----

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**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**WASHINGTON,      D.C. 20549**

**FORM      10-Q**

| **(Mark                One)** |
|-------------------------------|
| **R**                         | **QUARTERLY                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934** **FOR                THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2007** |
|                          |   |
|                          | **OR** |
|                          |   |
| **£**                    | **TRANSITION                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934** **FOR                THE TRANSITION PERIOD FROM                _______________TO______________________** |

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**WMS      INDU****STRIES      INC.**

*                              (Exact name of registrant as specified in its Charter)*

----

| **Delaware**                                                                                             | **36-2814522**                                                           |
|----------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------|
|  *(State                  or other jurisdiction of incorporation or                  organization)* | *(I.R.S.                  Employer Identification                  No.)* |

**800      South Northpoint Blvd.**

**Waukegan,      IL 60085**

*(Address      of Principal Executive Offices)*

**(847)      785-3000**

*(Registrant's      telephone number, including area code)*

----

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**WMS      INDUSTRIES INC.**

**INDEX**

|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   **Page** |
|-----------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------|
| **Part                I.**  | **Financial                Information                                                                                                                                     **                                                  |                 |
| Item                1.      | Financial                Statements                                                                                                                                                                                            | 3                    |
|                        | Condensed                Consolidated Statements of Income (unaudited) for the                Three Months Ended September 30, 2007 and 2006                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 3                    |
|                        | Condensed                Consolidated Balance Sheets as of                September 30, 2007 (unaudited) and June 30, 2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 4                    |
|                        | Condensed                Consolidated Statements of Cash Flows                (unaudited) for the Three Months Ended September 30, 2007 and                2006                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 5                    |
|                        | Notes                to Condensed Consolidated Financial Statements                (unaudited)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 6                    |
| Item                2.      | Management’s                Discussion and Analysis of Financial Condition                and Results of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 14                   |
| Item                3.      | Quantitative                and Qualitative Disclosures About Market                Risk                                                                                                                                       | 24                   |
| Item                4.      | Controls                and Procedures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 25                   |
| **Part                II.** | **Other                Information                                                                                                                                     **                                                      |                 |
| Item                1.      | Legal                Proceedings                                                                                                                                                                                               | 25                   |
| Item                1A.     | Risk                Factors                                                                                                                                                                                                    | 25                   |
| Item                2.      | Unregistered                Sales of Equity Securities and Use of                Proceeds                                                                                                                                      | 26                   |
| Item                3.      | Defaults                Upon Senior                Securities                                                                                                                                                                  | 26                   |
| Item                4.      | Submission                of Matters to a Vote of Security                Holders                                                                                                                                              | 26                   |
| Item                5.      | Other                Information                                                                                                                                                                                               | 26                   |
| Item                6.      | Exhibits                                                                                                                                                                                                                       | 27                   |
| Signatures                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 28                   |

**PART      I.  FINANCIAL INFORMATION**

**ITEM      1.  FINANCIAL STATEMENTS**

**WMS      INDUSTRIES INC.**

**CONDENSED      CONSOLIDATED STATEMENTS OF INCOME**

**For      the Three Months Ended September 30, 2007 and 2006**

**(in      millions of U.S. dollars and millions of shares, except per share      amounts)**

**(Unaudited)**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | **2007** |   |   | **2006** |    |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|--------|--------|----------|---------|
| **REVENUES:**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |     |   |   |     |    |
| Product                sales                                                                                                                                                                                                |   | $        | 80.9   |   |     | $       | 68.6 |   |
| Gaming                operations                                                                                                                                                                                            |   |     | 51.6   |   |     |    | 42.0 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |     |   |   |     |    |   |   |
| **         Total                revenues                                                                                                           **                          |   |     | 132.5  |   |     |    | 110.6 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |     |   |   |     |    |   |   |
| **COSTS                AND EXPENSES:**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |     |   |   |     |    |   |   |
| Cost                of product                sales(1)                                                                                                                                                                      |   |     | 42.3   |   |     |    | 39.4 |   |
| Cost                of gaming                operations(1)                                                                                                                                                                  |   |     | 10.6   |   |     |    | 8.6 |   |
| Research                and                development                                                                                                                                                                      |   |     | 16.8   |   |     |    | 12.5 |   |
| Selling                and                administrative                                                                                                                                                                    |   |     | 27.8   |   |     |    | 23.6 |   |
| Depreciation(1)                                                                                                                                                                                                             |   |     | 18.2   |   |     |    | 15.2 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |     |   |   |     |    |   |   |
| **         Total                costs and                expenses                                                                                                           ** |   |     | 115.7  |   |     |    | 99.3 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |     |   |   |     |    |   |   |
| **OPERATING                INCOME                                                                                                                **                                                |   |     | 16.8   |   |     |    | 11.3 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |     |   |   |     |    |   |   |
| Interest                expense                                                                                                                                                                    |   |     | (1.0   | )      |     |    | (1.7 | ) |
| Interest                and other income,                net                                                                                                                                       |   |     | 1.1    |   |     |    | 0.9 |   |
| Income                before income                taxes                                                                                                                                           |   |     | 16.9   |   |     |    | 10.5 |   |
| Provision                for income                taxes                                                                                                                                           |   |     | 5.8    |   |     |    | 3.4 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |     |   |   |     |    |   |   |
| **NET                INCOME                                                                                                                **                                                      |   | $        | 11.1   |   |     | $       | 7.1 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |     |   |   |     |    |   |   |
| **Earnings                per share:**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |     |   |   |     |    |   |   |
| Basic                                                                                                                                                                                                                       |   | $        | 0.22   |   |     |  $ | 0.15 |   |
| Diluted                                                                                                                                                                                                                     |   | $        | 0.19   |   |     |  $ | 0.13 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |     |   |   |     |    |   |   |
| **Weighted-average                common shares:**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |     |   |   |     |    |   |   |
| Basic                common stock                outstanding                                                                                                                                                                |   |     | 49.8   |   |     |    | 47.6 |   |
| Diluted                common stock and common stock                equivalents                                                                                                                                             |   |     | 60.8   |   |     |    | 57.5 |   |
|  __________                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |     |   |   |     |    |   |   |
| (1)    Cost                of                product sales and cost of gaming operations exclude the following                amounts                of depreciation, which                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |
|                       are included separately in the depreciation line item:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |     |   |   |     |    |   |   |
| Cost                of product                sales                                                                                                                                                                                                                                                         |   | $        | 0.8    |   |     | $       | 0.6 |   |
| Cost                of gaming                operations                                                                                                                                                                                                                                                     |   | $        | 15.4   |   |     | $       | 12.7 |   |

