<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   ----------

                                    FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934

For the quarterly period ended                   March 31, 1999 
                                ------------------------------------------------


                          Commission file number 1-8300
                                                -------

                              WMS INDUSTRIES INC.
             ------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)
<TABLE>
<CAPTION>

<S>                                                                                     <C>                        
                     Delaware                                                           36-2814522                 
-------------------------------------------------------------------------------------------------------------------
(State or Other Jurisdiction of Incorporation or Organization)            (I.R.S. Employer Identification No.)


3401 North California Ave., Chicago, IL                                                   60618              
-------------------------------------------------------------------------------------------------------------------
(Address of Principal Executive Offices)                                                (Zip Code)

</TABLE>

Registrant's telephone number, including area code  (773) 961-1111
                                                   ----------------------------

                                      N/A 
--------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last
report.


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

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 30,154,861 shares of common
stock, $.50 par value, were outstanding at May 3, 1999 after deducting 77,312
shares held as treasury shares.


<PAGE>   2

<TABLE>
<CAPTION>
                              WMS INDUSTRIES INC.

                                     INDEX
                                                                              PAGE NO
<S>      <C>                                                                   <C>
PART I.  FINANCIAL INFORMATION:

    ITEM 1. Financial Statements:
            Condensed Consolidated Statements of Income -
            Three and nine months ended March 31, 1999 and 1998............       2
                                                                              
            Condensed Consolidated Balance Sheets -                           
            March 31, 1999 and June 30, 1998...............................     3-4
                                                                              
            Condensed Consolidated Statements of Cash Flows -                 
            Nine months ended March 31, 1999 and 1998......................       5
                                                                              
            Notes to Condensed Consolidated Financial Statements...........       6
                                                                              
                                                                              
    ITEM 2. Management's Discussion and Analysis of Financial Condition       
             and Results of Operations.....................................    7-10
                                                                              
                                                                              
PART II.  OTHER INFORMATION:                                                  
                                                                              
    ITEM 1. Legal Proceedings..............................................      11
                                                                              
    ITEM 4. Submission of Matters to a Vote of Security-Holders............      11
                                                                              
    ITEM 6. Exhibits and Reports on Form 8-K...............................      12
                                                                              
                                                                              
                                                                              
SIGNATURE   ...............................................................      13
</TABLE>                                                                      






<PAGE>   3

PART I.  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS

                              WMS INDUSTRIES INC.

                  CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                     (THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                  (UNAUDITED)
<TABLE>
<CAPTION>
                                                                    Three months ended                   Nine months ended
                                                                         March 31,                           March 31,
                                                               -----------------------------      ----------------------------------
                                                                   1999            1998              1999              1998
                                                               ---------        ---------         ---------         --------- 
<S>                                                            <C>              <C>               <C>               <C>       
REVENUES ..............................................        $  48,954        $  20,511         $ 114,744         $  63,943 
                                                                                                                    
                                                                                                                    
COSTS AND EXPENSES                                                                                                  
     Cost of sales ....................................           34,415           16,203            84,825            48,518 
                                                                                                                    
     Research and development .........................            3,757            3,128            10,127             9,410 
     Selling and administrative .......................            8,226            7,731            23,118            21,399 
     Adjustment to common stock options ...............              539           59,890             1,140            59,890 
                                                               ---------        ---------         ---------         --------- 
Total costs and expenses ..............................           46,937           86,952           119,210           139,217 
                                                               ---------        ---------         ---------         --------- 
Operating income (loss) ...............................            2,017          (66,441)           (4,466)          (75,274) 
                                                                                                                    
Interest and other income and expense, net ............              946            1,015             2,785             2,605 
                                                               ---------        ---------         ---------         --------- 
Income (loss) from continuing operations                                                                            
     before income taxes ..............................            2,963          (65,426)           (1,681)          (72,669) 
                                                                                                                    
