<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   ----------

                                    FORM 10-Q

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

                  For the quarterly period ended March 31, 2002


                         Commission file number: 1-8300


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

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


                 800 South Northpoint Blvd., Waukegan, IL 60085
                 ----------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)

       Registrant's telephone number, including area code: (847) 785-3000





Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                           YES     X        NO
                               ---------        ----------

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 32,045,607 shares of common
stock, $.50 par value, were outstanding at May 10, 2002, excluding 280,012
shares held as treasury shares.



<PAGE>
                               WMS INDUSTRIES INC.

                                      INDEX

<TABLE>
<CAPTION>
                                                                                         Page
                                                                                        Number
<S>                                                                                     <C>
PART I. FINANCIAL INFORMATION:

    ITEM 1.    Financial Statements:

               Condensed Consolidated Income Statements -
               Three and nine months ended March 31, 2002 and 2001..................       2

               Condensed Consolidated Balance Sheets -
               March 31, 2002 and June 30, 2001.....................................       3

               Condensed Consolidated Statements of Cash Flows -
               Nine months ended March 31, 2002 and 2001............................       5

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


    ITEM 2.    Management's Discussion and Analysis of Financial Condition
               and Results of Operations............................................       8

    ITEM 3.    Quantitative and Qualitative Disclosures About Market Risk...........      15

PART II.  OTHER INFORMATION:

    ITEM 4.    Submission of Matters to a Vote of Security Holders..................      15

    ITEM 5.    Other Information....................................................      15

    ITEM 6.    Exhibits and Reports on Form 8-K.....................................      15

SIGNATURES     .....................................................................      16
</TABLE>



<PAGE>
                          PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                               WMS INDUSTRIES INC.
                    CONDENSED CONSOLIDATED INCOME STATEMENTS
                      (Thousands, except per share amounts)
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                               Three Months Ended            Nine Months Ended
                                                                    March 31,                     March 31,
                                                             -----------------------      ----------------------
                                                               2002           2001          2002          2001
                                                             --------       --------      --------      --------
<S>                                                          <C>            <C>           <C>           <C>
Revenues
    Machine sales                                            $ 12,867       $ 47,889      $ 59,208      $133,761
    Participation and lease                                    23,223         22,859        72,275        64,237
                                                             --------       --------      --------      --------
      Total revenues                                           36,090         70,748       131,483       197,998
                                                             --------       --------      --------      --------

Costs and expenses
    Cost of sales                                              10,298         26,430        36,861        75,352
    Cost of participation and lease revenue                     3,827          3,322        10,857         9,153
    Research and development                                    6,669          4,652        17,880        11,484
    Selling and administrative                                  9,537         12,360        35,548        38,290
    Depreciation and amortization                               6,310          4,645        18,364        13,087
    Corporate relocation                                            -            301             -         3,374
                                                             --------       --------      --------      --------
Total costs and expenses                                       36,641         51,710       119,510       150,740
                                                             --------       --------      --------      --------
Operating income (loss)                                          (551)        19,038        11,973        47,258

Interest and other income and expense, net                        584          1,399         2,518         3,630
                                                             --------       --------      --------      --------
Income from continuing operations before income taxes              33         20,437        14,491        50,888

Provision for income taxes                                          2          7,766         5,346        19,337
                                                             --------       --------      --------      --------
Income from continuing operations                                  31         12,671         9,145        31,551

Discontinued operations, net of applicable income taxes
    Pinball and cabinets segment
      Income related to discontinuance                              -              -             -         1,616
                                                             --------       --------      --------      --------

Net income                                                   $     31       $ 12,671      $  9,145      $ 33,167
                                                             ========       ========      ========      ========

Basic earnings per share of common stock:
    Income from continuing operations                        $   0.00       $   0.40      $   0.28      $   1.00
    Income from discontinued operations                             -              -             -          0.05
                                                             --------       --------      --------      --------
    Net income                                               $   0.00       $   0.40      $   0.28      $   1.05
                                                             ========       ========      ========      ========

Diluted earnings per share of common stock:
    Income from continuing operations                        $   0.00       $   0.39      $   0.28      $   0.98
    Income from discontinued operations                             -              -             -          0.05
                                                             --------       --------      --------      --------
    Net income                                               $   0.00       $   0.39      $   0.28      $   1.03
                                                             ========       ========      ========      ========

Shares used in per share calculations:
    Basic                                                      32,028         31,646        32,133        31,443
                                                             ========       ========      ========      ========
    Diluted                                                    32,463         32,275        32,849        32,050
                                                             ========       ========      ========      ========
</TABLE>


See notes to condensed consolidated financial statements.