**WMS      INDUSTRIES INC.**

**CONDENSED      CONSOLIDATED BALANCE      SHEETS**

**September      30, 2007 and June 30, 2007**

**(in      millions of U.S. dollars and millions of shares)**

|                                                                                                                                               |   | **September                30,** |    |   | **June                30,** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|---------|--------|-----------------------------|--------|
|                                                                                                                                               |   | **2007**                         |    |   | **2007**                    |   |
| **ASSETS**                                                                                                                                         |   | (unaudited)                      |    |   |                        |   |
| **CURRENT                ASSETS**:                                                                                                                 |   |                             |    |   |                        |   |
|   Cash                and cash equivalents                                                                                               |   | $                                | 61.0    |   |                        | $      | 37.2 |   |
|   Restricted                cash                                                                                                         |   |                             | 18.7    |   |                        |   | 16.0 |   |
| **Total                cash, cash equivalents, and restricted cash**                                                                               |   |                             | 79.7    |   |                        |   | 53.2 |   |
|    Accounts                receivable, net of allowances of $2.3 and $2.5,                respectively                              |   |                             | 93.9    |   |                        |   | 114.5 |   |
|   Notes                receivable, current portion                                                                                       |   |                             | 58.8    |   |                        |   | 59.4 |   |
|   Inventories                                                                                                                            |   |                             | 81.1    |   |                        |   | 79.3 |   |
|   Deferred                income tax assets                                                                                              |   |                             | 9.5     |   |                        |   | 9.4 |   |
|   Other                current assets                                                                                                    |   |                             | 28.9    |   |                        |   | 26.4 |   |
|        **Total                current assets**                                                                  |   |                             | 351.9   |   |                        |   | 342.2 |   |
|                                                                                                                                               |   |                             |    |   |                        |   |   |   |
| **NON-CURRENT                ASSETS:**                                                                                                             |   |                             |    |   |                        |   |   |   |
|  Gaming                operations                equipment, net of accumulated depreciation of $139.8 and $129.3,                respectively |   |                             | 88.9    |   |                        |   | 90.0 |   |
|  Property,                plant and                equipment, net of accumulated depreciation of $61.7 and $57.9,                respectively |   |                             | 99.2    |   |                        |   | 91.9 |   |
|  Intangible                assets                                                                                                             |   |                             | 102.4   |   |                        |   | 97.0 |   |
|  Deferred                income tax assets                                                                                                    |   |                             | 21.8    |   |                        |   | 19.9 |   |
|  Other                assets                                                                                                                  |   |                             | 13.8    |   |                        |   | 14.7 |   |
| **Total                non-current assets**                                                                                                        |   |                             | 326.1   |   |                        |   | 313.5 |   |
| **TOTAL                ASSETS**                                                                                                                    |   | $                                | 678.0   |   |                        | $      | 655.7 |   |
|  **LIABILITIES                AND STOCKHOLDERS’ EQUITY**                                                                                |   |                             |    |   |                        |   |   |   |
| **CURRENT** **LIABILITIES**:                                                                                                                  |   |                             |    |   |                        |   |   |   |
|   Accounts                payable                                                                                                        |   | $                                | 40.5    |   |                        | $      | 38.8 |   |
|   Accrued                compensation and related benefits                                                                               |   |                             | 8.6     |   |                        |   | 17.5 |   |
|   Other                accrued liabilities                                                                                               |   |                             | 32.2    |   |                        |   | 30.4 |   |
|        **Total                current liabilities**                                                             |   |                             | 81.3    |   |                        |   | 86.7 |   |
|                                                                                                                                               |   |                             |    |   |                        |   |   |   |
| **NON-CURRENT** **LIABILITIES**:                                                                                                              |   |                             |    |   |                        |   |   |   |
|   Deferred                income tax liabilities.                                                                                        |   |                             | 10.3    |   |                        |   | 9.4 |   |
|   Long-term                debt                                                                                                          |   |                             | 115.0   |   |                        |   | 115.0 |   |
|   Other                non-current liabilities                                                                                           |   |                             | 12.9    |   |                        |   | 11.0 |   |
|        **Total                non-current liabilities**                                                         |   |                             | 138.2   |   |                        |   | 135.4 |   |
|                                                                                                                                               |   |                             |    |   |                        |   |   |   |
| Commitments,                contingencies and indemnifications (see Note 12)                                                                       |   |                             | — |   |                        |   | — |   |
|  **STOCKHOLDERS’                EQUITY**:                                                                                               |   |                             |    |   |                        |   |   |   |
|   Preferred                stock (5.0 shares authorized, none issued)                                                                    |   |                             | — |   |                        |   | — |   |
|   Common                stock (100.0 shares authorized, 50.6 and 50.0 shares issued,                respectively)                        |   |                             | 25.3    |   |                        |   | 25.0 |   |
|   Additional                paid-in capital                                                                                              |   |                             | 280.8   |   |                        |   | 269.1 |   |
|   Retained                earnings                                                                                                       |   |                             | 147.5   |   |                        |   | 138.2 |   |
|   Accumulated                other comprehensive income                                                                                  |   |                             | 4.9     |   |                        |   | 1.3 |   |
|        **Total                stockholders’ equity**                                                      |   |                             | 458.5   |   |                        |   | 433.6 |   |
| **TOTAL                LIABILITIES AND STOCKHOLDERS’ EQUITY**                                                                                |   | $                                | 678.0   |   |                        | $      | 655.7 |   |

**WMS      INDUSTRIES INC.**

**CONDENSED      CONSOLIDATED STATEMENTS OF CASH FLOWS**

**For      the Three Months Ended September 30, 2007 and 2006**

** (in      millions of U.S. dollars)**

**(Unaudited)**

|                                                                                                                                             |   | **2007** |    |   | **2006** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|---------|--------|----------|--------|
| **CASH                FLOWS FROM OPERATING                ACTIVITIES**                                                                           |   |     |    |   |     |   |
| Net                income                                                                                                                        |   | $        | 11.1    |   |     | $      | 7.1 |   |
| Adjustments                to reconcile net income to net cash provided by operating                activities:                             |   |     |    |   |     |   |   |   |
|   Depreciation                                                                                                                         |   |     | 18.2    |   |     |   | 15.2 |   |
|   Non-cash                expenses                                                                                                     |   |     | 7.0     |   |     |   | 6.3 |   |
|   Deferred                income taxes                                                                                                 |   |     | (1.1    | )      |     |   | (1.7 | ) |
|   Change                in operating assets and liabilities, net of acquisitions                                                       |   |     | 3.4     |   |     |   | (1.4 | ) |
| **Net                cash provided by operating activities**                                                                                     |   |     | 38.6    |   |     |   | 25.5 |   |
|                                                                                                                                             |   |     |    |   |     |   |   |   |
| **CASH                FLOWS FROM INVESTING ACTIVITIES**                                                                                          |   |     |    |   |     |   |   |   |
| Purchase                of business, net of cash acquired                                                                                        |   |     | (0.2    | )      |     |   | (20.5 | ) |
| Purchase                of property, plant and equipment                                                                                         |   |     | (10.2   | )      |     |   | (6.9 | ) |
| Additions                to gaming operations equipment                                                                                          |   |     | (14.8   | )      |     |   | (14.0 | ) |
| Investment                and advances in royalties, licensed technologies, patents, and trademarks,                net of business acquisitions |   |     | (1.4    | )      |     |   | (3.9 | ) |
| **Net                cash used in investing activities**                                                                                         |   |     | (26.6   | )      |     |   | (45.3 | ) |
|                                                                                                                                             |   |     |    |   |     |   |   |   |
| **CASH                FLOWS FROM FINANCING ACTIVITIES**                                                                                          |   |     |    |   |     |   |   |   |
| Cash                received from exercise of stock options                                                                                      |   |     | 6.3     |   |     |   | 2.2 |   |
| Tax                benefit from exercise of stock options                                                                                        |   |     | 2.5     |   |     |   | 0.2 |   |
| Proceeds                from borrowings under revolving credit facilityPurchases of treasury                stock                                |   |     | — |   |     |   | 5.0 |   |
| Repayments                of borrowings under revolving credit facility                                                                          |   |     | — |   |     |   | (5.0 | ) |
| **Net                cash provided by financing activities**                                                                                |   |     | 8.8     |   |     |   | 2.4 |   |
|                                                                                                                                             |   |     |    |   |     |   |   |   |
| **Effect                of Exchange Rates on Cash**                                                                                              |   |     | 3.0     |   |     |   | (0.6 | ) |
|                                                                                                                                             |   |     |    |   |     |   |   |   |
| **INCREASE                (DECREASE) IN CASH AND CASH EQUIVALENTS**                                                                              |   |     | 23.8    |   |     |   | (18.0 | ) |
| **CASH                AND CASH EQUIVALENTS**, beginning of period                                                                                |   |     | 37.2    |   |     |   | 39.1 |   |
| **CASH                AND CASH EQUIVALENTS,** end of period                                                                                 |   | $        | 61.0    |   |     | $      | 21.1 |   |

