<PAGE>
 
                      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                 December 31, 1997
                               -------------------------------------------------


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


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

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


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

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: 26,741,107 shares of common
stock, $.50 par value, were outstanding at January 30, 1998 after deducting
52,312 shares held as treasury shares.
<PAGE>
 
                              WMS INDUSTRIES INC.
                                 ____________

                                     INDEX

<TABLE>
<CAPTION>
                                                                           PAGE NO
                                                                           -------
Part I.  Financial Information:
-------
<S>            <C>                                                         <C>
  Item 1.      Financial Statements:
  -------

               Condensed Consolidated Statements of Income -
               Three and six months ended December 31, 1997 and 1996......  2

               Condensed Consolidated Balance Sheets -
               December 31, 1997 and June 30, 1997........................  3-4

               Condensed Consolidated Statements of Cash Flows -
               Six months ended December 31, 1997 and 1996................  5

               Notes to Condensed Consolidated Financial Statements.......  6-7


  Item 2.      Management's Discussion and Analysis of Financial Condition
  -------      and Results of Operations..................................  8-10


Part II.  Other Information:
--------

  Item 1.      Legal Proceedings..........................................  11
  -------

  Item 6.(a)   Exhibits...................................................  11
  ----------



Signature      ...........................................................  12
</TABLE>
<PAGE>

                              WMS INDUSTRIES INC.
                                 _____________

                  CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                     (Thousands, except per share amounts)
                                  (Unaudited)
<TABLE>
<CAPTION>


                                                                     Three months ended                 Six months ended
                                                                        December 31,                      December 31,
                                                                 --------------------------         -------------------------
                                                                     1997           1996               1997           1996
                                                                 ------------    ----------         ----------      ---------
<S>                                                              <C>             <C>                 <C>           <C>
Revenues........................................................  $    23,397     $  18,623          $  43,432      $  33,639

Costs and expenses  
  Cost of sales...............................................         17,630        14,496             32,315         26,547
  Research and development....................................          3,137         3,174              6,282          5,844
  Selling and administrative..................................          6,494         5,039             13,668          9,888
  Provisions related to WMS Gaming Inc. patent litigation.....           -           61,925               -            61,925
                                                                     --------       -------          ---------      ---------
Total costs and expenses......................................         27,261        84,634             52,265        104,204
                                                                     --------       -------          ---------      ---------
Operating loss..................................................       (3,864)      (66,011)            (8,833)       (70,565)

Interest and other income and expense, net......................          920         1,144              1,509          2,626
Interest expense................................................          522          (818)                81         (1,790)
                                                                     --------       -------          ---------      ---------
Loss from continuing operations before income tax credit........       (2,422)      (65,685)            (7,243)       (69,729)
Credit for income taxes.........................................          920        25,973              2,752         27,510
                                                                     --------       -------          ---------      ---------
Loss from continuing operations.................................       (1,502)      (39,712)            (4,491)       (42,219)

Income from discontinued operations, net:
    Video games segment.........................................       15,947        13,409             22,224         19,486
    Gain on initial public offering.............................         -           47,771               -            47,771
                                                                     --------       -------          ---------      ---------
Net income......................................................     $ 14,445       $21,468          $  17,733      $  25,038
                                                                     ========       =======          =========      =========

Earnings per share of common stock - basic and diluted:
  Loss from continuing operations...............................     $  (0.06)      $ (1.64)         $   (0.18)     $   (1.75)
                                                                     --------       -------          ---------      ---------
  Net income....................................................     $   0.54       $  0.89          $    0.70      $    1.04
                                                                     ========       =======          =========      =========
Weighted average shares outstanding.............................       26,471        24,193             25,510         24,175
                                                                     ========       =======          =========      =========

</TABLE>


See notes to condensed consolidated financial statements.

                                       2
<PAGE>
                              WMS INDUSTRIES INC.
                                   ________

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                            (Thousands of dollars)
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                                    December 31,         June 30,
                                                                       1997                1997
                                                                   -------------       ------------
ASSETS
------
<S>                                                                <C>                 <C>
Current assets:
  Cash and cash equivalents....................................       $  2,246            $  1,853
  Short-term investments.......................................         60,550              70,000
                                                                      --------            --------
                                                                        62,796              71,853
  Receivables, net of allowances of $5,781 and $5,439..........         27,026              25,246
  Receivable from Midway Games Inc.............................          2,265               2,029
  Inventories, at lower of cost (Fifo) or market:
     Raw materials and work in progress........................         25,655              22,087
     Finished goods............................................         18,768              11,502
                                                                      --------            --------
                                                                        44,423              33,589
  Deferred income taxes........................................         20,469              21,013
  Other current assets.........................................            418               1,259
                                                                      --------            --------
     Total current assets......................................        157,397             154,989

Investment in marketable equity securities.....................         20,719              15,000

Property, plant and equipment..................................         54,033              51,842
Less:  accumulated depreciation................................        (23,231)            (21,098)
                                                                      --------            --------
                                                                        30,802              30,744

Net assets of discontinued operations - video games segment....        112,937              90,713
Other assets...................................................         13,573              15,469
                                                                      --------            --------
                                                                      $335,428            $306,915
                                                                      ========            ========


See notes to condensed consolidated financial statements.

