                           | 6,590  |   |   | $ | 5,982 |   |   | $ | 6,345 |   |
| State     |   |                        | 1,157  |   |   |   | 726 |   |   |   | 747 |   |
| Foreign   |   |                        | 567    |   |   |   | 473 |   |   |   | 64 |   |
|      |   |                        | 8,314  |   |   |   | 7,181 |   |   |   | 7,156 |   |
| Deferred: |   |                        |   |   |   |   |   |   |   |   |   |   |
| Federal   |   |                        | (1,993 | ) |   |   | (1,547 | ) |   |   | (1,586 | ) |
| State     |   |                        | (47    | ) |   |   | (85 | ) |   |   | (82 | ) |
| Foreign   |   |                        | 1,093  |   |   |   | 797 |   |   |   | (7,487 | ) |
|      |   |                        | (947   | ) |   |   | (835 | ) |   |   | (9,155 | ) |
| Total     |   | $                           | 7,367  |   |   | $ | 6,346 |   |   | $ | (1,999 | ) |

|                                        |   | Year Ended October 31, |   |
|---------------------------------------------|--------|-----------------------------|--------|
|                                        |   | 2009                        |   |   | 2008 |   |
|                                        |   | (In thousands)              |   |
| Deferred tax assets:                        |   |                        |   |   |   |   |
| Inventories                                 |   | $                           | 3,040  |   |   | $ | 2,969 |   |
| Accounts receivable                         |   |                        | 240    |   |   |   | 202 |   |
| Employee benefits                           |   |                        | 2,096  |   |   |   | 1,063 |   |
| Deferred revenue                            |   |                        | 976    |   |   |   | 517 |   |
| Investment impairment write-downs           |   |                        | -      |   |   |   | - |   |
| Other reserves                              |   |                        | -      |   |   |   | - |   |
| Stock awards                                |   |                        | 5,242  |   |   |   | 3,642 |   |
| Fixed assets                                |   |                        | -      |   |   |   | - |   |
| Foreign net operating loss carryforward     |   |                        | 8,036  |   |   |   | 6,026 |   |
| Contingent consideration on patent purchase |   |                        | -      |   |   |   | - |   |
| Foreign tax credits / receivables           |   |                        | 1,249  |   |   |   | 566 |   |
| Intangible assets                           |   |                        | 6,125  |   |   |   | 5,712 |   |
| Other                                       |   |                        | 2,147  |   |   |   | 2,397 |   |
| Total gross deferred tax assets             |   |                        | 29,151 |   |   |   | 23,094 |   |
| Less: valuation allowance                   |   |                        | (1,869 | ) |   |   | (1,557 | ) |
| Deferred tax assets                         |   |                        | 27,282 |   |   |   | 21,537 |   |
|                                        |   |                        |   |   |   |   |   |   |
| Deferred tax liabilities:                   |   |                        |   |   |   |   |   |   |
| Goodwill                                    |   |                        | 5,307  |   |   |   | 3,171 |   |
| Inventories                                 |   |                        | 692    |   |   |   | 1,139 |   |
| Depreciation                                |   |                        | 2,786  |   |   |   | 762 |   |
| Translation Gains/Losses                    |   |                        | 154    |   |   |   | 870 |   |
| IRC §108(e) Gain Deferral              |   |                        | 541    |   |   |   | - |   |
| Other                                       |   |                        | 1,813  |   |   |   | 1,427 |   |
| Total gross deferred tax liabilities        |   |                        | 11,293 |   |   |   | 7,369 |   |
|                                        |   |                        |   |   |   |   |   |   |
| Net deferred tax assets                     |   | $                           | 15,989 |   |   | $ | 14,168 |   |