**WMS      INDUSTRIES INC.**

**NOTES      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(tabular      amounts in millions of U.S. dollars and millions of shares, except per share      amounts)**

**(Unaudited)**

**1.      BASIS      OF PRESENTATION AND BUSINESS OVERVIEW**

**2.      PRINCIPAL      ACCOUNTING POLICIES**

***Accounting      for Income Taxes***

**WMS      INDUSTRIES INC.**

**NOTES      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS –(Continued)**

**(tabular      amounts in millions of U.S. dollars and millions of shares, except per share      amounts)**

**(Unaudited)**

***Other      Principal Accounting Policies***

**3.      EARNINGS      PER SHARE**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |     |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | **2007** |   |   | **2006** |   |
| **Basic                earnings****per share**:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |     |   |   |   |   |
| Net                income                                                                                                                                                                              |   | $        | 11.1   |   |   | $ | 7.1 |   |
| Basic                weighted average common shares                outstanding                                                                                                                         |   |     | 49.8   |   |   |   | 47.6 |   |
| Basic                earnings per                share                                                                                                                                                 |   | $        | 0.22   |   |   | $ | 0.15 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |     |   |   |   |   |   |   |
| **Diluted                earnings per share**:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |     |   |   |   |   |   |   |
| Net                income                                                                                                                                                                              |   | $        | 11.1   |   |   | $ | 7.1 |   |
| After                tax interest expense and amortization of issuance costs on convertible                subordinated notes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |     | 0.5    |   |   |   | 0.6 |   |
| Diluted                earnings                                                                                                                                                                        |   | $        | 11.6   |   |   | $ | 7.7 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |     |   |   |   |   |   |   |
| Basic                weighted average common shares                outstanding                                                                                                                         |   |     | 49.8   |   |   |   | 47.6 |   |
| Dilutive                effect of stock                options                                                                                                                                         |   |     | 2.1    |   |   |   | 1.1 |   |
| Dilutive                effect of restricted common stock and                warrants                                                                                                                  |   |     | 0.2    |   |   |   | 0.1 |   |
| Dilutive                effect of convertible subordinated                notes                                                                                                                        |   |     | 8.7    |   |   |   | 8.7 |   |
| Dilutive                common stock and common stock                equivalents                                                                                                                       |   |     | 60.8   |   |   |   | 57.5 |   |
| Diluted                earnings per share of common stock and common stock                equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | $        | 0.19   |   |   | $ | 0.13 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |     |   |   |   |   |   |   |
| Common                stock equivalents excluded from the calculation of diluted earnings                per                share because their exercise prices would render them                anti-dilutive                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |     | 0.4    |   |   |   | 3.2 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |     |   |   |   |   |   |   |

**4.      BUSINESS      ACQUISITION**

**5.      INVENTORIES**

|                                                                  |   | **September                30,** |   |   | **June                30,** |
|-----------------------------------------------------------------------|--------|----------------------------------|--------|--------|-----------------------------|
|                                                                  |   | **2007**                         |   |   | **2007**                    |
| Raw                materials and work-in-process                      |   | $                                | 54.0   |   |                        | $ | 52.5 |   |
| Finished                goods                                         |   |                             | 27.1   |   |                        |   | 26.8 |   |
| Total                inventories                                      |   | $                                | 81.1   |   |                        | $ | 79.3 |   |
|                                                                  |   |                             |   |   |                        |   |   |   |
| Legacy                inventory balances included in the totals above |   | $                                | 5.0    |   |                        | $ | 8.5 |   |

**WMS      INDUSTRIES INC.**

**NOTES      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS –(Continued)**

**(tabular      amounts in millions of U.S. dollars and millions of shares, except per share      amounts)**

**(Unaudited)**

**6.      INTANGIBLE      ASSETS**

***Goodwill***

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|
| Goodwill                balance at June 30,                2007                                                                                                                                                          |   | $      | 17.4   |   |
| Additions:  SiP                acquisition (see Note                4)                                                                                                                                         |   |   | 4.5    |   |
| Foreign                currency translation                adjustment                                                                                                                                                    |   |   | 0.9    |   |
| Goodwill                balance at September 30,                2007                                                                                                                                                     |   | $      | 22.8   |   |

***Other      Intangible Assets***

|                                               |   | **Additions**                                                                                                                   |    |
|----------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------|---------|
| Finite                lived intangibles:           |   |                                                                                                                            |    |
| Patents                                            |   | $                                                                                                                               | 0.8     |   |
| Customer                relationships              |   |                                                                                                                            | – |   |
| Royalties                and licensed technologies |   |                                                                                                                            | 0.5     |   |
| Trademarks                                         |   |                                                                                                                            | 0.1     |   |
| Total                                              |   | $                                                                                                                               | 1.4     |   |
|                                               |   |                                                                                                                            |    |   |
| Indefinite                lived intangibles:       |   |                                                                                                                            |    |   |
| Brand                names                         |   | $                                  |    |

|                                               |   | **September                30, 2007** |   |   | **June                30, 2007**            |   |
|----------------------------------------------------|--------|---------------------------------------|--------|--------|---------------------------------------------|--------|
|                                               |   | **Cost**                              |   |   | **Accumulated                Amortization** |   |   | **Net** |   |   | **Cost** |   |   | **Accumulated                Amortization** |   |   | **Net** |   |
| Finite                lived intangible assets:     |   |                                  |   |   |                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Patents                                            |   | $                                     | 15.2   |   |                                        | $      | (1.2 | ) |   | $ | 14.0 |   |   | $ | 14.4 |   |   | $ | (0.9 | ) |   | $ | 13.5 |   |
| Customer                relationships              |   |                                  | 4.7    |   |                                        |   | (1.0 | ) |   |   | 3.7 |   |   |   | 4.4 |   |   |   | (0.7 | ) |   |   | 3.7 |   |
| Royalties                and licensed technologies |   |                                  | 100.8  |   |                                        |   | (35.3 | ) |   |   | 65.5 |   |   |   | 100.6 |   |   |   | (33.9 | ) |   |   | 66.7 |   |
| Trademarks                                         |   |                                  | 0.7    |   |                                        |   | (0.1 | ) |   |   | 0.6 |   |   |   | 0.7 |   |   |   | (0.1 | ) |   |   | 0.6 |   |
| Total                                              |   | $                                     | 121.4  |   |                                        | $      | (37.6 | ) |   | $ | 83.8 |   |   | $ | 120.1 |   |   | $ | (35.6 | ) |   | $ | 84.5 |   |
|                                               |   |                                  |   |   |                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Indefinite                lived intangible assets: |   |                                  |   |   |                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Brand                names                         |   | $                                     | 3.2    |   |                                        | $      | – |   |   | $ | 3.2 |   |   | $ | 3.0 |   |   | $ | – |   |   | $ | 3.0 |   |