</TABLE>
                                       3
<PAGE>

                              WMS INDUSTRIES INC.
                                    _______

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                            (Thousands of dollars)
                                  (Unaudited)

<TABLE> 
<CAPTION> 
                                                                         December 31,         June 30,
                                                                            1997                1997
                                                                        -------------       ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
<S>                                                                     <C>                 <C> 
Current liabilities:
  Accounts payable...................................................     $   5,455          $   5,920
  Accrued compensation and related benefits..........................         4,598              3,223
  Accrued discontinuance costs.......................................         1,422              1,650
  Accrued liability related to WMS Gaming Inc. patent litigation.....        35,888             37,208
  Income taxes payable...............................................         6,663                  -
  Other accrued liabilities..........................................         2,699              3,078
                                                                          ---------          ---------  
     Total current liabilities.......................................        56,725             51,079


Long-term debt.......................................................             -             57,500
Deferred income taxes................................................           587                629
Other noncurrent liabilities.........................................         1,575              1,707

Stockholders' equity:

     Preferred stock (5,000,000 shares authorized, none issued)......             -                  -
     Common stock (26,793,419 and 24,270,166 shares issued)..........        13,397             12,135
     Additional paid-in capital......................................       140,501             84,673
     Retained earnings...............................................       129,831            112,098
                                                                          ---------          ---------
                                                                            283,729            208,906
     Treasury stock, at cost (52,312 shares).........................          (148)              (148)
     Unrealized loss on noncurrent marketable equity securities......        (7,040)           (12,758)
                                                                          ---------          ---------
       Total stockholders' equity....................................       276,541            196,000
                                                                          ---------          ---------
                                                                          $ 335,428          $ 306,915
                                                                          =========          =========


See notes to condensed consolidated financial statements.

</TABLE> 
                                       4


<PAGE>




                              WMS INDUSTRIES INC.
                                  ----------
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (Thousands of dollars)
                                  (Unaudited)

<TABLE>
<CAPTION>

                                                                                 Six months ended
                                                                                    December 31,
                                                                             --------------------------
                                                                                1997           1996
                                                                             -----------    -----------

<S>                                                                         <C>            <C>
Operating activities:
Net income..................................................................   $ 17,733       $ 25,038
Adjustments to reconcile net income to net cash used by operating activities:
     Income from discontinued operations - video games segment..............    (22,224)       (19,486)
     Income from discontinued operations - gain on initial public offering
      of subsidiary - video games segment...................................        -          (47,771)
     Depreciation and amortization..........................................      2,960          2,927
     Receivables provision..................................................        304             62
     Provisions related to gaming patent litigation.........................        -           60,875
     Deferred income taxes..................................................        502        (20,944)
     Tax benefit from exercise of common stock options......................        102             94
     Decrease resulting from changes in operating assets and liabilities....     (6,719)       (16,301)
                                                                             ----------     ----------
Net cash used by operating activities.......................................     (7,342)       (15,506)

Investing activities:
Purchase of property, plant and equipment...................................     (2,191)        (1,729)
Net change in short-term investments........................................      9,450        (22,891)
                                                                             ----------     ----------
Net cash provided (used) by investing activities............................      7,259        (24,620)

Financing activities:
Cash received on exercise of common stock options...........................        654            984
Redemption of long-term debt................................................       (178)           -
                                                                             ----------    -----------
Net cash provided by financing activities...................................        476            984

Discontinued Operations:
Net transfer from discontinued operations - video games segment.............        -           50,000
Net transfer to discontinued operations and payment of transaction
   costs - hotel and casino segments........................................        -           (7,499)
                                                                             ----------    -----------
Net cash provided by discontinued operations................................        -           42,501

                                                                             ----------    -----------
Increase in cash and cash equivalents.......................................        393          3,359
Cash and cash equivalents at beginning of period............................      1,853         24,351
                                                                             ----------    -----------
Cash and cash equivalents at end of period..................................   $  2,246       $ 27,710
                                                                             ==========    ===========

See notes to condensed consolidated financial statements.