                                       2
<PAGE>
                               WMS INDUSTRIES INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                             (Thousands of dollars)


<TABLE>
<CAPTION>
                                                             March 31,       June 30,
                                                               2002            2001
                                                             ---------       ---------
                                                            (Unaudited)
<S>                                                          <C>             <C>
ASSETS

Current Assets:
   Cash and cash equivalents                                 $  22,406       $  14,963
   Short-term investments                                       72,850          71,524
                                                             ---------       ---------
                                                                95,256          86,487
   Receivables, net of allowances of $3,169 and $3,931          22,570          46,218
   Notes receivable, current portion                            13,730          13,857
   Income tax receivable                                        10,243          10,431
   Inventories, at lower of cost (FIFO) or market:
      Raw materials and work in progress                        17,707          16,656
      Finished goods                                            18,514          16,290
                                                             ---------       ---------
                                                                36,221          32,946
   Other current assets                                          9,907           5,240
                                                             ---------       ---------
      Total current assets                                     187,927         195,179

Gaming machines on participation or lease                       74,283          64,967
Less accumulated depreciation                                  (44,048)        (32,558)
                                                             ---------       ---------
                                                                30,235          32,409

Property, plant and equipment                                   60,866          48,731
Less accumulated depreciation                                  (20,206)        (16,758)
                                                             ---------       ---------
                                                                40,660          31,973
Other assets                                                    16,938          18,921
                                                             ---------       ---------

                                                             $ 275,760       $ 278,482
                                                             =========       =========
</TABLE>



See notes to condensed consolidated financial statements.


                                       3
<PAGE>
                               WMS INDUSTRIES INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                             (Thousands of dollars)

<TABLE>
<CAPTION>
                                                                    March 31,        June 30,
                                                                      2002             2001
                                                                    ---------       ---------
                                                                   (Unaudited)
<S>                                                                 <C>             <C>
LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable                                                 $   3,135       $   6,659
   Accrued compensation and related benefits                            4,440           5,753
   Other accrued liabilities                                            8,223           9,684
                                                                    ---------       ---------
      Total current liabilities                                        15,798          22,096


Stockholders' equity:
   Preferred stock (5,000,000 shares authorized, none issued)               -               -
   Common stock (100,000,000 shares authorized, 32,325,619 and
      32,236,380 shares issued)                                        16,163          16,118
   Additional paid-in capital                                         200,697         198,276
   Retained earnings                                                   51,536          42,391
   Accumulated other comprehensive income                                (252)            (17)
                                                                    ---------       ---------
                                                                      268,144         256,768
   Unearned restricted stock (250,000 and nil shares)                  (4,750)              -
   Treasury stock, at cost (232,812 and 77,312 shares)                 (3,432)           (382)
                                                                    ---------       ---------
      Total stockholders' equity                                      259,962         256,386
                                                                    ---------       ---------

                                                                    $ 275,760       $ 278,482
                                                                    =========       =========
</TABLE>





See notes to condensed consolidated financial statements.


                                       4
<PAGE>
                               WMS INDUSTRIES INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Thousands of dollars)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                 Nine Months Ended
                                                                                      March 31,
                                                                              -----------------------
                                                                                2002           2001
                                                                              --------       --------
<S>                                                                           <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                                    $  9,145       $ 33,167
Adjustments to reconcile net income to net cash provided by
    operating activities:
    Discontinued operations:
       Income from pinball and cabinets segment                                      -         (1,616)
    Non-cash loss on corporate relocation                                            -          1,971
    Depreciation and amortization                                               18,364         13,083
    Receivables provision                                                            -            125
    Deferred income taxes                                                        1,447          1,924
    Tax benefit from exercise of stock options                                     291          3,723
    Increase (decrease) from changes in operating assets and liabilities        12,760        (30,243)
                                                                              --------       --------
Net cash provided by continuing operating activities                            42,007         22,134

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment                                      (12,135)        (4,917)
Additions to gaming machines on participation or lease                         (12,742)       (13,614)
Acquisition, net of cash acquired                                               (2,500)             -
Net increase in short-term investments                                          (1,326)       (16,921)
                                                                              --------       --------
Net cash used by investing activities                                          (28,703)       (35,452)