----

Table of Contents

|                                       |   | Year Ended October 31, |   |
|--------------------------------------------|--------|-----------------------------|--------|
|                                       |   | 2009                        |   |   | 2008 |   |   | 2007 |   |
|                                       |   |                        |   |   |   |   |   |   |   |
| Federal income tax at the statutory rate   |   |                        | 35.0   | % |   |   | (35.0 | %) |   |   | 35.0 | % |
| Permanent Goodwill Impairment              |   |                        | 0.0    | % |   |   | 149.0 | % |   |   | 0.0 | % |
| Stargames PC4 software technology          |   |                        | 0.0    | % |   |   | 0.0 | % |   |   | (46.9 | %) |
| Interest expense                           |   |                        | (3.6   | %) |   |   | (21.7 | %) |   |   | (5.7 | %) |
| Research & development benefits        |   |                        | (2.4   | %) |   |   | (12.2 | %) |   |   | (7.4 | %) |
| Manufacturing deduction                    |   |                        | (1.5   | %) |   |   | (9.1 | %) |   |   | (0.6 | %) |
| Foreign dividend inclusion                 |   |                        | 2.0    | % |   |   | 10.1 | % |   |   | 0.0 | % |
| Stock compensation                         |   |                        | (2.1   | %) |   |   | 8.0 | % |   |   | 1.8 | % |
| Valuation allowances                       |   |                        | 0.2    | % |   |   | 13.5 | % |   |   | 1.1 | % |
| Unrecognized tax benefits                  |   |                        | (0.4   | %) |   |   | 4.5 | % |   |   | 0.0 | % |
| State income taxes, net of federal benefit |   |                        | 1.9    | % |   |   | 7.4 | % |   |   | 2.1 | % |
| Withholding taxes                          |   |                        | 2.7    | % |   |   | 10.1 | % |   |   | 2.9 | % |
| Foreign tax credits                        |   |                        | (4.0   | %) |   |   | (11.1 | %) |   |   | (2.9 | %) |
| Foreign Rate Differential                  |   |                        | 1.2    | % |   |   | 27.5 | % |   |   | 2.6 | % |
| Other                                      |   |                        | 3.3    | % |   |   | 1.4 | % |   |   | 4.0 | % |
| Effective tax rate                         |   |                        | 32.3   | % |   |   | 142.4 | % |   |   | (14.0 | %) |

----

Table of Contents

|                                               |   | Year Ended October 31, |   |
|----------------------------------------------------|--------|-----------------------------|--------|
|                                               |   | 2009                        |   |   | 2008 |   |
|                                               |   | (In thousands)              |   |
| Balance at adoption                                |   | $                           | 1,484  |   |   | $ | 1,334 |   |
| Increases related to prior year tax positions      |   |                        | 18     |   |   |   | 24 |   |
| Decreases related to prior year tax positions      |   |                        | (22    | ) |   |   | - |   |
| Increases related to current year tax positions    |   |                        | 100    |   |   |   | 126 |   |
| Decreases related to current year tax positions    |   |                        | -      |   |   |   | - |   |
| Reductions for settlements with taxing authorities |   |                        | (258   | ) |   |   | - |   |
| Reductions due to lapse of statutes of limitations |   |                        | -      |   |   |   | - |   |
| Balance at year end                                |   | $                           | 1,322  |   |   | $ | 1,484 |   |