</TABLE>


                                       5

<PAGE>
 
                              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 except for the
     gain on Midway Games Inc. public offering and the provisions related to WMS
     Gaming Inc. patent litigation described in Note 6) considered necessary for
     a fair presentation have been included. Due to the seasonality of the
     Company's businesses, operating results for the six months ended December
     31, 1997 are not necessarily indicative of the results that may be expected
     for the fiscal year ending June 30, 1998. 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, 1997.


2.  Discontinued Operations
    -----------------------

     On August 11, 1997 the Company announced a planned spin-off of its 86.8%
     interest in Midway Games Inc. Accordingly, the financial position, results
     of operations and cash flows of this business segment has been reported as
     discontinued operations in the condensed consolidated financial statements.
     The cash flow statement for the six months ended December 31, 1996 also
     reflects transactions with the Puerto Rico based hotel, casino and hotel
     management business prior to its April 22, 1997 spin-off and costs related
     to this spin-off.

     Completion of the Midway Games Inc. spin-off, among other things, is
     subject to the receipt of a ruling from the Internal Revenue Service that
     the transaction will be tax free to the Company and its stockholders. The
     Company anticipates that the spin-off will be completed by early 1998.


3.  Convertible Subordinated Debentures
    -----------------------------------

     During the six months ended December 31, 1997, as a result of a call for
     redemption on September 22, 1997 of 33% of the $57,500,000 in outstanding
     debentures and a call for redemption on October 29, 1997 of the remaining
     outstanding debentures, debentures with an aggregate principal amount of
     $57,322,000 were converted into 2,488,855 common shares and $178,000 of
     such debentures were redeemed.

 
4.  Common Stock Options
    --------------------

     On September 30, 1997, the Company entered into an agreement with each of
     the holders of all the outstanding common stock options that are
     exercisable into 4,089,011 shares of the Company's common stock. Each
     option holder agreed not to exercise their stock option through the date of
     the Midway Games Inc. spin-off (see Note 2) and the Company agreed to
     acquire from the holders, shortly before the spin-off, either such options
     or a portion of such options which represent the value of the Midway Games
     Inc. common stock inherent in each share of WMS common stock. The Company
     has agreed to use up to $30 million in cash and up to 2 million shares of
     pre spin-off WMS common stock for such purpose. Under the terms of the
     agreement the exact terms and amount of the purchase price will not be
     known until shortly before the spin-off.

                                       6
<PAGE>
 
5.  Earnings Per Share
    ------------------

     For the quarter ended December 31, 1997, the Company adopted SFAS No. 128,
     "Earnings per Share," which was effective December 15, 1997. Dilutive
     securities including common stock options and convertible subordinated
     debentures, which were redeemed during the six months ended December 31,
     1997 (see Note 3), had no impact on current or prior period earnings per
     share. In accordance with SFAS No. 128, the incremental shares from
     dilutive securities were not included in the denominator of the earnings
     per share calculation since there was a loss from continuing operations in
     the periods.

     The quarter and six months ended December 31, 1996 loss from continuing
     operations included after-tax provisions related to WMS Gaming Inc. patent
     litigation of $37,361,000, $1.54 per share. Net earnings from discontinued
     operations of the video games segment for the quarter and six months ended
     December 31, 1997 was $0.60 per share and $0.88 per share, respectively.
     Net earnings from discontinued operations of the video games segment for
     the quarter and six months ended December 31, 1996 was $2.53 per share and
     $2.79 per share, respectively, and included an after tax gain of
     $47,771,000, $1.98 per share, on Midway Games Inc. initial public offering
     completed on October 29, 1996.


6.  Litigation
    ----------

     See Item 1 of Part II for the status of International Game Technology
     litigation.

                                       7
<PAGE>
 
                              WMS INDUSTRIES INC.
                                _______________

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

The following discussion contains certain forward looking statements that
involve risks and uncertainties including reference to statements relating to
the outcome and effects of litigation. The Company's actual results could differ
materially from those anticipated in the forward looking statements as a result
of certain risks including those described in the Company's 1997 annual report
on Form 10-K and other documents filed with the Securities and Exchange
Commission.

Financial Condition
-------------------

Cash flows from operating, investing and financing activities before
discontinued operations during the six months ended December 31, 1997 resulted
in net cash provided of $393,000 as compared with net cash used of $39,142,000
during the six months ended December 31, 1996. See condensed consolidated
statements of cash flows on page 5.