CASH FLOWS FROM FINANCING ACTIVITIES:
Cash received on exercise of common stock options                                1,090          3,885
Purchase of treasury stock                                                      (6,715)             -
                                                                              --------       --------
Net cash provided (used) by financing activities                                (5,625)         3,885

CASH FLOWS FROM DISCONTINUED OPERATIONS:
    Pinball and cabinets segment                                                     -            410
    Contract manufacturing segment                                                   -          1,046
                                                                              --------       --------
Net cash provided by discontinued operations                                         -          1,456

EFFECT OF EXCHANGE RATES ON CASH                                                  (236)             -
                                                                              --------       --------

Increase (decrease) in cash and cash equivalents                                 7,443         (7,977)
Cash and cash equivalents at beginning of period                                14,963         19,869
                                                                              --------       --------
Cash and cash equivalents at end of period                                    $ 22,406       $ 11,892
                                                                              ========       ========
</TABLE>


See notes to condensed consolidated financial statements.


                                       5
<PAGE>
                               WMS INDUSTRIES INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.   FINANCIAL STATEMENTS

     The accompanying unaudited condensed consolidated financial statements have
     been prepared in accordance with generally accepted accounting principles
     for interim financial information, the instructions to Form 10-Q and
     Article 10 of Regulation S-X. Accordingly, they do not include all of the
     information and footnotes required by generally accepted accounting
     principles for complete financial statements. In the opinion of management,
     all adjustments (including normal recurring accruals) considered necessary
     for a fair presentation have been included. Operating results for the
     quarter ended March 31, 2002 are not necessarily indicative of the results
     that may be expected for the fiscal year ending June 30, 2002. For further
     information, refer to the consolidated financial statements and footnotes
     thereto included in the Company's Annual Report on Form 10-K for the year
     ended June 30, 2001.


2.   BASIS OF PRESENTATION

     The condensed consolidated financial statements include the accounts of the
     Company and its wholly-owned subsidiaries. All significant intercompany
     balances, transactions and investments have been eliminated. Joint
     operating agreements for which no legal entity exists are accounted for by
     WMS recording its proportionate share of revenues and expenses from
     operating activities and all assets it owns and liabilities it incurs
     related to such agreements in its consolidated financial statements.
     Certain prior period balances have been reclassified to conform to the
     current period presentation.


3.   EARNINGS PER SHARE

     At March 31, 2002, the Company had 2,767,000 stock options outstanding. In
     addition the Company has issued 250,000 shares subject to performance and
     vesting conditions under a Restricted Stock Agreement. The diluted earnings
     per share calculation for the three months and nine months ended March 31,
     2002 and 2001 is different from the basic earnings per share calculation
     because the diluted calculation includes potential incremental shares of
     common stock outstanding from the hypothetical assumed exercise of employee
     stock options under the treasury stock method and the assumed vesting of
     the shares under the Restricted Stock Agreement. For the three months ended
     March 31, 2002 and 2001, the diluted calculation includes 435,000 and
     629,000 shares, respectively, of potentially incremental shares
     outstanding. For the nine months ended March 31, 2002 and 2001, the diluted
     calculation includes 716,000 and 607,000 shares, respectively, of
     potentially incremental shares outstanding. For the three months and nine
     months ended March 31, 2002, the diluted earnings per share calculation is
     exclusive of 1,172,000 and 400,000 option shares respectively, because the
     option exercise price was greater than the average market price of the
     common stock for the period, and therefore, the effect would be
     antidilutive. For the three months and nine months ended March 31, 2001,
     the diluted earnings per share calculation is exclusive of 152,000 option
     shares because the option exercise price was greater than the average
     market value price of the common stock for the period, and therefore, the
     effect would be antidilutive.

     The following summarizes the stock options exercised during the periods
     indicated:

<TABLE>
<CAPTION>
                                               Three Months Ended       Nine Months Ended
                                                    March 31,                March 31,
                                                   ---------                 --------
                                               2002         2001         2002          2001
                                               ----         ----         ----          ----
     <S>                                     <C>          <C>          <C>          <C>
     Stock options exercised                  57,000       41,437       89,239       819,872
     Weighted average exercise price         $ 17.10       $ 3.83      $ 12.20        $ 4.79
</TABLE>


                                       6
<PAGE>

4.   SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION (IN THOUSANDS OF DOLLARS)

                                                Nine Months Ended
                                                     March 31,
                                                     ---------
                                                 2002         2001
                                                 ----         ----
             Income taxes paid                 $ 11,171    $ 17,008


5.   COMPREHENSIVE INCOME AND LOSS

     Comprehensive income or loss consists of net income and foreign currency
     translation adjustments and totaled a loss of $0.2 million and income of
     $12.7 million for the three months ended March 31, 2002 and 2001,
     respectively, and totaled income of $8.9 million and $33.2 million for the
     nine months ended March 31, 2002 and 2001, respectively.