----

Table of Contents

|                           |   | Year Ended October31, |    |
|--------------------------------|--------|-----------------------|---------|
|                           |   | 2009                  |    |   | 2008 |   |   | 2007 |   |
|                           |   | (In thousands)        |    |
| Revenue:                       |   |                  |    |   |   |   |   |   |   |
| Utility                        |   | $                     | 71,707  |   |   | $ | 80,893 |   |   | $ | 78,457 |   |
| Proprietary Table Games        |   |                  | 38,697  |   |   |   | 38,594 |   |   |   | 33,125 |   |
| Electronic Table Systems       |   |                  | 22,342  |   |   |   | 27,461 |   |   |   | 27,890 |   |
| Electronic Gaming Machines     |   |                  | 46,598  |   |   |   | 42,898 |   |   |   | 39,269 |   |
| Unallocated Corporate          |   |                  | 83      |   |   |   | 160 |   |   |   | 110 |   |
|                           |   | $                     | 179,427 |   |   | $ | 190,006 |   |   | $ | 178,851 |   |
| Gross profit (loss):           |   |                  |    |   |   |   |   |   |   |   |   |   |
| Utility                        |   | $                     | 40,513  |   |   | $ | 46,097 |   |   | $ | 48,086 |   |
| Proprietary Table Games        |   |                  | 32,079  |   |   |   | 31,983 |   |   |   | 28,154 |   |
| Electronic Table Systems       |   |                  | 9,430   |   |   |   | 13,068 |   |   |   | 13,891 |   |
| Electronic Gaming Machines     |   |                  | 23,643  |   |   |   | 19,662 |   |   |   | 14,027 |   |
| Unallocated Corporate          |   |                  | 6       |   |   |   | 92 |   |   |   | (292 | ) |
|                           |   | $                     | 105,671 |   |   | $ | 110,902 |   |   | $ | 103,866 |   |
| Operating income (loss):       |   |                  |    |   |   |   |   |   |   |   |   |   |
| Utility                        |   | $                     | 32,742  |   |   | $ | 36,078 |   |   | $ | 33,783 |   |
| Proprietary Table Games        |   |                  | 29,035  |   |   |   | 28,957 |   |   |   | 23,465 |   |
| Electronic Table Systems       |   |                  | 3,427   |   |   |   | (16,105 | ) |   |   | 6,600 |   |
| Electronic Gaming Machines     |   |                  | 16,529  |   |   |   | 11,693 |   |   |   | 7,390 |   |
| Unallocated Corporate          |   |                  | (57,058 | ) |   |   | (61,682 | ) |   |   | (46,656 | ) |
|                           |   | $                     | 24,675  |   |   | $ | (1,059 | ) |   | $ | 24,582 |   |
| Depreciation and amortization: |   |                  |    |   |   |   |   |   |   |   |   |   |
| Utility                        |   | $                     | 8,997   |   |   | $ | 9,497 |   |   | $ | 8,634 |   |
| Proprietary Table Games        |   |                  | 4,836   |   |   |   | 4,310 |   |   |   | 2,661 |   |
| Electronic Table Systems       |   |                  | 6,715   |   |   |   | 6,335 |   |   |   | 5,305 |   |
| Electronic Gaming Machines     |   |                  | 840     |   |   |   | 1,422 |   |   |   | 586 |   |
| Unallocated Corporate          |   |                  | 3,285   |   |   |   | 3,215 |   |   |   | 3,562 |   |
|                           |   | $                     | 24,673  |   |   | $ | 24,779 |   |   | $ | 20,748 |   |
| Capital expenditures:          |   |                  |    |   |   |   |   |   |   |   |   |   |
| Utility                        |   | $                     | 6,889   |   |   | $ | 6,699 |   |   | $ | 3,352 |   |
| Proprietary Table Games        |   |                  | 1,469   |   |   |   | 1,338 |   |   |   | 1,969 |   |
| Electronic Table Systems       |   |                  | 7,836   |   |   |   | 6,860 |   |   |   | 8,004 |   |
| Electronic Gaming Machines     |   |                  | 24      |   |   |   | 691 |   |   |   | 103 |   |
| Unallocated Corporate          |   |                  | 1,415   |   |   |   | 1,838 |   |   |   | 1,828 |   |
|                           |   | $                     | 17,633  |   |   | $ | 17,426 |   |   | $ | 15,256 |   |
| Assets, end of year:           |   |                  |    |   |   |   |   |   |   |   |   |   |
| Utility                        |   | $                     | 113,994 |   |   | $ | 105,472 |   |   | $ | 121,822 |   |
| Proprietary Table Games        |   |                  | 52,722  |   |   |   | 47,281 |   |   |   | 53,635 |   |
| Electronic Table Systems       |   |                  | 51,003  |   |   |   | 48,752 |   |   |   | 89,259 |   |
| Electronic Gaming Machines     |   |                  | 41,468  |   |   |   | 26,170 |   |   |   | 37,495 |   |
| Unallocated Corporate          |   |                  | 26,282  |   |   |   | 34,271 |   |   |   | 57,556 |   |
|                           |   | $                     | 285,469 |   |   | $ | 261,946 |   |   | $ | 359,767 |   |