(Provision) credit for income taxes ...................           (1,126)          22,076               639            24,828 
                                                               ---------        ---------         ---------         --------- 
Income (loss) from continuing operations ..............            1,837          (43,350)           (1,042)          (47,841) 
                                                                                                                    
Income from discontinued operations - Video games                                                                   
      segment, net ....................................               --            4,522                --            26,746 
                                                               =========        =========         =========         ========= 
Net income (loss) .....................................        $   1,837        $ (38,828)        $  (1,042)        $ (21,095)
                                                               =========        =========         =========         ========= 
                                                                                                                    
                                                                                                                    
Earnings per share of common stock - basic and diluted:                                                             
     Income (loss) from continuing operations .........        $    0.06        $   (1.62)        $   (0.04)        $   (1.84)
                                                                                                                    
                                                               =========        =========         =========         =========
     Net income (loss) ................................        $    0.06        $   (1.45)        $   (0.04)        $   (0.81)
                                                               =========        =========         =========         =========
                                                                                                                    
Weighted average shares outstanding ...................           30,055           26,843            29,020            25,948
                                                               =========        =========         =========         =========
</TABLE>

See notes to condensed consolidated financial statements.

                                       2
<PAGE>   4

                               WMS INDUSTRIES INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                             (THOUSANDS OF DOLLARS)
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                 March 31,           June 30,
                                                                   1999                1998
                                                               -------------      ------------
ASSETS                                                          

CURRENT ASSETS:
<S>                                                             <C>                 <C>      
     Cash and cash equivalents .....................            $  41,190           $  36,943
     Short-term investments ........................               22,900              26,000
                                                                ---------           ---------
                                                                   64,090              62,943
     Receivables, net of allowances of $3,017 and
     $2,397 ........................................               40,490              30,432
     Inventories, at lower of cost (Fifo) or market:
         Raw materials and work in progress ........               21,739              17,523
         Finished goods ............................               19,014              22,097
                                                                ---------           ---------
                                                                   40,753              39,620

     Income tax receivable .........................                3,889              10,114
     Deferred income taxes .........................               17,910              18,155
     Other current assets ..........................                  330                 769
                                                                ---------           ---------
         Total current assets ......................              167,462             162,033

Property, plant and equipment ......................               63,214              57,327
Less: accumulated depreciation .....................              (27,494)            (24,720)
                                                                ---------           ---------
                                                                   35,720              32,607

Other assets .......................................               22,324              12,882
                                                                =========           =========
                                                                $ 225,506           $ 207,522
                                                                =========           =========
</TABLE>

See notes to condensed consolidated financial statements.

                                       3
<PAGE>   5

                               WMS INDUSTRIES INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                             (THOUSANDS OF DOLLARS)
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                      March 31,            June 30,
                                                                        1999                1998
                                                                      ---------           ---------
<S>                                                                   <C>                 <C>
LIABILITIES AND STOCKHOLDERS' EQUITY                                                            

CURRENT LIABILITIES:                                                                            
     Accounts payable .............................................   $  19,997           $   7,818
     Accrued compensation and related benefits ....................       4,704               3,020
     Accrued liability related to WMS Gaming Inc. patent litigation      34,709              35,372
     Other accrued liabilities ....................................       3,841               3,757
                                                                      ---------           ---------
         Total current liabilities ................................      63,251              49,967


Deferred income taxes .............................................         869                 869
Other noncurrent liabilities ......................................       1,396               1,395

STOCKHOLDERS' EQUITY:

     Preferred stock (5,000,000 shares authorized, none issued) ...          --                  --
     Common stock (30,137,695 and 28,032,766 shares issued) .......      15,069              14,016
     Additional paid-in capital ...................................     175,340             170,418
     Retained earnings (deficit) ..................................     (30,037)            (28,995)
                                                                      ---------           ---------
                                                                        160,372             155,439
     Treasury stock, at cost (77,312 and 52,312 shares) ...........        (382)               (148)
                                                                      ---------           ---------
         Total stockholders' equity ...............................     159,990             155,291
                                                                      ---------           ---------
                                                                      $ 225,506           $ 207,522
                                                                      =========           =========
</TABLE>

See notes to condensed consolidated financial statements.