6.   STOCKHOLDERS' EQUITY

     Common Stock Repurchase Program
     In January 2002, the Board of Directors approved a twelve-month plan to
     repurchase up to $20 million of the Company's common stock in open market
     or privately negotiated transactions. The timing of the purchases will
     depend on market conditions. As of March 31, 2002, the repurchases under
     this plan were 405,500 shares at a cost of $6,715,000.

     Restricted Stock Grant
     Effective March 1, 2002, the Company issued a restricted stock grant of
     250,000 shares of the Company's stock from shares of common stock held in
     treasury to Louis J. Nicastro, our Chairman of the Board of Directors and a
     non-employee director. The restricted stock grant vests on June 30, 2003,
     subject to the Board of Directors satisfaction of the fulfillment of
     specified performance conditions relating to the Company's technology
     improvement plan. The market value of the restricted stock grant at the
     time of the grant is recorded as unearned restricted stock as a separate
     component of stockholders' equity and adjusted to current market value as
     of the balance sheet date. Under terms of the grant, the grantee has full
     voting rights, and the shares may also vest upon death, disability or
     change in control. At the time it becomes probable that fulfillment of the
     performance conditions will be met, the market value of the restricted
     stock at that time will be recorded as compensation expense. The technology
     improvement plan is more fully described herein under "Item 2. Management's
     Discussion and Analysis of Financial Condition and Results of Operations."

7.   RECENTLY ISSUED ACCOUNTING STANDARDS

     In June, 2001, the Financial Accounting Standards Board (FASB) issued
     Statement of Financial Accounting Standards (SFAS) No. 141, Business
     Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets. SFAS
     No. 141 requires the purchase method of accounting for all business
     combinations initiated after June 30, 2001, and eliminates the
     pooling-of-interests method. SFAS No. 142 changes the accounting for
     goodwill and indefinite lived intangible assets. These assets are no longer
     amortized but are to be reviewed annually, or more frequently if an event
     occurs or circumstances change, for indications that the asset might be
     impaired. Early application is permitted for entities with fiscal years
     beginning after March 15, 2001. We adopted SFAS No. 141 and SFAS 142 for
     our acquisition of Bigfoot Software Development and Research LLC in August
     2001.



                                       7
<PAGE>

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

As used in this quarterly report on Form 10-Q, the terms "we", "us", "our",
"Company", and "WMS" mean WMS Industries Inc., a Delaware corporation, and its
subsidiaries, unless the context indicates a different meaning, and the term
"common stock" means our common stock, $0.50 par value per share. When we refer
to "participation games" we mean arrangements by which we lease our gaming
machines to casinos or other gaming machine operators for lease payments based
upon a percentage of the net win of the gaming machines or based upon fixed
daily fees.

This report contains forward-looking statements concerning our future business
conditions and outlook based on currently available information that involves
risks and uncertainties. These statements reflect information as of the date of
this report. Our actual results could differ materially from those anticipated
in the forward-looking statements as a result of these risks and uncertainties,
including, without limitation, the financial strength of the gaming industry,
the expansion of legalized gaming into new markets and legislative and
regulatory changes in existing gaming markets, the development, introduction and
success of new games and new technologies and the ability to maintain the
scheduling of such introductions, the occurrence of software anomalies that
affect our games and our ability to correct such anomalies, our ability to
qualify for and maintain gaming licenses and approvals and other risks more
fully described under "Item 1. Business - Risk Factors" in our Annual Report on
Form 10-K for the year ended June 30, 2001. It is not possible to foresee or
identify all such factors. WMS makes no commitment to update any forward-looking
statements or to disclose any facts, events, or circumstances after the date
hereof that may affect the accuracy of any forward-looking statement.


SIGNIFICANT EVENTS AND TRENDS

Operating Software Improvement Plan
We first reported in April 2001 that certain of our gaming machines experienced
software anomalies that permitted fraudulent player manipulation. We implemented
software changes in all of our games that we believed resolved these particular
anomalies. In November 2001, we identified and reported to gaming regulators two
other software issues with the operating system of our games in Nevada and
Mississippi regarding an increased number of lockups of our gaming devices. We
believe these issues, which did not permit fraudulent player manipulation,
relate to an upgrade of the operating system software we installed at the
request of the regulators in October and November in these two jurisdictions.