**WMS      INDUSTRIES INC.**

**NOTES      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS –(Continued)**

**(tabular      amounts in millions of U.S. dollars and millions of shares, except per share      amounts)**

**(Unaudited)**

***General***

|                                                                                                                            |   | **September                30,** |   |   | **June                30,** |   |
|---------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|--------|--------|-----------------------------|--------|
|                                                                                                                            |   | **2007**                         |   |   | **2007**                    |   |
|                                                                                                                            |   |                             |   |   |                        |   |
| Goodwill                                                                                                                        |   | $                                | 22.8   |   |                        | $      | 17.4 |   |
| Finite                lived intangible assets, net                                                                              |   |                             | 83.8   |   |                        |   | 84.5 |   |
| Indefinite                lived intangible assets                                                                               |   |                             | 3.2    |   |                        |   | 3.0 |   |
| Less:  royalties                and licensed technologies, short-term included in other current                assets |   |                             | (7.4   | )      |                        |   | (7.9 | ) |
| Total                intangible assets                                                                                          |   | $                                | 102.4  |   |                        | $      | 97.0 |   |

| ** Year                ended June 30,** |   |   |   |
|----------------------------------------------|--------|--------|--------|
| 2008                                         |   | $      | 6.9    |   |
| 2009                                         |   |   | 8.8    |   |
| 2010                                         |   |   | 11.7   |   |
| 2011                                         |   |   | 10.1   |   |
| 2012                                         |   |   | 7.4    |   |

**7.      INCOME      TAXES**

*Accounting for Uncertainty in Income Taxes, an*
*I*
*nterpretation of FASB Statement No. 109, Accounting      for      Income Taxes*

**WMS      INDUSTRIES INC.**

**NOTES      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS –(Continued)**

**(tabular      amounts in millions of U.S. dollars and millions of shares, except per share      amounts)**

**(Unaudited)**

**8.      CONVERTIBLE      SUBORDINATED NOTES AND REVOLVING CREDIT FACILITY**

***Convertible      Subordinated Notes***

***Revolving      Credit Facility***

**9.      STOCKHOLDERS'      EQUITY**

***Common      Stock Repurchase Program***

***Equity      Compensation Plan***

**WMS      INDUSTRIES INC.**

**NOTES      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS –(Continued)**

**(tabular      amounts in millions of U.S. dollars and millions of shares, except per share      amounts)**

**(Unaudited)**

| Ø   | 89,911                shares of restricted stock, which restrictions will lapse evenly                over four                years. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------|

| Ø   | 251,765                stock options that vest evenly over three years and expire on September                19, 2014.  The options have a fair value of $10.91 per share                based on the Black-Scholes calculation using the following assumptions:                $30.55 exercise price; risk-free interest rate of 4.19%; expected                life of                4.5 years; expected volatility of 0.35; and 0.0% dividend                yield. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ø   | 89,911                equity-based performance units, which will vest upon achievement                of                performance goals set by the Board.  The goals are based on levels of                total revenue and earnings per share over the period July 1, 2007                through                June 30, 2010. The number of shares of stock awarded to participants                is                dependent upon the achievement of the performance goals and the extent                to                which each goal is achieved or exceeded, and can result in shares                issued                up to 200% of the targeted number of shares under each                grant.  Based on the current assessment of the performance                goals, the Company has not recorded any expense relating to such                equity-based performance units. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**10.           COMPREHENSIVE      INCOME**

|                                                        |   | **2007** |   |   | **2006** |   |
|-------------------------------------------------------------|--------|----------|--------|--------|----------|--------|
|                                                        |   |     |   |   |     |   |
| Net                income                                   |   | $        | 11.1   |   |     | $      | 7.1 |   |
| Foreign                currency translation adjustment      |   |     | 3.6    |   |     |   | (0.6 | ) |
| Total                accumulated other comprehensive income |   | $        | 14.7   |   |     | $      | 6.5 |   |

**11.           SUPPLEMENTAL      DISCLOSURE OF CASH FLOW INFORMATION**

**12.           COMMITMENTS,      CONTINGENCIES AND INDEMNIFICATIONS**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | **Minimum Commitments** |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                         |   |
| Total                royalty and license                commitments                                                                                                                    |   | $                            | 129.3  |   |
| Advances                and payments                made                                                                                                                               |   |                         | (101.8 | ) |
| Potential                future                payments                                                                                                                                |   | $                            | 27.5   |   |

**WMS      INDUSTRIES INC.**

**NOTES      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS –(Continued)**

**(tabular      amounts in millions of U.S. dollars and millions of shares, except per share      amounts)**

**(Unaudited)**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | **Minimum                Commitments** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                   |   |
| 2008                                                                                                                     |   | $                                      | 10.5   |   |
| 2009                                                                                                                     |   |                                   | 6.1    |   |
| 2010                                                                                                                     |   |                                   | 5.6    |   |
| 2011                                                                                                                     |   |                                   | 5.2    |   |
| 2012                                                                                                                     |   |                                   | 0.1    |   |
| Total                                                                                                                    |   | $                                      | 27.5   |   |

***Indemnifications***

***Self-Insurance***

**WMS      INDUSTRIES INC.**

**NOTES      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS –(Continued)**

**(tabular      amounts in millions of U.S. dollars and millions of shares, except per share      amounts)**

**(Unaudited)**

**13.           LITIGATION**

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

*The      following discussion and analysis should be read in conjunction with our      Condensed Consolidated Financial Statements and Notes thereto included      elsewhere in this Report. This discussion and analysis also      contains forward-looking statements – see “Forward Looking Statements and      Risk Factors” below.*

*As      used in this Report, the terms “we”, “us”, “our”, “the Company” and “WMS”mean WMS Industries Inc., a Delaware corporation, and its      subsidiaries. All references to years, unless otherwise noted, refer to our      fiscal year, which ends on June 30. All references to quarters, unless      otherwise noted, refer to the quarters of our fiscal year.*

*Product      names mentioned in this Report are trademarks of WMS Gaming, Inc., except for      the following licensed marks: JOHN WAYNE is a trademark of Wayne Enterprises,      L.P.;  MONOPOLY, is a trademark of Hasbro; POWERBALL is a trademark of      Multi-State Lottery Association;  PRESS YOUR LUCK is a trademark of      FremantleMedia Operations BV; THE WIZARD OF OZ is a trademark of Turner      Entertainment Co.; and TOP GUN is a trademark of Paramount Pictures      Corporation.*