                                       4


<PAGE>   6

                              WMS INDUSTRIES INC.
                                 -------------

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (THOUSANDS OF DOLLARS)
                                  (UNAUDITED)
<TABLE>
<CAPTION>
                                                                              Nine months ended
                                                                                   March 31,
                                                                      ----------------------------------
                                                                             1999               1998
                                                                      ----------------     -------------
OPERATING ACTIVITIES:                                                 
<S>                                                                       <C>                <C>      
Net loss .............................................................    $(1,042)           $(21,095)
Adjustments to reconcile net loss to net cash provided by
    operating activities:
        Income from discontinued operations - video games segment, net         --             (26,746)
        Depreciation and amortization ................................      5,415               4,456
        Receivables provision ........................................        733                 611
        WMS common stock issued in common stock option adjustment ....         --              14,975
        Common stock option adjustment accrual .......................         --              44,836
        Deferred income taxes ........................................        245                 502
        Tax benefit from exercise of common stock options ............         75               2,174
        Decrease resulting from changes in operating assets
        and liabilities ..............................................     (4,934)            (18,450)
                                                                          -------            --------
Net cash provided by operating activities ............................        492               1,263

INVESTING ACTIVITIES:
Purchase of property, plant and equipment ............................     (6,264)             (3,591)
Net change in short-term investments .................................      3,100              41,400
                                                                          -------            --------
Net cash provided (used) by investing activities .....................     (3,164)             37,809

FINANCING ACTIVITIES:
Cash received on exercise of common stock options ....................      6,919              14,089
Redemption of long-term debt .........................................         --                (178)
                                                                          -------            --------
Net cash provided by financing activities ............................      6,919              13,911

DISCONTINUED OPERATIONS:
Payment of transaction cost - video games segment ....................         --                (168)
                                                                          -------            --------
Net cash (used) by discontinued operations ...........................         --                (168)

                                                                          -------            --------
Increase in cash and cash equivalents ................................      4,247              52,815
Cash and cash equivalents at beginning of period .....................     36,943               1,853
                                                                          -------            --------
Cash and cash equivalents at end of period ...........................    $41,190            $ 54,668
                                                                          =======            ========
</TABLE>

See notes to condensed consolidated financial statements

                                       5
<PAGE>   7

                               WMS INDUSTRIES INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.       FINANCIAL STATEMENTS
         The accompanying unaudited condensed consolidated financial statements
         have been prepared in accordance with generally accepted accounting
         principles for interim financial information, the instructions to Form
         10-Q and Article 10 of Regulation S-X. Accordingly, they do not include
         all of the information and footnotes required by generally accepted
         accounting principles for complete financial statements. In the opinion
         of management, all adjustments (consisting of normal recurring
         accruals) considered necessary for a fair presentation have been
         included. Due to the seasonality of the Company's businesses, operating
         results for the quarter and nine months ended March 31, 1999 are not
         necessarily indicative of the results that may be expected for the
         fiscal year ending June 30, 1999. For further information, refer to the
         consolidated financial statements and footnotes thereto included in the
         Company's Annual Report on Form 10-K for the year ended June 30, 1998.


2.       DISCONTINUED OPERATIONS
         On August 11, 1997 the Company announced a planned spin-off of its
         86.8% interest in Midway Games Inc. Midway Games Inc.'s operations
         entirely comprised the video game business segment. That spin-off was
         completed on April 6, 1998. Accordingly, the results of operations for
         the quarter and nine months ended March 31, 1998 of the video game
         segment has been reflected as discontinued operations in the condensed
         consolidated statements of income and cash flows.