As a result of these anomalies and the publicity concerning them, in the
December 2001 and March 2002 quarters we experienced delays in receiving
regulatory approvals for new games in certain jurisdictions due to regulators'
increased scrutiny of our efforts to improve our operating system software. As
we did not receive regulatory approvals when originally anticipated, we
experienced lower game sales in the December 2001 and March 2002 quarters. The
approval delays also contributed to lower participation game revenue in these
jurisdictions because we were unable to refresh our installed base of
participation games on the planned six-month schedule. Our installed base of
participation games decreased by 189 units from December 31, 2001 to March 31,
2002.

To address the software anomaly issues and to revitalize our technology
foundation, we announced in January 2002 that we are simultaneously executing
the following three-step technology improvement plan:

     -   In the near-term, we plan to rewrite critical operating code segments,
         secure third-party critiques of our design process, and perform code
         audits and other software tests. This is being done to improve the
         stability of the current operating system by introducing two upgrades
         to our current operating system.
     -   In the mid-term, we plan to develop, license or acquire a new operating
         system for our newly developed hardware platform. We also expect to
         broaden our product line to include mechanical reel spinning games,
         poker games and wide-area progressive games to be a full service gaming
         machine provider to our customers.
     -   In the long-term, we plan to develop a next generation operating
         system, which we believe would integrate leading technologies for the
         gaming industry.



                                       8
<PAGE>


In March 2002, we completed the initial programming and testing of the first of
the two upgrades to our current operating system software to address the known
causes of the software anomalies we have experienced to date. We expect to begin
receiving regulatory approvals of this operating system upgrade in the summer of
2002. This would allow us to submit for regulatory approval of both our legacy
games as well as our new games, on the upgraded operating system. We expect to
begin receiving these game approvals in the summer of 2002.

With regard to the mid-term plan, we have entered into a paid up licensing
agreement for a proprietary new gaming platform and operating system from Sierra
Design Group, which we believe meets our requirements as to design, quality,
architecture and functionality. This new, independently-developed platform and
system is intended for use in the summer 2003 release of our new gaming
machines. At the same time, we expect this platform and system to be
retrofittable into our installed base of over 50,000 games already in casinos.

For the long-term plan, we contracted with an independent specialist to develop
the design specification for our next generation operating system. We recently
received the completed design specification.

We anticipate that our introduction of new games will continue to be slow as we
devote more time to testing our software and as regulators review and evaluate
new technology. In a few jurisdictions, regulators are awaiting the next upgrade
to our operating system before they will begin approving new games. We believe
this upgrade will be ready in summer 2002. However, all other jurisdictions are
approving the new games we have submitted. We expect lower revenues from game
sales over the next twelve months as a result of fewer game approvals due to the
stringent regulatory reviews. We may have lower participation game revenue
because we may be unable to refresh our installed base of participation games in
a timely manner due to the stringent regulatory reviews.

To partially offset an anticipated reduction in revenues and an increase in
product development expenses we expect to incur to implement this technology
enhancement plan, we reduced our workforce in January 2002. We recorded a
non-recurring, pre-tax charge of $1.3 million, or $0.03 per diluted share (after
tax), in the December 2001 quarter for employee separation costs. These
personnel reductions along with other cost savings are anticipated to reduce
operating expenses by 11% on an annualized basis.

Other Recent Matters
The September 11 attack on America has caused increased security measures for
domestic airline flights and reduced overall levels of business and leisure
airline travel. The reduced travel has had an adverse effect on the casino and
gaming industry in Nevada. With the impact of the September 11 attacks
exacerbating the general economic slowdown, we believe Nevada-based casino
operators have reassessed and lowered their capital spending and leasing plans.
This reassessment may continue to impact game sales volume and participation
revenues. We experienced reduced game play on our participation games in the
December 2001 quarter, particularly in Las Vegas casinos and expect reduced game
play in the near term in Las Vegas casinos, which may negatively impact our
revenues and profitability.

We elected to delay the launch of the ninth MONOPOLY(TM) branded participation
game, Party Train(TM), from the September 2001 quarter to bring this product to
market when casino patronage levels would likely return to more normal levels in
Nevada. We launched the MONOPOLY Party Train game in Nevada in October 2001 and
in most other gaming jurisdictions later in the December 2001 quarter. We expect
to see an increase in the MONOPOLY series installed base pending receipt of
regulatory approvals in the remaining jurisdictions following the upgrade of our
operating system. The next version in this series, Hot Properties(TM), is
scheduled for launch in the September 2002 quarter.