**OVERVIEW**

| Ø   | Multi-line,                multi-coin video gaming machines, including                WMS *Bluebird**®* and Orion *Twinstar*™                platforms; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ø   | Mechanical                reel-spinning gaming machines; |
|--------------------|----------------------------------------------------------|

| Ø   | Video                poker machines, which are primarily offered as a casino-owned daily                fee                game, where the casino purchases the base hardware and then leases                the top                box and game for a low lease price                point; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ø   | Replacement                parts and conversion kits for our legacy, *Bluebird*,                *Twinstar* and AWP gaming machines, and *CPU-NXT**®*                upgrade kits; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ø   | Used                gaming machines that are acquired on a trade-in basis or that were                previously placed on a participation                basis; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ø   | AWP                gaming machines in certain international                markets; |
|--------------------|-------------------------------------------------------------------------------------|

| Ø   | Gaming-related                systems, including linked progressive systems and slot accounting                systems                applicable to smaller international casinos;                and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ø   | Gaming                stations in legacy, *Bluebird* and *Twinstar* cabinets in                limited cases under OEM agreements to certain third                parties. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ø   | Participation                games, which are WMS-owned gaming machines that we lease based upon                any of the following payment methods: (1) a percentage of the net                win, which is the earnings generated by casino patrons playing the                gaming machine, (2) fixed daily fees, or (3) in the case of wide-area                progressive gaming machines, a percentage of the amount wagered or a                combination of a fixed daily fee and a percentage of the                amount wagered. We have the ability to place these gaming machines on                a participation basis because of the popularity of the brand and the                superior performance of the game, which generates higher wagering                and net                win to the casinos or gaming machine operators than the gaming                machines we sell to casinos or other gaming machine                operators.  Participation games include the following                categories: |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ø   | Wide-area                progressive participation games                (“WAP”); |
|--------------------|----------------------------------------------------------------------------------------------|

| Ø   | Local-area                progressive participation games (“LAP”);                and |
|--------------------|---------------------------------------------------------------------------------------------------|

| Ø   | Stand-alone                participation games. |
|--------------------|-------------------------------------------------|

| Ø   | Casino-owned                daily fee games; |
|--------------------|----------------------------------------------|

| Ø   | Video                lottery terminals; and |
|--------------------|---------------------------------------------|

| Ø   | Licensing                revenues. |
|--------------------|------------------------------------|

***Key      Priorities***

*TOP GUN*
*Transmissive      Reels*
*™*
*MONOPOLY*
* Super Money Grab*
*MONOPOLY Big Event*
* *
* MONOPOLY Super Grand      Hotel*
*®*

*Community Gaming*
*™*
*Transmissive Reels *
*PRESS YOUR LUCK*
*Big Event*
* Community Gaming*
*THE WIZARD OF OZ*
*JOHN WAYNE*
*Transmissive Reels *
*MONOPOLY*
*      Big Event*
*PRESS YOUR LUCK*
*Big Event*
*TOP GUN*
*MONOPOLY      Super Money Grab*
*TOP GUN*
*THE WIZARD OF OZ*
*JOHN WAYNE*

*Wrap Around      Pays*

*Community      Gaming*
*Transmissive      Reels*

*CPU-NXT*

***Server-Based      Gaming***

*Community Gaming*
*CPU-NXT2*
*CPU-NXT2*
*Transmissive Reels*

*Bluebird*
*CPU-NXT2*

***Acquisition      of Systems in Progress***

**CRITICAL      ACCOUNTING POLICIES AND ESTIMATES**

*Accounting for      Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109,      Accounting for Income Taxes*

**RESULTS      OF OPERATIONS**

***Seasonality***

**Three      Months Ended September 30, 2007 Compared to Three Months Ended September 30,      2006**

|                                                                |   | **Three                Months Ended** |   |   |         |   |   | **Percent**    |   |
|---------------------------------------------------------------------|--------|---------------------------------------|--------|--------|--------------|--------|--------|----------------|--------|
|                                                                |   | **September                30,**      |   |   | **Increase** |   |   | **Increase**   |   |
|                                                                |   | **2007**                              |   |   | **2006**     |   |   | **(Decrease)** |   |   | **(Decrease)** |   |
| **Product                Sales Revenues**                           |   |                                  |   |   |         |   |   |           |   |   |   |   |
| New                unit sales                revenues               |   | $                                     | 62.8   |   |         | $      | 57.4   |           |   | $ | 5.4 |   |   |   | 9.4 | % |
| Other                product sales revenues                         |   |                                  | 18.1   |   |         |   | 11.2   |           |   |   | 6.9 |   |   |   | 61.6 |   |
| Total                product sales revenues                         |   | $                                     | 80.9   |   |         | $      | 68.6   |           |   | $ | 12.3 |   |   |   | 17.9 |   |
|                                                                |   |                                  |   |   |         |   |   |           |   |   |   |   |   |   |   |   |
| New                units sold                                       |   |                                  | 4,894  |   |         |   | 4,711  |           |   |   | 183 |   |   |   | 3.9 |   |
| Average                sales price per new unit                     |   | $                                     | 12,840 |   |         | $      | 12,186 |           |   | $ | 654 |   |   |   | 5.4 |   |
| Gross                profit on product sales revenues(1)            |   | $                                     | 38.6   |   |         | $      | 29.2   |           |   | $ | 9.4 |   |   |   | 32.2 |   |
| Gross                margin on product sales revenues(1)            |   |                                  | 47.7   | %      |         |   | 42.6   | %              |   | 510 |  bp |   |   | 12.0 |   |
|                                                                |   |                                  |   |   |         |   |   |           |   |   |   |   |   |   |   |   |
| **Gaming                Operations Revenues**                       |   |                                  |   |   |         |   |   |           |   |   |   |   |   |   |   |   |
| Participation                revenue                                |   | $                                     | 46.3   |   |         | $      | 37.7   |           |   | $ | 8.6 |   |   |   | 22.8 |   |
| Other                gaming operations revenue                      |   |                                  | 5.3    |   |         |   | 4.3    |           |   |   | 1.0 |   |   |   | 23.3 |   |
| Total                gaming operations revenues                     |   | $                                     | 51.6   |   |         | $      | 42.0   |           |   | $ | 9.6 |   |   |   | 22.9 |   |
|                                                                |   |                                  |   |   |         |   |   |           |   |   |   |   |   |   |   |   |
| WAP                games at period end                              |   |                                  | 1,651  |   |         |   | 1,766  |           |   |   | (115 | ) |   |   | (6.5 | ) |
| LAP                games at period end                              |   |                                  | 2,321  |   |         |   | 1,745  |           |   |   | 576 |   |   |   | 33.0 |   |
| Stand-alone                games at period end                      |   |                                  | 4,722  |   |         |   | 3,630  |           |   |   | 1,092 |   |   |   | 30.1 |   |
| Total                installed participation base at period end     |   |                                  | 8,694  |   |         |   | 7,141  |           |   |   | 1,553 |   |   |   | 21.7 |   |
|                                                                |   |                                  |   |   |         |   |   |           |   |   |   |   |   |   |   |   |
| Average                participation installed base                 |   |                                  | 8,351  |   |         |   | 7,000  |           |   |   | 1,351 |   |   |   | 19.3 |   |
| Average                revenue per day per participation machine    |   | $                                     | 60.28  |   |         | $      | 58.55  |           |   | $ | 1.73 |   |   |   | 3.0 |   |
|                                                                |   |                                  |   |   |         |   |   |           |   |   |   |   |   |   |   |   |
| Installed                casino-owned daily fee games at period end |   |                                  | 779    |   |         |   | 797    |           |   |   | (18 | ) |   |   | (2.3 | ) |
| Average                casino-owned daily fee games installed base  |   |                                  | 749    |   |         |   | 777    |           |   |   | (28 | ) |   |   | (3.6 | ) |
|                                                                |   |                                  |   |   |         |   |   |           |   |   |   |   |   |   |   |   |
| Gross                profit on gaming operations revenue(1)         |   | $                                     | 41.0   |   |         | $      | 33.4   |           |   | $ | 7.6 |   |   |   | 22.8 |   |
| Gross                margin on gaming operations revenue(1)         |   |                                  | 79.5   | %      |         |   | 79.5   | %              |   |   | – |   |   |   | – |   |
|                                                                |   |                                  |   |   |         |   |   |           |   |   |   |   |   |   |   |   |
| Total                revenues                                       |   | $                                     | 132.5  |   |         | $      | 110.6  |           |   | $ | 21.9 |   |   |   | 19.8 |   |
| Total                gross profit(1)                                |   | $                                     | 79.6   |   |         | $      | 62.6   |           |   | $ | 17.0 |   |   |   | 27.2 |   |
| Total                gross margin(1)                                |   |                                  | 60.1   | %      |         |   | 56.6   | %              |   | 350 |  bp |   |   | 6.2 |   |