3.       LITIGATION
         See Item 1 of Part II for the status of litigation.


                                       6
<PAGE>   8

                               WMS INDUSTRIES INC.


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

This Quarterly Report on Form 10-Q contains certain forward looking statements
concerning future business conditions and the outlook for the Company based on
currently available information that involve risks and uncertainties. The
Company's actual results could differ materially from those anticipated in the
forward looking statements as a result of certain risks and uncertainties,
including, without limitation, the Company's prior quarterly losses from
continuing operations, financial strength of the gaming and pinball industries,
the expansion of legalized gaming into new markets, the development,
introduction and success of new games and new technologies and the ability to
maintain the scheduling of such introductions, the ability of the Company to
qualify for and maintain gaming licenses and approvals, the outcome of certain
legal proceedings to which the Company is a party and other risks more fully
described under "Item 1. Business--Factors Affecting Future Performance" in the
Company's Annual Report on Form 10-K.


FINANCIAL CONDITION
Cash flows from operating, investing and financing activities during the nine
months ended March 31, 1999 resulted in a net cash increase of $4,247,000 as
compared with net cash provided of $52,983,000 during the nine months ended
March 31, 1998. The cash increase in 1998 was primarily from the sale short-term
investments. See condensed consolidated statements of cash flows on page 5.

Cash provided by operating activities before changes in operating assets and
liabilities was $5,426,000 for the nine months ended March 31, 1999 as compared
with $19,713,000 for the nine months ended March 31, 1998.

The changes in operating assets and liabilities, as shown in the condensed
consolidated statements of cash flows, resulted in $4,934,000 of cash outflow
during the nine months ended March 31, 1999 compared with a cash outflow of
$18,450,000 during the nine months ended March 31, 1998. Cash outflow in the
nine months ended March 31, 1999 was primarily due to the increase in gaming
devices used in participation leases and an increase in receivables, offset, in
part, by a reduction in income tax receivables and an increase in accounts
payable from the comparable balances at June 30, 1998. The cash outflow for the
nine months ended March 31, 1998 was primarily due to increased inventories and
income tax receivables from the comparable June 30, 1997 balances.

Cash used by investing activities was $3,164,000 for the nine months ended March
31, 1999 compared with cash provided of $37,809,000 for the nine months ended
March 31, 1998. Cash used for the purchase of property, plant and equipment
during the nine months ended March 31, 1999 was $6,264,000 compared with
$3,591,000 for the nine months ended March 31, 1998. Net cash of $3,100,000 was
provided from the sale of short-term investments during the nine months ended
March 31, 1999, compared with $41,400,000 from the sale of short-term
investments in the prior year's nine-month period.

Cash provided by financing activities, which was primarily from common stock
option proceeds, for the nine months ended March 31, 1999 was $6,919,000
compared with $13,911,000 in the prior year.

Management believes that cash and cash equivalents and short-term investments
will be adequate to fund the anticipated level of inventories and receivables
required in the operation of the business as well as cash required to fund the
Company's other presently anticipated needs. See Note 3 to the financial
statements regarding patent litigation.


                                       7
<PAGE>   9
RESULTS OF OPERATIONS
The following summarizes the Condensed Consolidated Statements of Income for the
periods shown in the format presented as segment information in the notes to the
year-end consolidated financial statements (thousands of dollars):

<TABLE>
<CAPTION>
                                                                Three months ended          Nine months ended
                                                                      March 31,                  March 31,
                                                                      ---------                  ---------
                                                                  1999         1998         1999        1998
                                                                  ----         ----         ----        ----
REVENUES
<S>                                                            <C>          <C>          <C>          <C>      
  Gaming ...................................................   $  34,665    $  15,678    $  79,084    $  34,753
  Pinball, novelty and cabinets ............................      10,495        4,833       24,430       29,190
  Contract manufacturing ...................................       3,794         --         11,230         --
                                                               ---------    ---------    ---------    ---------
     Total revenues ........................................   $  48,954    $  20,511    $ 114,744    $  63,943
                                                               =========    =========    =========    =========