We also delayed the launch of the HOLLYWOOD SQUARES(TM) themed participation
games, for the same reason, introducing it in January 2002 at four Harrah's
Entertainment, Inc. properties. We received additional regulatory approvals to
introduce the product at additional Harrah's properties in the March 2002
quarter with the remaining regulatory approvals anticipated following
implementation of the upgrade to our current operating system. Harrah's has a
limited exclusivity period for the HOLLYWOOD SQUARES participation games in all
jurisdictions in which Harrah's operates. We expect to install this game at
other casinos during the June and September 2002 quarters.

In April 2002, we introduced SURVIVOR(TM) as a wide-area progressive game under
our joint operating agreement with International Game Technology (IGT), which
uses IGT's MegaJackpots(TM) wide area progressive operating system and gaming
platform. These installations began in California and are expected to begin in
certain other states


                                       9
<PAGE>

before June 30, 2002. Approvals in all major North American gaming jurisdictions
are expected to be received by September 2002.

Effective March 1, 2002, we issued a restricted stock grant of 250,000 shares of
our stock from shares of common stock held in treasury to Louis J. Nicastro, our
Chairman of the Board of Directors and a non-employee director. The restricted
stock vests on June 30, 2003, subject to the Board of Directors satisfaction of
the fulfillment of specified performance conditions relating to our technology
improvement plan. The market value of the restricted stock grant at the time of
the grant is recorded as unearned restricted stock as a separate component of
stockholders' equity and adjusted to current market value as of the balance
sheet date. Under terms of the grant, the grantee has full voting rights, and
the shares may also vest upon death, disability or change in control. At the
time it becomes probable that the fulfillment of the performance vesting
conditions will be met, the market value of the restricted stock at that time
will be recorded as compensation expense.


CRITICAL ACCOUNTING POLICIES

We value inventory based on estimates of potentially excess and obsolete
inventory after considering forecasted demand and forecasted average selling
prices. However, forecasts are subject to revisions, cancellations and
rescheduling. In addition, demand for parts inventory is subject to technical
obsolescence. Inventory on hand in excess of forecasted demand would be written
down to market value. Actual demand may differ from anticipated demand, and such
differences may have a material effect on the financial statements.

Our production overhead expenses are capitalized in finished goods inventory
based on our estimate of total games to be produced for the year. If the total
number of games produced is significantly less, we would expense those costs
associated with excess capacity, which would lower the gross margins associated
with game sales.

We depreciate our participation games and top box conversions for participation
games over a two-year useful life with a small residual value. A material impact
could occur if the actual useful life of the participation games or top box
conversions is less than what was used in estimating depreciation expense, or if
actual salvage value is less than the anticipated salvage value.

We license intellectual property from third parties for certain of our gaming
machines. As part of our contracts with the licensors, we typically provide a
prepayment of royalties, usually at the time the contract is signed even though
the product may not be introduced until months or years later. We capitalize the
prepaid royalty as other assets. At March 31, 2002 the minimum guaranteed
royalty payments totaled $20.7 million of which $16.0 million has been paid and
the balance is payable over various periods up to five years. In addition the
contracts provide for an additional $9.0 million of contingent royalty payments
based upon future events occurring. Total prepaid royalties at March 31, 2002
were $10.2 million. We amortize prepaid royalties when the product is
introduced, based upon contractual terms of the license agreements as revenue is
earned. To the extent the products we develop do not fully recoup the guaranteed
minimum, we would have to record an incremental charge, which may have a
material impact on the financial statements.

We accrue expenses related to warranty, employee benefits, software anomalies
and other contingencies based upon our best estimates of the costs that are
probable of occurrence and reasonably estimable. Such estimates are updated
monthly based on current information, however, such changes in estimates or
actual expenses may exceed accrued amounts and may have a material effect on the
financial statements.

RECENTLY ISSUED ACCOUNTING STANDARDS

In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations. This statement addresses financial accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and the
associated asset retirement costs. It applies to all legal obligations
associated with the retirement of long-lived assets that result from the
acquisition, construction, development and normal operation of a long-lived
asset. This statement is effective for our 2003 fiscal year, and early adoption
is permitted. We have not yet determined the impact, if any, of SFAS No. 143 on
our financial position and results of operations.