| bp | basis                point |
|----|----------------------------|

|  (1) | As                used herein, gross profit and gross margin exclude depreciation                expense. |
|-----------|-----------------------------------------------------------------------------------------------------------|

*Revenues      and Gross Profit*

| Ø   | A                $5.4 million, or 9.4%, increase in new unit sales revenue as a result                of: |
|--------------------|----------------------------------------------------------------------------------------------------------------|

| Ø   | A                183 unit increase in new units sold.  International new units                sold increased 19% over the prior year, reflecting growth in Macau                with                our Mandarin-based games and continued growth throughout Europe,                South                Africa and South America, partially offset by a decrease of approximately                100 units in North American new units sold in the September 2007                quarter                over the September 2006 quarter due to the sluggish North American                replacement market, as well as the fact that the September 2006 quarter                had a strong contribution from Oklahoma which was a new market for                us at                the time. Sales of mechanical reel products exceeded 1,400 units,                or                approximately 29% of total new units                sold. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ø   | A                5.4% increase in the average selling price of new gaming units, principally                reflecting the benefit of a higher percentage of premium-priced products                in the overall product mix. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ø   | A                $6.9 million increase in other product sales revenues, reflecting                strong sales of conversion kits, parts and used                games.   |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ø   | We                earned revenue on more than 2,500 conversion kits in the September                2007                quarter, compared to just over 900 conversion kits in the September                2006                quarter, due to the positive response to our new video and mechanical                reel                games. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ø   | We                sold more than 1,500 used gaming machines at higher prices in the                September 2007 quarter, compared to approximately 1,100 used gaming                machines in the September 2006                quarter. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ø   | A                $9.6 million, or 22.9%, growth in total gaming operations revenues                due                primarily to: |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------|

| Ø   |  A 19.3%                increase in the average installed base of participation gaming machines,                driven by the growth in our LAP and stand-alone installed                bases.  The number of WAP units in the installed base as of                September 30, 2007 was lower than at September 30, 2006, reflecting                our                selective and gradual roll-out of  the “Sensory Immersion” and                *Transmissive Reels* platforms in fiscal 2008, compared with a more                rapid release of the *POWERBALL*® installed base in fiscal                2007.  Our controlled WAP roll-out strategy, combined with the                high earnings performance of our newer games, resulted in achieving                approximately the same level of WAP-associated revenues in fiscal                2008 on                fewer installed WAP units.  It should also be noted that the                144-unit increase in WAP gaming machines since June 30, 2007 was                an                important contributor to the revenue growth in gaming operations                in the                September 2007 quarter. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ø   | Overall                average revenues per day increased by 3.0%, principally reflecting                the success of our newer WAP products, *TOP GUN* and                *MONOPOLY* *Super Money                Grab*. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ø   | Gross                margin on product sales revenues of 47.7% for the September 2007                quarter, compared to 42.6% for the September 2006                quarter.  Gross margin for the September 2007 quarter reflects                continued process improvements resulting from the Company’s lean sigma and                strategic sourcing initiatives, greater sales of higher-margin                conversion kits and revenues from a VLT                contract. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ø   | Gross                margin on gaming operations was flat at 79.5% in the September 2007                quarter compared to the September 2006 quarter, reflecting continued                lower                relative WAP jackpot expense and the positive influence of the high                performing *TOP GUN* and *MONOPOLY Super Money Grab*                games. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Operating      Expenses*

|                                      |   | **Three                Months Ended September 30,** |   |   |                               |   |   |         |   |
|-------------------------------------------|--------|-----------------------------------------------------|--------|--------|------------------------------------|--------|--------|--------------|--------|
|                                      |   | **2007**                                            |   |   | **2006**                           |   |   | **Increase** |   |
|                                      |   | **Dollar**                                          |   |   | **As                % of Revenue** |   |   | **Dollar**   |   |   | **As                % of Revenue** |   |   | **Dollar** |   |   | **Percent** |   |
|                                      |   |                                                |   |   |                               |   |   |         |   |   |   |   |   |   |   |   |   |   |
| Research                and development   |   | $                                                   | 16.8   |   |                               |   | 12.7   | %            |   | $ | 12.5 |   |   |   | 11.3 | % |   | $ | 4.3 |   |   |   | 34.4 | % |
| Selling                and administrative |   |                                                | 27.8   |   |                               |   | 21.0   |         |   |   | 23.6 |   |   |   | 21.3 |   |   |   | 4.2 |   |   |   | 17.8 |   |
| Depreciation                              |   |                                                | 18.2   |   |                               |   | 13.7   |         |   |   | 15.2 |   |   |   | 13.7 |   |   |   | 3.0 |   |   |   | 19.7 |   |
| Total                operating expenses   |   | $                                                   | 62.8   |   |                               |   | 47.4   | %            |   | $ | 51.3 |   |   |   | 46.3 | % |   | $ | 11.5 |   |   |   | 22.4 | % |