GROSS PROFIT (LOSS)
  Gaming ...................................................   $  13,454    $   4,729    $  28,363    $  10,401
  Pinball, novelty and cabinets ............................         599         (421)          57        5,024
  Contract manufacturing ...................................         486         --          1,499         --
                                                               ---------    ---------    ---------    ---------
     Total gross profit ....................................   $  14,539    $   4,308    $  29,919    $  15,425
                                                               =========    =========    =========    =========

OPERATING INCOME (LOSS)
  Gaming ...................................................   $   4,818    $  (2,609)   $   5,721    $  (9,953)
  Pinball, novelty and cabinets ............................      (2,042)      (3,526)      (8,011)      (4,296)
  Contract manufacturing ...................................         333         --            975         --
  WMS common stock option adjustment .......................        (539)     (59,890)      (1,140)     (59,890)
  Unallocated general corporate expenses ...................        (553)        (416)      (2,011)      (1,135)
                                                               ---------    ---------    ---------    ---------
     Total operating income (loss) .........................       2,017      (66,441)      (4,466)     (75,274)

Interest and other income and expense - net ................         946        1,015        2,785        2,605
                                                               ---------    ---------    ---------    ---------
Income (loss) from continuing operations before income taxes   $   2,963    $ (65,426)   $  (1,681)   $ (72,669)
                                                               =========    =========    =========    =========
</TABLE>


THREE MONTHS ENDED MARCH 31, 1999 COMPARED WITH
THREE MONTHS ENDED MARCH 31, 1998

Consolidated revenues increased to $48,954,000 in the quarter ended March 31,
1999 from $20,511,000 in the quarter ended March 31, 1998. Gaming revenues
increased $18,987,000 or 121% from the prior year. The gaming revenue increase
results primarily from the sale of a greater number of models of video gaming
devices and reel type slot machines in the March 31, 1999 quarter because of the
market acceptance of new models of these gaming devices introduced over the last
twelve months and revenues from the participation leases on the Monopoly themed
models. Pinball, novelty and cabinet revenues increased by $5,662,000 or 117%.
Although, the industry wide demand for the current generation of pinball games
is weak, pinball sales increased due to initial sales of the Company's next
generation of pinball games.

After the April 6, 1998 spin-off of Midway Games Inc., the Company continues to
manufacture, under a contract, the coin-operated video games designed and sold
by Midway Games Inc. The March 31, 1999 quarter includes the new business
segment, contract manufacturing, which generated revenues of $3,794,000, gross
profit of $486,000 and segment operating income of $333,000. Prior to the
spin-off, the Company recorded these operations as a cost allocation between a
parent and consolidated subsidiary.

Consolidated gross profit increased to $14,539,000 in the quarter ended March
31, 1999 from $4,308,000 in the quarter ended March 31, 1998 due primarily to
increased gaming revenues and an increase in the gaming gross profit margin
pertcentage.

Consolidated operating income was $2,017,000 in the March 31, 1999 quarter
compared to a loss of $6,551,000 in the prior year quarter after excluding the
$59,890,000 common stock option adjustment expense. Gaming segment had operating
income of $4,818,000 compared to an operating loss of $2,609,000 because of the
higher 



                                       8

<PAGE>   10

revenue and gross profit margin. Pinball, novelty and cabinets segment
operating loss decreased by $1,484,000 because of higher revenues.

Income from continuing operations was $1,837,000, $.06 per share, for the
quarter ended March 31, 1999 compared with, in the March 31, 1998 quarter, a
loss from continuing operations of $(43,350,000), $(1.62) per share, which
includes an after tax charge of $39,917,000, $1.49 per share, from adjustments
to the WMS outstanding common stock options related to the distribution of
shares of Midway Games Inc. to WMS Industries shareholders of record on March
31, 1998.