Cash used by operating activities before changes in operating assets and
liabilities was $623,000 for the six months ended December 31, 1997 as compared
with cash provided of $795,000 for the six months ended December 31, 1996.

The changes in operating assets and liabilities, as shown in the consolidated
statements of cash flows, resulted in $6,719,000 of cash outflow during the six
months ended December 31, 1997 compared with a cash outflow of $16,301,000
during the six months ended December 31, 1996. Cash outflow in the six months
ended December 31, 1997 was primarily due to an increase in inventories and
receivables from their comparable balances at June 30, 1997, offset in part by
an increase in current taxes payable. The cash outflow for the six months ended
December 31, 1996 was primarily due to increased inventories and an increased
receivable from Midway Games Inc. offset in part by a decrease in receivables.

Cash provided by investing activities was $7,259,000 for the six months ended
December 31, 1997 compared with cash used of $24,620,000 for the six months
ended December 31, 1996. During the six months ended December 31, 1997 cash of
$9,450,000 was provided from the sale of short-term investments while during the
six months ended December 31, 1996 cash of $22,891,000 was utilized for the
purchase of short-term invesments. Cash used for the purchase of property, plant
and equipment during the six months ended December 31, 1997 was $2,191,000
compared with $1,729,000 for the six months ended December 31, 1996.

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
future operating losses, if any, and the Company's other presently anticipated
needs, including the payments to common stock option holders described in Note
4.

                                       8
<PAGE>
 
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    Six months ended
                                                                    December 31,         December 31,
                                                                --------------------  -------------------
                                                                  1997       1996       1997      1996
                                                                ---------  ---------  --------  ---------
<S>                                                             <C>        <C>        <C>       <C>
  Revenues
   Pinball and novelty........................................   $12,556   $ 11,270   $24,357   $ 19,181
   Gaming.....................................................    10,841      7,353    19,075     14,458
                                                                 -------   --------   -------   --------
     Total revenues...........................................   $23,397   $ 18,623   $43,432   $ 33,639
                                                                 =======   ========   =======   ========
  Gross Profit
   Pinball and novelty........................................   $ 2,485   $  2,361   $ 5,445   $  3,229
   Gaming.....................................................     3,282      1,766     5,672      3,863
                                                                 -------   --------   -------   --------
     Total gross profit.......................................   $ 5,767   $  4,127   $11,117   $  7,092
                                                                 =======   ========   =======   ========
  Operating (loss)
   Pinball and novelty........................................   $  (385)  $   (539)  $  (770)  $ (2,574)
   Gaming.....................................................    (3,125)    (3,048)   (7,344)    (5,148)
   Provisions related to WMS Gaming Inc. patent litigation....         0    (61,925)        0    (61,925)
   Unallocated general corporate expenses.....................      (354)      (499)     (719)      (918)
                                                                 -------   --------   -------   --------
     Total operating income (loss)............................    (3,864)   (66,011)   (8,833)   (70,565)
 
  Interest and other income...................................       920      1,144     1,509      2,626
  Interest expense............................................       522       (818)       81     (1,790)
                                                                 -------   --------   -------   --------
 
  Income from continuing operations before income tax credit..   $(2,422)  $(65,685)  $(7,243)  $(69,729)
                                                                 =======   ========   =======   ========
 
</TABLE>

Three Months Ended December 31, 1997 Compared With
Three months Ended December 31, 1996

Consolidated revenues increased to $23,397,000 in the fiscal 1998 second quarter
ended December 31, 1997 from $18,623,000 in the fiscal 1997 second quarter ended
December 31, 1996. Gaming revenues increased $3,488,000 from the prior year. The
majority of the December 31, 1997 quarter gaming revenues of $7,105,000 were
from the sale of multigame video gaming devices and a recently introduced model
of reel type slot machine while prior year quarter revenues of $3,031,000 were
from the sale of certain reel type slot machines that the Company is currently
prohibited from selling due to court decisions which are now on appeal. Pinball
and novelty revenues increased over the prior year second quarter by $1,286,000
primarily due to increased units sold.

Consolidated gross profit increased to $5,767,000 in the quarter ended December
31, 1997 from $4,127,000 in the quarter ended December 31, 1996 due primarily to
increased revenues.

Consolidated operating loss decreased to $3,864,000 in the December 31, 1997
quarter from $4,086,000 in the prior year quarter, excluding the provision of
$61,925,000 relating to patent litigation recorded in the prior year second
quarter. Pinball and novelty segment operating loss decreased by $154,000
because of the higher gross profit on sales. Excluding the $61,925,000 provision
relating to patent litigation, gaming segment operating loss increased by
$77,000, notwithstanding the $1,516,000 increase in gross profit, because of
increased research and development expense incurred for further development of
new gaming products as well as higher selling, administrative and service
expenses required for the anticipated growth in the business.