*Income      Taxes*

*Earnings      Per Share*

**LIQUIDITY      AND CAPITAL RESOURCES**

|                                                                |   |                                     |   |   |                                |   |   | **Increase                / (Decrease)** |   |
|---------------------------------------------------------------------|--------|------------------------------------------|--------|--------|-------------------------------------|--------|--------|------------------------------------------|--------|
|                                                                |   | **September                30,****2007** |   |   | **June                30,****2007** |   |   | **Dollar**                               |   |   | **Percent** |   |
|                                                                |   |                                     |   |   |                                |   |   |                                     |   |   |   |   |
| Total                cash, cash equivalents, and restricted cash(1) |   | $                                        | 79.7   |   |                                | $      | 53.2   |                                     |   | $ | 26. 5 |   |   |   | 49.8 | % |
| Total                current assets(A)                              |   |                                     | 351.9  |   |                                |   | 342.2  |                                     |   |   | 9.7 |   |   |   | 2.8 |   |
| Total                assets                                         |   |                                     | 678.0  |   |                                |   | 655.7  |                                     |   |   | 22.3 |   |   |   | 3.4 |   |
| Total                current liabilities(B)                         |   |                                     | 81.3   |   |                                |   | 86.7   |                                     |   |   | (5.4 | ) |   |   | (6.2 | ) |
| Long-term                debt                                       |   |                                     | 115.0  |   |                                |   | 115.0  |                                     |   |  |   |   |  |   |
| Stockholders’                equity                           |   |                                     | 458.5  |   |                                |   | 433.6  |                                     |   |   | 24.9 |   |   |   | 5.7 |   |
| Net                working capital (A) – (B)                  |   |                                     | 270.6  |   |                                |   | 255.5  |                                     |   |   | 15.1 |   |   |   | 5.9 |   |

|   | (1) | Includes                restricted cash of $18.7 million and $16.0 million as of September                30,                2007 and June 30, 2007, respectively. Cash required for funding WAP                systems jackpot payments is considered restricted cash and is not                available for general corporate                purposes. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ø   | An                increase in cash and cash equivalents of $26.5 million due primarily                to                the strong revenues in the prior quarter and subsequent cash collections                in the September 2007 quarter; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ø   | A                decrease in total current receivables, net of $21.2 million to $152.7                million compared to June 30, 2007, as a result of the strong                collections during the September 2007 period;                and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ø   | A                decrease in accrued compensation and related benefits of $8.9 million                due                to the payment of fiscal 2007 cash bonuses and the timing of payments                during the September 2007 quarter. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***Convertible      Subordinated Notes***

***Revolving      Credit Facility***

***Common      Stock Repurchase Program***

***Cash      Flows Summary***

|                                                                 |   | **Three                Months Ended September 30,** |   |   |     |   |
|----------------------------------------------------------------------|--------|----------------------------------------------------------|--------|--------|----------|--------|
|                                                                 |   | **2007**                                                 |   |   | **2006** |   |   | **Change** |   |
| Net                cash provided by (used in):                       |   |                                                     |   |   |     |   |   |   |   |
| Operating                activities                                  |   | $                                                        | 38.6   |   |     | $      | 25.5 |   |   | $ | 13.1 |   |
| Investing                activities                                  |   |                                                     | (26.6  | )      |     |   | (45.3 | ) |   |   | 18.7 |   |
| Financing                activities                                  |   |                                                     | 8.8    |   |     |   | 2.4 |   |   |   | 6.4 |   |
| Effect                of exchange rates on cash and cash equivalents |   |                                                     | 3.0    |   |     |   | (0.6 | ) |   |   | 3.6 |   |
| Net                increase (decrease) in cash and cash equivalents  |   | $                                                        | 23.8   |   |     | $      | (18.0 | ) |   | $ | 41.8 |   |

*Operating      activities*

| Ø   | A                positive impact from the $4.0 million increase in net income and                a $3.0                million increase in depreciation;                and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ø   | A                positive impact from improved utilization of working capital indicated                by                a $4.8 million net decrease in changes in operating assets and                liabilities, as the September 2007 quarter decrease in accounts receivable                was only partially offset by a slight increase in total inventories                as we                head into the traditionally stronger December                quarter. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Investing      Activities*

| Ø   | The                acquisition during the September 2006 of Orion for net cash of $20.5                million, compared with $0.2 million cash used for the acquisition                of SiP                in the September 2007 quarter. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ø   | A                $3.3 million increase in the amount invested in property, plant and                equipment during the September 2007 three month period to $10.2 million,                due primarily to the expansion of our Waukegan, Illinois facility,                as well                as investments in manufacturing tools and internal and purchased                software. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ø   | A                $0.8 million increase in the amount invested in gaming operations                machines, top boxes and related equipment during the September 2007                three                month period to $14.8 million.  We expect the rate of                investment in gaming operations equipment to moderate in fiscal 2008                and                2009.   |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Financing      Activities*

| Ø   | The                receipt of $6.3 million compared to $2.2 million from the exercise                of                stock options in the September 2007 and 2006 three month                periods, respectively, along with the related tax benefit of $2.5                million and $0.2 million, respectively. The amount we receive from                the                exercise of stock options is dependent on individuals’ choices to                exercise options, which are dependent on the spread of the market                price of                our stock above the exercise price of vested                options. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| **Contractual                Obligations**                                   |   | **Total** |      |   | **Less                than****1                Year** |     |   | **1-3                Years** |           |     | **3-5                Years** |   |           | **More                than****5                Years** |   |
|------------------------------------------------------------------------------|--------|-----------|-----------|--------|-------------------------------------------------------|----------|--------|------------------------------|----------------|----------|------------------------------|--------|----------------|--------------------------------------------------------|--------|
| Operating                leases                                              |   | $         | 28.4      |   |                                                  | $        | 4.4    |                         |           | $        | 7.1                          |   |           | $                                                      | 6.1    |   |   | $ | 10.8 |   |
| Royalty                payments                                              |   |      | 27.5      |   |                                                  |     | 10.5   |                         |           |     | 11.7                         |   |           |                                                   | 5.3    |   |   |  |   |
| Non-cancelable                raw material purchase orders                   |   |      | 5.8       |   |                                                  |     | 5.8    |                         |           |  |                         |   |        |                                                   |   |  |   |
| Convertible                subordinated notes                                |   |      | 115.0     |   |                                                  |  |   |                         |        |     |                         |   | 115.0          |                                                   |   |  |   |
| Performance              Bonds                                          |   |      |  1.0 |   |                                                  | 1.0      |   |                         |   |     |                         |   |   |                                                   |   |   |   |
| Other,                including guaranteed minimums in employment agreements |   |      | 15.3      |   |                                                  |     | 13.4   |                         |           |     | 0.5                          |   |           |                                                   | 0.4    |   |   |   | 1.0 |   |
| Total                                                                        |   | $         | 193.0     |   |                                                  | $        | 35.1   |                         |           | $        | 19.3                         |   |           | $                                                      | 126.8  |   |   | $ | 11.8 |   |