Net income (loss), which includes continuing operations and in the March 31,
1998 quarter discontinued operations, was a net income of $1,837,000, $0.06 per
share, for the quarter ended March 31, 1999 compared to net loss of
$(38,828,000), $(1.45) per share, for the prior year fiscal quarter. Income from
continuing operations and net income for the March 31, 1999 quarter were
decreased by $330,000, $0.01 per share, from the adjustments to the then
outstanding WMS stock options vested during the thrid quarter of fiscal 1999.

NINE MONTHS ENDED MARCH 31, 1999 COMPARED WITH
NINE MONTHS ENDED MARCH 31, 1998

Consolidated revenues increased to $114,744,000 in the nine months ended March
31, 1999 from $63,943,000 in the nine months ended March 31, 1998. Gaming
revenues increased $44,331,000 or 128% from the prior year's nine-month period.
The gaming revenue increase, results primarily from the sale of a greater number
of models of video gaming devices and reel type slot machines in the March 31,
1999 nine-month period because of the market acceptance of new models of these
gaming devices introduced over the last twelve months. Pinball and novelty and
cabinet revenues decreased by $4,760,000 or 16% primarily due to decreased
industry wide demand for the current generation of pinball games partially
offset by initial sales of next generation pinball units.

After the April 6, 1998 spin-off of Midway Games Inc., the Company continues to
manufacture, under a contract, the coin-operated video games designed and sold
by Midway Games Inc. The March 31, 1999 nine-month period includes the contract
manufacturing business segment, which generated revenues of $11,230,000, gross
profit of $1,499,000 and segment operating income of $975,000. Prior to the
spin-off the Company recorded these operations as a cost allocation between a
parent and consolidated subsidiary.

Consolidated gross profit increased to $29,919,000 in the nine months ended
March 31, 1999 from $15,425,000 in the nine months ended March 31, 1998 due
primarily to increased gaming revenues, including the effects of participation
lease revenues, and a higher gaming gross profit margin percentage offset by the
effects of lower pinball revenues.

Consolidated operating loss decreased to $4,466,000 in the nine months ended
March 31, 1999 from $15,384,000 in the prior year period, after excluding the
$59,890,000 common stock option adjustment expense. Gaming segment had an
operating profit of $5,721,000 compared to an operating loss of $9,953,000
because of the higher revenue and gross margin. Pinball, novelty and cabinets
segment operating loss increased by $3,715,000 because of lower revenues, a
strike in the cabinet plant and continued research and development for the next
generation of pinball games.

Loss from continuing operations decreased to $1,042,000, $0.04 per share, from
$47,841,000, $1.84 per share, in nine months ended March 31, 1998. Net income
(loss), which includes continuing operations and in the March 31, 1998 nine
month period discontinued operations, was a net loss of $1,042,000, $0.04 per
share, for the nine months ended March 31, 1999 compared to net loss of
$21,095,000, $0.81 per share, for the prior year nine month period. Loss from
continuing operations and net loss for the nine months ended March 31, 1999 were
increased by $950,000, $0.03 per share, due to costs from a strike at the
Company's cabinet manufacturing facility that was settled in the March 31, 1999
quarter, and were also increased by $705,000, $0.02 per share, from the
adjustments to the outstanding WMS stock options vested during the nine months
ended March 31, 1999. Loss from continuing operations and net loss for the nine
months ended March 31, 1999 were reduced by $790,000, $.03 per share, from a net
recovery relating to purchased parts overcharges primarily from certain pinball
games suppliers in prior years. Net loss and loss from continuing operations for
the nine months ended

                                       9

<PAGE>   11

March 31, 1998 includes an after tax charge of $39,917,000, $1.54 per share,
relaxed to WMS common stock option adjustment described above.