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<PAGE>

In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment and
Disposal of Long-Lived Assets. This statement requires that the same accounting
model be used to recognize an impairment loss for long-lived assets, whether
they are to be held and used, disposed of by sale or disposed of other than by
sale. This would apply to both previously held and used or newly acquired
assets. It also broadens the presentation of discontinued operations to include
more disposal transactions. This statement is effective for our 2003 fiscal
year, and early adoption is permitted. We have not yet determined the impact, if
any, of SFAS No. 144 on our financial position and results of operations.

LIQUIDITY AND CAPITAL RESOURCES

We believe that cash and cash equivalents and short-term investments of $95.3
million at March 31, 2002, and to a lesser extent, cash flow from operations
will be adequate to fund the anticipated level of capital expenditures, cash to
be invested in participation games, and the levels of inventories and
receivables required in the operation of our business. While cash flow from
operations will be required to fund our cash needs in the long-term, for the
next twelve months we are not dependent on such funds due to the amount of cash
and short-term investments we have and access to our bank revolving line of
credit. We have no outstanding debt. We are currently negotiating a renewal of
our $50.0 million bank revolving line of credit that expires on May 21, 2002.

Our short-term investments primarily consist of Auction Market Preferred Stocks
stated at cost, which approximates market value. These investments generally
have no fixed maturity date but most have dividend reset dates every 49 days or
less. These investments can be liquidated under an auction process on the
dividend reset dates subject to a sufficient number of bids being submitted. Our
policy is to invest cash with issuers that have a high credit rating and to
limit the amount of credit exposure to any one issuer.

We are not dependent on off-balance sheet financing arrangements to fund our
operations. The only off-balance sheet financing arrangements we have are for
leases of facilities and certain equipment and minimum guaranteed royalty
payments, which we disclosed in footnote 11 to the financial statements included
in our Annual Report on Form 10-K for the year ended June 30, 2001. We do not
have any special-purpose entities for investment or the conduct of our
operations. We do have a joint operating agreement with IGT under which we
record our proportionate share of revenues and costs from operating activities
and own certain assets and incur liabilities in connection with the operating
activities that are included in our consolidated financial statements. We have
not entered into any derivative financial instruments other than a restricted
stock grant and stock options granted to employees, members of our Board of
Directors and consultants, and we have no material related party transactions.
We do not currently have any significant firm purchase commitments for raw
material inventory.

Cash provided by operating activities before changes in operating assets and
liabilities was $29.2 million for the first nine months of fiscal 2002, as
compared to cash provided of $52.4 million for the first nine months of fiscal
2001. The current period decrease relative to the comparable prior year period
was due to lower net income due to software anomalies and a lower tax benefit
from the exercise of common stock options in the current period, partially
offset by greater depreciation expense in the current period. We anticipate this
reduced level of cash from operations to continue over the next twelve months
due to anticipated lower revenues from decreased game sales and higher research
and development expenses to implement our technology improvement plan, partially
offset by our cost reduction efforts.

The changes in operating assets and liabilities resulted in $12.8 million of
cash inflow for the nine months ended March 31, 2002, compared with a cash
outflow of $30.2 million during the comparable prior year period. The cash
inflow for the nine months ended March 31, 2002 was primarily due to a $23.8
million decrease in accounts and notes receivable reflecting reduced sales
levels and increased collections, partially offset by an $3.3 million increase
in inventories and a $6.3 million reduction in current liabilities from the
comparable balances at June 30, 2001. The increase in inventories is primarily
due to raw materials and finished goods for the HOLLYWOOD SQUARES and
PICTIONARY(TM) themed participation games. The reduction of current liabilities
is due to a lower level of business. The cash outflow for the nine months ended
March 31, 2001 was primarily due to increases in receivables, inventories, and
current income tax payments, and a decrease in current liabilities from the
comparable balances at June 30, 2000. We have not experienced significant bad
debt expense in any of the periods presented.

Cash used by investing activities was $28.7 million for the nine months ended
March 31, 2002, compared with $35.5 million for the comparable prior year
period. Cash used for the purchase of property, plant and equipment for the



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<PAGE>

nine months ended March 31, 2002 was $12.1 million compared with $4.9 million
for the comparable prior year period. This increase resulted from the continued
renovation of our Chicago facility into a technology campus, which was
substantially completed in the March 2002 quarter. We expect to spend another
$2.0 to $3.0 million to complete this renovation. Cash used for additions to
participation games was $12.7 million and $13.6 million for the nine months
ended March 31, 2002 and 2001, respectively. The decrease in the nine months
ended March 31, 2002 was due to postponing game introductions until later in the
year, lower roll-out of game conversions due to the software anomalies and a
leveling off of the number of participation games we have installed at casinos.
Net cash of $1.3 million was used for the purchase of short-term investments for
the nine months ended March 31, 2002, compared to $16.9 million in the
comparable prior year period. We used $2.5 million of cash in the nine months
ended March 31, 2002 for the acquisition of Bigfoot Software Development and
Research, LLC, which is engaged in the design and development of a proprietary
wide-area progressive system for us.