----

Table of Contents

|                            |   | Year Ended October 31, |    |
|---------------------------------|--------|-----------------------------|---------|
|                            |   | 2009                        |    |   | 2008 |   |   | 2007 |   |
|                            |   | (In thousands)              |    |
| Revenue:                        |   |                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| United States                   |   | $                           | 89,073  |   |   |   | 49.7 | % |   | $ | 90,292 |   |   |   | 47.5 | % |   | $ | 80,331 |   |   |   | 44.9 | % |
| Canada                          |   |                        | 9,754   |   |   |   | 5.5 | % |   |   | 7,298 |   |   |   | 3.8 | % |   |   | 7,314 |   |   |   | 4.1 | % |
| Other North America             |   |                        | 3,458   |   |   |   | 1.9 | % |   |   | 2,235 |   |   |   | 1.2 | % |   |   | 1,828 |   |   |   | 1.0 | % |
| Europe                          |   |                        | 7,751   |   |   |   | 4.3 | % |   |   | 14,631 |   |   |   | 7.7 | % |   |   | 9,702 |   |   |   | 5.4 | % |
| Australia                       |   |                        | 56,767  |   |   |   | 31.6 | % |   |   | 57,692 |   |   |   | 30.4 | % |   |   | 52,417 |   |   |   | 29.3 | % |
| Asia                            |   |                        | 10,251  |   |   |   | 5.7 | % |   |   | 11,761 |   |   |   | 6.2 | % |   |   | 21,809 |   |   |   | 12.2 | % |
| Other                           |   |                        | 2,373   |   |   |   | 1.3 | % |   |   | 6,097 |   |   |   | 3.2 | % |   |   | 5,450 |   |   |   | 3.1 | % |
|                            |   | $                           | 179,427 |   |   |   | 100.0 | % |   | $ | 190,006 |   |   |   | 100.0 | % |   | $ | 178,851 |   |   |   | 100.0 | % |
| Long-lived assets, end of year: |   |                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| United States                   |   | $                           | 72,659  |   |   |   | 37.7 | % |   | $ | 75,578 |   |   |   | 41.6 | % |   | $ | 95,193 |   |   |   | 36.6 | % |
| Austria                         |   |                        | 47,911  |   |   |   | 24.8 | % |   |   | 46,012 |   |   |   | 25.3 | % |   |   | 56,618 |   |   |   | 21.8 | % |
| Australia                       |   |                        | 64,599  |   |   |   | 33.5 | % |   |   | 52,652 |   |   |   | 29.0 | % |   |   | 107,691 |   |   |   | 41.5 | % |
| Other                           |   |                        | 7,681   |   |   |   | 4.0 | % |   |   | 7,305 |   |   |   | 4.1 | % |   |   | 300 |   |   |   | 0.1 | % |
|                            |   | $                           | 192,850 |   |   |   | 100.0 | % |   | $ | 181,547 |   |   |   | 100.0 | % |   | $ | 259,802 |   |   |   | 100.0 | % |

| October 31, |   | (In thousands) |   |
|-------------|--------|----------------|--------|
|        |   |           |   |
| 2010        |   |           | 2,345  |   |
| 2011        |   |           | 2,200  |   |
| 2012        |   |           | 1,507  |   |
| 2013        |   |           | 537    |   |
| 2014        |   |           | 366    |   |
| Thereafter  |   |           | 305    |   |
|        |   | $              | 7,260  |   |

----

Table of Contents

----

Table of Contents

----

Table of Contents

----

Table of Contents

----

Table of Contents

----

Table of Contents

|   | 1. | Breach of fiduciary duties for disseminating false and misleading statements. |
|--------|----|-------------------------------------------------------------------------------|

|   | 2. | Breach of fiduciary duties for failing to maintain internal controls. |
|--------|----|-----------------------------------------------------------------------|

|   | 3. | Unjust enrichment. |
|--------|----|--------------------|

|   | 4. | Abuse of control. |
|--------|----|-------------------|

|   | 5. | Gross mismanagement. |
|--------|----|----------------------|

----

Table of Contents

----

Table of Contents

IT

IT

|   | · | Modified the period end closing procedures to include physical counts of all inventory. |
|--------|--------|-----------------------------------------------------------------------------------------|