YEAR 2000 UPDATE (YEAR 2000 READINESS DISCLOSURE)
The term Y2K is used to refer to a worldwide computer-related problem where
software programs and embedded programs in microprocessors will not work
properly when processing a date greater than December 31, 1999. This problem
results from using two digits to denote the third and fourth digit of a
four-digit year and a program assuming 19 to be the first two digits. Many
existing programs will continue to assume a 19 as the first and second digit
while a 20 or greater is required. A method of fixing the problem is for all
years to be denoted in a four-digit field and the program to recognize all four
digits as the year. This Y2K problem has resulted in significant remediation
costs and worldwide concern about the future operations of businesses and other
institutions.

The Company began addressing this problem in 1996. Management believes that most
of the systems utilized for the internal operations of the Company have been
made Y2K ready at an estimated cost of $1,100,000. The remaining Y2K related
work, which is primarily the upgrading of network servers, is expected to be Y2K
ready within four months at a cost estimated to be less than $400,000.
Management also believes that there are no Y2K issues with respect to the
functionality of any products sold in the past or to be sold in the future.

Management also believes that the assembly of products will not be affected by
malfunctioning tools or equipment using embedded microprocessors as the assembly
process is not heavily reliant on such tools or equipment.

The Company may be exposed to potential Y2K problems because we rely on
suppliers of components for gaming devices and pinball games. Management has
contacted certain suppliers and customers to assess the potential Y2K problems,
if any. A determination as to the customers' or suppliers' levels of y2K
readiness cannot be made however; based on the significant level of responses
received from suppliers and customeers, it appears that they are either Y2K
ready or working toward becoming Y2K ready. The company will continue to follow
up with those customers and suppliers who have not responded or indicated their
Y2K work is in process. If needed, to avoid potential Y2K problems detected by
our suppliers or customers, management will adjust the shipping dates for
products accordingly and at worst the Company would expect a short-term delay in
shipments. If such delay should occur it is not expected to have a material
effect on operating results for any reportable period.

The Company does not have a contingency plan for undetected Y2K problems. Those
problems, if they occur, will be dealt with immediately upon occurrence. The
effect on the Company of such occurrence cannot be determined at this time.

This discussion of Y2K risks and readiness contains certain forward-looking
statements concerning future conditions and our business outlook based on
currently available information that involve risks and uncertainties. The actual
state of our Y2K readiness and exposure could differ materially from that
anticipated in the forward-looking statements as a result of certain risks and
uncertainties, including, without limitation, the ability to obtain supplies and
energy, make deliveries, communicate with business partners, the Y2K readiness
of customers and other business partners.

  
                                     10

<PAGE>   12
PART II
OTHER INFORMATION


ITEM 1.   LEGAL PROCEEDINGS
The information concerning the patent litigation between WMS Gaming Inc. ("WGI")
and International Game Technology ("IGT") as set forth in "Item 3. Legal
Proceedings" in Registrant's Report on Form 10-K for the year ended June 30,
1998 ("1998 10-K") is incorporated herein by this reference. Capitalized terms
used and not otherwise defined herein shall have the same meanings as ascribed
to such terms in the 1998 10-K.

On February 28, 1997, the Federal District Court for the Northern District of
Illinois ("Trial Court") entered judgment in favor of IGT and against WGI in the
amount of $32,845,189 in the Model 400 slot machine action. The Trial Court
disposed of a post-judgment motion on October 1, 1997. WGI filed a notice of
appeal on October 20, 1997. A bond having been previously filed by WGI,
enforcement of the money judgment has been stayed pending the disposition of the
appeal. The appeal is now pending before the United States Court of Appeals for
the Federal Circuit.

On November 26, 1996, IGT commenced an action against WGI in the Trial Court
seeking a judgment declaring that WGI's Model 401 slot machine also infringes
the Telnaes patent. The complaint seeks a preliminary and permanent injunction
and treble damages. On December 18, 1996, the Trial Court granted IGT's motion
for a preliminary injunction and enjoined WGI from manufacture, use and sale of
the Model 401 slot machine. On April 10, 1997, WGI filed with the Trial Court a
motion to vacate the preliminary injunction based upon newly discovered
evidence. On May 5, 1998, the Trial Court denied the motion to vacate the
preliminary injunction. WGI filed a notice of appeal on May 7, 1998. The appeal
of the preliminary injunction order is now pending before the United States
Court of Appeals for the Federal Circuit.