The decrease in interest and other income and expense - net was primarily due to
the lower level of cash, cash equivalents and short-term investments in the
current quarter as compared to the prior year quarter. Interest expense was a
$522,000 credit in the December 31, 1997 quarter compared to a $818,000 expense
in the prior year period because the conversion of the debentures (see Note 3)
created a reversal of interest accrued in the prior quarter.

                                       9
<PAGE>
 
Loss from continuing operations was $1,502,000, $0.06 per share, in the quarter
ended December 31, 1997 compared with a loss from continuing operations of
$39,712,000, $1.64 per share, in the quarter ended December 31, 1996. The
December 31, 1996 loss from continuing operations included an after-tax charge
related to gaming patent litigation of $37,361,000, $1.54 per share. Excluding
the charge in the prior year quarter for patent litigation, the current quarter
loss from continuing operations decreased by $849,000, $0.04 per share,
primarily due to the adjustment to interest expense.

Six months Ended December 31, 1997 Compared With
Six months Ended December 31, 1996

Consolidated revenues increased to $43,432,000 in the six months ended December
31, 1997 from $33,639,000 in the six months ended December 31, 1996. Gaming
revenues increased $4,617,000 from the prior year. The majority of gaming
revenues of $10,018,000 for the six months ended December 31, 1997 were from the
sale of multigame video gaming devices and a recently introduced model of reel
type slot machine while prior year six months revenues of $5,780,000 were from
the sale of certain reel type slot machines that the Company is currently
prohibited from selling due to court decisions which are now on appeal. Pinball
and novelty revenues increased by $5,176,000 as compared to the prior year six
months primarily due to increased units sold.

Consolidated gross profit increased to $11,117,000 in the six months ended
December 31, 1997 from $7,092,000 in the six months ended December 31, 1996 due
primarily to increased revenues.

Consolidated operating loss increased to $8,833,000 in the six months ended
December 31, 1997 from an operating loss $8,640,000 in the six months ended
December 31, 1996, excluding the provision of $61,925,000 relating to patent
litigation recorded in the prior year six months. Pinball and novelty segment
operating loss decreased by $1,804,000 because of the higher gross profit on
sales. Excluding the $61,925,000 provision relating to patent litigation, gaming
segment operating loss increased by $2,196,000, notwithstanding the $1,809,000
increase in gross profit, because of increased research and development expense
incurred for further development of new gaming products as well as higher
selling, administrative and service expenses required for the anticipated growth
in the business.

The decrease in interest and other income and expense - net was primarily due to
the lower level of interest earned on temporary investments in the current six
month period as compared to the level of interest earned on temporary
investments and the dividend note receivable in the six months ended December
31, 1996 as well as the December 31, 1997 six months includes certain costs
related to the convertible debentures redemption. Interest expense decreased by
$1,871,000 in the six months ended December 31, 1997 as compared to the prior
year six months primarily because of the conversion of the debentures - see Note
3.

Loss from continuing operations was $4,491,000, $0.18 per share, in the six
months ended December 31, 1997 compared with a loss from continuing operations
of $42,219,000, $1.75 per share, in the six months ended December 31, 1996. The
December 31, 1996 loss from continuing operations included an after-tax charge
related to gaming patent litigation of $37,361,000, $1.54 per share. Excluding
the charge in the prior year six months for patent litigation, the current year
loss from continuing operations decreased by $367,000, $0.02 per share,
primarily because of the change in interest income and expense noted above.

                                      10
<PAGE>
 
                                    PART II
                               OTHER INFORMATION



Item 1.   Legal Proceedings
---------------------------

Reference is made to 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, 1997 ("1997 10-K"). Capitalized terms used and not otherwise
defined herein shall have the same meanings as ascribed to such terms in the
1997 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 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 "Model 401 Action"). 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. This motion has been fully briefed and the
parties await the Trial Court's ruling.


Item 6.(a) Exhibits
-------------------

Exhibit 27 - Financial Data Schedule

                                      11
<PAGE>
 
                              WMS INDUSTRIES INC.
                                 ____________
                                        
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 duly authorized.

                                               WMS INDUSTRIES INC.
                                               -------------------
                                               (Registrant)



Dated:  February 10, 1998                      By:  /S/ Harold H. Bach, Jr.
                                               ----------------------------
                                               Harold H. Bach, Jr.
                                               Vice President-Finance
                                               Principal Financial and
                                               Chief Accounting Officer


                                      12