----

Table of Contents

----

Table of Contents

----

Table of Contents

IT

----

Table of Contents

IT

| · | Information regarding our directors, including the audit committee financial expert, appears under the caption “Election of Directors” in our Fiscal 2009 Proxy Statement and is incorporated herein by reference. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Executive Officers of the Registrant. The information under the caption “Executive Officers” in our Fiscal 2009 Proxy Statement is incorporated herein by reference. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Corporate Governance.  The information under the caption “Corporate Governance” in our Fiscal 2009 Proxy Statement is incorporated herein by reference. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Compliance with Section 16(a) of the Exchange Act. The information under the caption “Section 16(a) Beneficial Ownership Reporting Compliance” in our Fiscal 2009 Proxy Statement is incorporated herein by reference. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Information regarding our Code of Conduct appears in our Fiscal 2009 Proxy Statement, under the caption “Proposal 1—Election of Directors—Corporate Governance—Compliance Committee,” and is incorporated herein by reference. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Our Code of Conduct is publicly available on our website at www.shufflemaster.com and is also available in print to any shareholder upon request. Our website address is intended to be an inactive, textual reference only; none of the material on the website is part of this report. We may revise these policies from time to time and will promptly post any revisionson our website. If we grant any waiver from a provision of the Code of Conduct to our Chief Executive Officer or Chief Financial Officer, we will disclose the nature of such amendment or waiver on our website or in a report on Form 8-K. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

IT

IT

IT

IT

----

Table of Contents

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

| (a)    | 1.          | Financial Statements                                                                                                                                                                                                                                                                           |
|--------|-------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |        | See index to consolidated financial statements included as Item 8 to this Annual Report on Form 10-K.                                                                                                                                                                                     |
|   | 2.          | Financial Statement Schedules                                                                                                                                                                                                                                                                  |
|   |        | See Item 8 to this Annual Report on Form 10-K for applicable financial statement schedules.                                                                                                                                                                                               |
|   | 3.          | Management Contracts, Compensatory Plans and Arrangements                                                                                                                                                                                                                                      |
|   |        | Management contracts, compensatory plans and arrangements are indicated by the symbol “†” in exhibits 10.1 through 10.39 included in Item 15(b) of this Annual Report.                                                                                             |
| (b)    | Exhibits    |
|   | 3.1         | Articles of Incorporation of Shuffle Master, Inc. as amended July 15, 1992 (Incorporated by reference to exhibit 3.2 in our Annual Report on Form 10-K for the year ended October 31, 1995).                                                                          |
|   | 3.2         | Articles of Amendment to Articles of Incorporation of Shuffle Master, Inc., effective January 14, 2005 (Incorporated by reference to exhibit 3.2 to our Annual Report on Form 10-K, filed January 13, 2005).                                                          |
|   | 3.3         | Articles of Correction of Articles of Amendment of Articles of Incorporation of Shuffle Master, Inc., effective March 15, 2005 (Incorporated by reference to exhibit 3.1 to our Current Report on Form 8-K, filed March 18, 2005).                                    |
|   | 3.4         | Amended and Restated Bylaws of Shuffle Master, Inc., effective November 11, 2008 (Incorporated by reference to exhibit 3.4 to our Current Report on Form 8-K, filed November 13, 2008).                                                                                                   |
|   | 4.1         | Registration Rights Agreement dated May 13, 2004, by and between Casinos Austria AG on the one hand and Shuffle Master, Inc. on the other hand (Incorporated by reference to exhibit 10.2 in our Quarterly Report on Form 10-Q for the quarter ended April 30, 2004). |
|   | 10.1† | Shuffle Master, Inc. 2002 Stock Option Plan (Incorporated by reference to Exhibit B in our Proxy Statement dated February 11, 2002).                                                                                                                                            |
|   | 10.2† | Amendment to the Shuffle Master, Inc. 2002 Stock Option Plan (Incorporated by reference to exhibit 10.33 in our Quarterly Report on Form 10-Q for the quarter ended April 30, 2002).                                                                                       |
|   | 10.3† | Shuffle Master, Inc. Restated Outside Directors’ Option Plan dated January 24, 2002 (Incorporated by reference to exhibit 10.32 in our Annual Report on Form 10-K for the year ended October 31, 2001).                                                         |