GT Interactive Software Corp. ("GT Interactive") distributes certain of the home
video games of Midway Games Inc. ("Midway"), a former subsidiary of the Company,
in certain territories, as more fully described in "Item 1. Business" in
Midway's Annual Report on Form 10-K for the year ended June 30, 1998, which
descriptions are incorporated herein by this reference. On January 25, 1999, GT
Interactive filed suit against Midway and the Company and certain of their
respective subsidiaries in the Supreme Court of the State of New York, County of
New York, alleging breach of contract, tortious interference with prospective
business relations, defamation and other claims arising from the distribution
arrangements between GT Interactive and the Company. In its complaint, GT
Interactive seeks compensatory and punitive damages, and injunctive relief.
Midway believes that the claims made by GT Interactive are without merit and
Midway intends to vigorously defend against this lawsuit and to file substantial
counterclaims against GT Interactive. Pursuant to agreements previously entered
into between the Company and Midway, Midway is obligated to indemnify and defend
the Company from and against any liabilities or costs arising from this lawsuit.


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

The Annual Meeting of Stockholders of the Company was held on February 3, 1999.
The matters submitted to a vote of the Company's stockholders were (1) the
election of eight members to the Board of Directors; and (2) the ratification of
the appointment of Ernst & Young LLP as independent auditors for the 1999 fiscal
year.


                                       11

<PAGE>   13

The voting results of the Company's stockholders were as follows;

(1)  The Company's stockholders re-elected each of the eight incumbent
     directors, as follows

<TABLE>
<CAPTION>
            Nominee                                       For                           Withheld 
      -------------------                              ----------                       --------
<S>                                                    <C>                               <C>    
      William C. Bartholomay                           27,996,011                        344,668
      William E. McKenna                               27,995,740                        334,939
      Norman J. Menell                                 28,000,040                        330,639
      Louis J. Nicastro                                27,986,274                        344,405
      Neil D. Nicastro                                 27,986,274                        344,405
      Harvey Reich                                     27,998,040                        332,639
      David M. Satz, Jr.                               27,998,140                        332,539
      Ira S. Sheinfeld                                 27,695,515                        635,164
</TABLE>


(2)   Stockholders voted 28,160,186 shares (99.39% of the shares represented at
      the meeting) in favor of the ratification of the appointment of Ernst &
      Young LLP as independent auditors for the 1999 fiscal year; 132,621 shares
      (0.46% of the shares represented at the meeting) voted against approval,
      37,872 (less than 0.01% of the shares repressented at the meeting)
      abstained from voting or were unmarked and not voted.





ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits

27   Financial Data Schedule

99   "Item 1-Business" in the Annual Report of Form 10K of Midway Games Inc. for
     the fiscal year ended June 30, 1998 (File No. 001-12367) is hereby
     incorporated herein by reference to such annual report.

(b)  Reports on Form 8-K.
         None


                                       12
<PAGE>   14
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                   WMS INDUSTRIES INC.
                                   (Registrant)




Dated:  May 14, 1999               By: /S/ Harold H. Bach, Jr.
                                   ----------------------------------
                                   Harold H. Bach, Jr.
                                   Vice President-Finance
                                   Principal Financial and
                                   Chief Accounting Officer





                                       13
<PAGE>   15
                                  EXHIBIT INDEX



                    No.    Description

                    27   Financial Data Schedule

                    99   "Item 1-Business" in the Annual Report of Form 10K of
                         Midway Games Inc. for the fiscal year ended June 30,
                         1998 (File No. 001-12367) is hereby incorporated herein
                         by reference to such annual report.