*Indemnifications*

*Self-Insurance*

**FORWARD      LOOKING STATEMENTS AND RISK FACTORS**

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

*Interest      Rate Risk*

*Equity      Price Risk*

*Foreign      Currency Risk*

**ITEM      4.  CONTROLS AND PROCEDURES**

**Evaluation      of Disclosure Controls and Procedures**

**Changes      in Internal Control over Financial Reporting**

**PART      II.  OTHER INFORMATION**

**ITEM      1.  LEGAL PROCEEDINGS**

**ITEM      1A.  RISK FACTORS**

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

**Issuance      of Unregistered Securities**

**Repurchases      of Common Shares**

| Period                                                      |   | Total                Number of Shares Purchased |   |   | Average                Price Paid Per Share |   |   | Total                Number of Shares Purchased as Part of Publicly Announced Plans or                Programs                (1) |   |   | Maximum                Number (Or Approximate Dollar Value) of Shares that May Yet Be Purchased                under the Plans or Programs(1)(2) |   |
|-------------------------------------------------------------|--------|-------------------------------------------------|--------|--------|---------------------------------------------|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| July                1, 2007 – July 31, 2007           |   |                                            | --     |   |                                        |   | --     |                                                                                                                              |   |   | --                                                                                                                                               |   |   | $ | 24,970,192 |   |
| August                1, 2007 – August 31, 2007       |   |                                            | --     |   |                                        |   | --     |                                                                                                                              |   |   | --                                                                                                                                               |   |   |   | 50,000,000 |   |
| September                1, 2007 – September 30, 2007 |   |                                            | --     |   |                                        |   | --     |                                                                                                                              |   |   | --                                                                                                                                               |   |   |   | 50,000,000 |   |
|  Total                                                 |   |                                            | --     |   |                                        |   | --     |                                                                                                                              |   |   | --                                                                                                                                               |   |   | $ | 50,000,000 |   |

| (1)   | On                November 3, 2005, our Board of Directors authorized the repurchase                of up                to $20 million of our common stock over the  following twelve                months. On August 8, 2006, our Board of Directors approved an expansion                and extension of the existing share repurchase authorization. The                share repurchase authorization was increased by $15 million to a                total of $35 million and the expiration date was extended until                August 8, 2007. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | On                August 6, 2007, our Board of Directors authorized the repurchase                of up to                $50 million of our common stock over the following twenty-four months.                This authorization replaces the $35 million authorization that expired                on                August 8, 2007. Pursuant to the authorization, purchases may be made                from                time to time in the open market, through block purchases or in privately                negotiated transactions. The timing and actual number of shares                repurchased will depend on market                conditions |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**ITEM      3.  DEFAULTS UPON SENIORSECURITIES**

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

**ITEM      5.  OTHER INFORMATION**

| (a)   | None. |
|-----------------|-------|

| (b)   | None. |
|-----------------|-------|

**ITEM      6.  EXHIBITS**

|   |                                                                                                                                                                                                                                                                                                                                                                                         |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1    | Amended                and Restated Certificate of Incorporation of WMS dated February 17,                1987;                Certificate of Amendment dated January 28, 1993; and Certificate                of                Correction dated May 4, 1994, incorporated by reference to our Annual                Report on Form 10-K for the year ended June 30, 1994.                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                         |
| 3.2    | Certificate                of Amendment to the Amended and Restated Certificate of Incorporation                of                WMS, as filed with the Secretary of the State of Delaware on February                25,                1998, incorporated by reference to our Quarterly Report on Form 10-Q                for                the fiscal quarter ended December 31, 1998. |
|   |                                                                                                                                                                                                                                                                                                                                                                                         |
| 3.3    | Form                of Certificate of Designations of Series A Preferred Stock, incorporated                by reference to our Registration Statement on Form 8-A (File no.                1-8300)                filed September 25, 1998 (“the Form 8-A”).                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                         |
| 3.4    | Amended                and Restated By-Laws of WMS, as amended and restated through May                7, 2007,                incorporated by reference to WMS’ Current Report on Form 8-K filed on May                10, 2007.                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                         |
| 4.1    | Rights                Agreement dated as of September 5, 1998 between WMS and The Bank                of New                York, as Rights Agent, incorporated by reference to the Form                8-A.                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                         |
| 4.2    | Indenture                dated June 25, 2003 between WMS and BNY Midwest Trust Company, and                Form of Note incorporated by reference to WMS’ Current Report on                Form 8-K filed June 25, 2003.                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                         |
| 31     | Certifications                of the Chief Executive Officer and Chief Financial Officer pursuant                to                Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted                pursuant to Section 302 of the Sarbanes-Oxley Act of                2002.                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                         |
| 32     | Certifications                of the Chief Executive Officer and Chief Financial Officer pursuant                to 18                U.S.C. Section 1350, as adopted pursuant to Section 906 of the                Sarbanes-Oxley Act of 2002.                                                                                                                                              |

|                                                   | WMS                INDUSTRIES INC.                                                |
|--------------------------------------------------------|-----------------------------------------------------------------------------------|
|                                                   |                                                                              |
| Dated:  November 7,                2007 | By:                /s/ Scott D. Schweinfurth                                      |
|                                                   | Scott                D. Schweinfurth                                              |
|                                                   | Executive                Vice President,                                          |
|                                                   | Chief                Financial Officer and Treasurer                              |
|                                                   | (Authorized                Officer andPrincipal                Financial Officer) |
|                                                   |                                                                              |

|                                              | WMS                INDUSTRIES INC.                                                   |
|---------------------------------------------------|--------------------------------------------------------------------------------------|
|                                              |                                                                                 |
| Dated:  November                7, 2007 | By:                /s/ John P. McNicholas Jr.                                        |
|                                              | John                P. McNicholas Jr.                                                |
|                                              | Vice                President, Controller andChief                Accounting Officer |
|                                              | (Principal                Accounting Officer)                                        |
|                                              |                                                                                 |

|   |                                                                                                                                                                                                                                                                                                                                                                                         |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1    | Amended                and Restated Certificate of Incorporation of WMS dated February 17,                1987;                Certificate of Amendment dated January 28, 1993; and Certificate                of                Correction dated May 4, 1994, incorporated by reference to our Annual                Report on Form 10-K for the year ended June 30, 1994.                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                         |
| 3.2    | Certificate                of Amendment to the Amended and Restated Certificate of Incorporation                of                WMS, as filed with the Secretary of the State of Delaware on February                25,                1998, incorporated by reference to our Quarterly Report on Form 10-Q                for                the fiscal quarter ended December 31, 1998. |
|   |                                                                                                                                                                                                                                                                                                                                                                                         |
| 3.3    | Form                of Certificate of Designations of Series A Preferred Stock, incorporated                by reference to our Registration Statement on Form 8-A (File no.                1-8300)                filed September 25, 1998 (“the Form 8-A”).                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                         |
| 3.4    | Amended                and Restated By-Laws of WMS, as amended and restated through May                7, 2007,                incorporated by reference to WMS’ Current Report on Form 8-K filed on May                10, 2007.                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                         |
| 4.1    | Rights                Agreement dated as of September 5, 1998 between WMS and The Bank                of New                York, as Rights Agent, incorporated by reference to the Form                8-A.                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                         |
| 4.2    | Indenture                dated June 25, 2003 between WMS and BNY Midwest Trust Company, and                Form of Note incorporated by reference to WMS’ Current Report on                Form 8-K filed June 25, 2003.                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                         |
| 31     | Certifications                of the Chief Executive Officer and Chief Financial Officer pursuant                to                Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted                pursuant to Section 302 of the Sarbanes-Oxley Act of                2002.                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                         |
| 32     | Certifications                of the Chief Executive Officer and Chief Financial Officer pursuant                to 18                U.S.C. Section 1350, as adopted pursuant to Section 906 of the                Sarbanes-Oxley Act of 2002.                                                                                                                                              |