|   | 10.4† | Shuffle Master, Inc. 2004 Equity Incentive Plan for Non-Employee Directors (Incorporated by reference to our Proxy Statement dated February 23, 2004).                                                                                                                                                                                           |
|--------|-------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | 10.5† | Employment Agreement, by and between Shuffle Master, Inc. and Brooke Dunn, dated January 9, 2006 (Incorporated by reference to exhibit 10.5 in our Annual Report on Form 10-K for the year ended October 31, 2005).                                                                                                               |
|   | 10.6† | Employment Agreement by and between Shuffle Master, Inc. and Paul Meyer dated October 31, 2005 (Incorporated by reference to exhibit 10.1 in our Current Report on Form 8-K, filed on November 4, 2005).                                                                                                                          |
|   | 10.7        | Distributorship Agreement by and between Machines Games Automatics, S.A. and Shuffle Master GMBH & CO KG dated May 17, 2005 (request for confidential treatment filed with SEC) (filed as exhibit 10.1 to our Current Report on Form 8-K, filed September 16, 2005).                                                |
|   | 10.8        | Call Option Deed by and between Shuffle Master, Inc. and CVC Limited dated November 15, 2005 (Incorporated by reference to exhibit 10.1 of our Current Report on Form 8-K, filed November 15, 2005).                                                                                                                         |
|   | 10.9        | Call Option Deed by and between Shuffle Master, Inc. and CVC Communication and Technology Pty Ltd. dated November 15, 2005 (Incorporated by reference to exhibit 10.2 of our Current Report on Form 8-K, filed November 15, 2005).                                                                                      |
|   | 10.10       | Pre-Bid Agreement between Shuffle Master, Inc. and Stargames Corporation Pty Limited dated November 15, 2005 (Incorporated by reference to exhibit 10.3 of our Current Report on Form 8-K, filed November 15, 2005).                                                                                                         |
|   | 10.11       | Shuffle Master Australasia Pty Ltd’s Bidder Statement, along with Stargames’ Target Statement, each dated November 15, 2005 (Incorporated by reference to exhibit 10.4 of our Current Report on Form 8-K, filed November 15, 2005).                                                                                   |
|   | 10.12       | Patent Licensing Agreement between Shuffle Master, Inc. and Progressive Gaming International Corporation dated September 29, 2006 (Request for Confidential Treatment filed with SEC).                                                                                                                                                           |
|   | 10.13       | Credit Agreement, dated November 30, 2006, among Shuffle Master, Inc., Deutsche Bank Trust Company Americas, Deutsche Bank, Deutsche Bank Securities, Inc. and Wells Fargo Bank, N.A. (Incorporated by reference to exhibit 10.1 of our Current Report on Form 8-K, filed December 6, 2006).                            |
|   | 10.14       | Amendment No. 1, dated April 5, 2007 to the Credit Agreement, dated as of November 30, 2006, among Shuffle Master, Inc., Deutsche Bank Trust Company Americas, as Administrative Agent and the lenders party thereto (Incorporated by reference to exhibit 10.1 in our Current Report on Form 8-K, filed April 6,2007). |
|   | 10.15       | Security Agreement, dated November 30, 2006, between Shuffle Master, Inc. and the guarantors party thereto in favor of Deutche Bank Trust Company Americas (Incorporated by reference to exhibit 10.2 of our Current Report on Form 8-K, filed December 6, 2006).                                                                 |
|   | 10.16       | Purchase Agreement by and among Shuffle Master, Inc., on the one hand, and Progressive Gaming International and Progressive Games, Inc. on the other hand, dated September 26, 2007 (Incorporated by reference to exhibit 10.1 (a) in our Current Report on form 8-K, filed September 28, 2007).                        |

----

Table of Contents

|   | 10.17        | Amended and Restated License Agreement by and among Shuffle Master, Inc., on the one hand, and Progressive Gaming International on the other hand, dated September 26, 2007 (Incorporated by reference to exhibit 10.1 (b) in our Current Report on Form 8-K, filed September 28, 2007).                                                      |
|--------|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | 10.18        | Software Distribution License Agreement by and among Shuffle Master, Inc. and its affiliates, on the one hand, and Progressive Gaming International Corporation and its affiliates, on the other hand, dated September 26, 2007 (Incorporated by reference to exhibit 10.1 in our Current Report on form 8-K, filed October 2,2007).               |
|   | 10.19† | First Amendment to Employment Agreement, by and between Shuffle Master, Inc. and Brooke Dunn (Incorporated by reference to exhibit 10.1 in our Current Report on Form 8-K, filed January 11, 2008).                                                                                                                                                     |
|   | 10.20† | Employment Agreement, by and between Shuffle Master, Inc. and Coreen Sawdon (Incorporated by reference to exhibit 10.1 in our Current Report on Form 8-K, filed March 6, 2008).                                                                                                                                                                         |
|   | 10.21† | Second Amendment to Employment Agreement, by and between Shuffle Master, Inc. and Mark L. Yoseloff (Incorporated by reference to exhibit 10.1 in our Current Report on Form 8-K, filed July 11, 2008).                                                                                                                                                                      |
|   | 10.22        | Amendment No. 2 to Credit Agreement, dated July 14, 2008, among Shuffle Master, Inc., Deutsche Bank Trust company Americas, as Deutsche Bank Securities Inc. and Wells Fargo Bank, N.A (Incorporated by reference to Exhibit 10.28 to Amendment No.1 to the Registration Statement on Form S-1 of Shuffle Master, Inc., Registration No. 333-12000, filedon July 14, 2008). |
|   | 10.23† | Second Amendment to Employment Agreement, by and between Shuffle Master, Inc. and Brooke Dunn (Incorporated by reference to exhibit 10.1 in our Current Report on Form 8-K, filed November 4, 2008).                                                                                                                                                    |
|   | 10.24† | Form of Indemnification Agreement (Incorporated by reference to exhibit 10.26 in our Current Report on Form 8-K, filed November 13, 2008).                                                                                                                                                                                                                        |
|   | 10.25† | Employment Agreement, by and between Shuffle Master, Inc. and David Lopez (Incorporated by reference to exhibit 10.1 in our Current Report on Form 8-K, filed November 20, 2008).                                                                                                                                                                            |
|   | 10.26† | First Amendment to Employment Agreement, by and between Shuffle Master, Inc. and David Lopez (Incorporated by reference to exhibit 10.2 in our Current Report on Form 8-K, filed November 20, 2008).                                                                                                                                                         |
|   | 10.27† | The Shuffle Master, Inc. 2004 Equity Incentive Plan (As Amended and Restated on December 31, 2008) (Incorporated by reference to exhibit 10.1 in our Current Report on Form 8-K, filed January 7, 2009).                                                                                                                                                                    |
|   | 10.28† | The Shuffle Master, Inc. 2004 Equity Incentive Plan For Non-Employee Directors (As Amended and Restated on December 31, 2008) (Incorporated by reference to exhibit 10.2 in our Current Report on Form 8-K, filed January 7, 2009).                                                                                                                                         |
|   | 10.29† | Amended and Restated Employment Agreement, by and between Shuffle Master, Inc. and Mark L. Yoseloff (Incorporated by reference to exhibit 10.3 in our Current Report on Form 8-K, filed January 7, 2009).                                                                                                                                                                   |
|   | 10.30† | Amended and Restated Covenant Not To Compete, by and between Shuffle Master, Inc. and Mark L. Yoseloff (Incorporated by reference to exhibit 10.4 in our Current Report on Form 8-K, filed January 7, 2009).                                                                                                                                                                |
|   | 10.31† | Amended and Restated Employment Agreement, by and between Shuffle Master, Inc. and Coreen Sawdon (Incorporated by reference to exhibit 10.5 in our Current Report on Form 8-K, filed January 7, 2009).                                                                                                                                                                      |
|   | 10.32† | Amended and Restated Employment Agreement, by and between Shuffle Master, Inc. and David Lopez (Incorporated by reference to exhibit 10.6 in our Current Report on Form 8-K, filed January 7, 2009).                                                                                                                                                                        |

|   | 10.33† | Amended and Restated Employment Agreement, by and between Shuffle Master, Inc. and Jerry Smith (Incorporated by reference to exhibit 10.1 in our Annual Report on Form 10-K for the year ended October 31, 2008). |
|--------|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | 10.34† | Amended and Restated Employment Agreement, by and between Shuffle Master, Inc. and Roger Snow (Incorporated by reference to exhibit 10.2 in our Annual Report on Form 10-K for the year ended October 31, 2008).  |
|   | 10.35† | Employment Agreement, by and between Shuffle Master, Inc. and Timothy J. Parrott (Incorporated by reference to exhibit 10.1 in our Current Report on Form 8-K, filed February 2, 2009).                                          |
|   | 10.36† | First Amendment to the Amended and Restated Employment Agreement, by and between Shuffle Master, Inc. and Mark L. Yoseloff (Incorporated by reference to exhibit 10.1 in our Current Report on Form 8-K, filed April 15, 2009)   |
|   | 10.37† | The Shuffle Master, Inc. 2004 Equity Incentive Plan (as Amended and Restated on January 28, 2009) (Incorporated by reference to Exhibit 10.1 of our Quarterly Report on Form 10-Q, filed June 9, 2009).                          |
|   | 10.38† | Employment Agreement, by and between Shuffle Master, Inc. and Linster W. Fox (Incorporated by reference to exhibit 10.1 in our Current Report on Form 8-K, filed August 6, 2009).                                                |
|   | 10.39† | Employment Agreement, by and between Shuffle Master, Inc. and Coreen Sawdon (Incorporated by reference to exhibit 10.1 in our Current Report on Form 8-K, filed August 14, 2009).                                                |
|   | 21           | Subsidiaries of Registrant                                                                                                                                                                                                       |
|   | 23           | Consent of Independent Registered Public Accounting Firm                                                                                                                                                                         |
|   | 31.1         | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                         |
|   | 31.2         | Certification of Acting Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                  |
|   | 32.1*        | Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                         |
|   | 32.2*        | Certification of Acting Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                  |

|   | Exhibits 32.1 and 32.2 are furnished to accompany this report on Form 10-K but shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise and shall not be deemed incorporated by reference into any registration statements filed under the Securities Act of 1933. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

|                    | SHUFFLE MASTER, INC. |
|-------------------------|----------------------|
|                    |                 |
| Dated: January 14, 2010 | By:                  | /s/ TIMOTHY J. PARROTT Chief Executive Officer |

| Signature                |                                                                 | Title            | Date |
|--------------------------|----------------------------------------------------------------------|------------------|------|
|                     |                                                                 |             |
| /s/ TIMOTHY J. PARROTT   | Chief Executive Officer (Principal Executive Officer)                | January 14, 2010 |
|  Timothy J. Parrott |                                                                 |             |
|                     |                                                                 |             |
|  /s/ LINSTER W. FOX | Chief Financial Officer (Principal Financial and Accounting Officer) | January 14, 2010 |
|  Linster W. Fox     |                                                                 |             |
|                     |                                                                 |             |
| /s/ PHILLIP C. PECKMAN   |  Chairman of the Board of Directors                             | January 14, 2010 |
|  Phillip C. Peckman |                                                                 |             |
|                     |                                                                 |             |
| /s/ LOUIS CASTLE         | Director                                                             | January 14, 2010 |
|  Louis Castle       |                                                                 |             |
|                     |                                                                 |             |
| /s/ GARRY W. SAUNDERS    | Director                                                             | January 14, 2010 |
|  Garry W. Saunders  |                                                                 |             |
|                     |                                                                 |             |
| /s/ JOHN R. BAILEY       | Director                                                             | January 14, 2010 |
| John R. Bailey           |

----