Cash used by financing activities was $5.6 million for the nine months ended
March 31, 2002 compared with cash provided by financing activities of $3.9
million for the prior year nine month period. During the nine months ended March
31, 2002, we received cash of $1.1 million from the exercise of stock options
compared to $3.9 million in the prior year period. In January 2002, our Board of
Directors authorized a twelve-month, $20 million common stock share repurchase
program. This allows us to purchase our stock from time to time in open market
or privately negotiated transactions. The timing and actual number of shares to
be purchased will depend on market conditions. During the quarter ended March
31, 2002, we repurchased 405,500 shares for an aggregate price of $6.7 million.
This program could further reduce our cash balance and number of outstanding
common shares through January 2003.


RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2002 COMPARED WITH
THREE MONTHS ENDED MARCH 31, 2001

Consolidated revenues decreased 49.0% to $36.1 million in the quarter ended
March 31, 2002 from $70.7 million in the quarter ended March 31, 2001. Total
revenue decreased $34.7 million: $35.0 million from decreased machine sales
slightly offset by a $0.3 million increase in participation and lease revenue.
We shipped 948 video and reel-type gaming devices in the current quarter,
resulting in product and parts sales of $12.9 million versus 5,294 gaming
devices and $47.9 million of product and parts sales in the comparable prior
year quarter. Gaming device sales were lower due to a lack of regulatory
approvals for new games titles and our inability to sell into certain
jurisdictions until the next upgrade of our current operating software is
approved. The average sales price increased slightly from $8,313 in the prior
year's quarter to $8,481 in the current year's quarter.

Participation and lease revenue increased from $22.9 million in the March 2001
quarter to $23.2 million in the March 2002 quarter. We had a total of 5,647
units installed at March 31, 2002, compared to 5,394 units installed at March
31, 2001. The installed base increased due to placements of HOLLYWOOD SQUARES
themed games, partially offset by a decrease in the Puzzle Pays(TM) series of
games. Average net win per day for machines decreased from $42.99 in the March
2001 quarter to $38.53 in the March 2002 quarter. This decrease reflects lower
game performance in jurisdictions where we were not able to refresh our
installed base of participation games with new themes due to the delay in
receiving regulatory approvals as a result of the software anomalies previously
mentioned. The participation backlog, which represents customer indications of
interest in our participation games, stood at a record high of over 1,500 units
as of April 30, 2002.

Consolidated gross profit in the quarter ended March 31, 2002 declined 46.4% to
$22.0 million from $41.0 million in the quarter ended March 31, 2001. The gross
margin percentage increased from 57.9% in the quarter ended March 31, 2001 to
60.9% in the quarter ended March 31, 2002. The increase in the gross margin
percentage resulted from a shift in the revenue mix from lower margin machine
sales to higher margin participation and lease revenues. Participation and lease
revenues were 64.3% of total revenues in the March 2002 quarter, compared to
32.3% in the March 2001 quarter due to the decline of machine sales revenue in
the current year quarter. The gross profit margin on gaming machine sales was
20.0% in the March 2002 quarter, compared to 44.8% in the March 2001 quarter.
The margin was 24.8 percentage points below the prior year's quarter due to
lower production volume, lower margin products representing a higher percentage
of machine sales revenues due to the reduction in game sales, and higher costs
for reconditioning games in our efforts to reduce inventories. The gross profit
margin on participation and


                                       12
<PAGE>

lease revenues decreased slightly from 85.5% in the March 2001 quarter to 83.5%
in the March 2002 quarter primarily due to lower revenue per day coupled with
higher conversion and parts costs in the March 2002 quarter.

Research and development expenses increased $2.0 million, or 43.4%, in the
current quarter to $6.7 million from $4.7 million in the March 2001 quarter as
we continued to invest in people and technologies to develop new games, product
platforms and operating systems. This increase was primarily due to increased
headcount, including expenditures related to developing our wide-area
progressive system and initial costs to improve our technology foundation. We
expect further increases in research and development expenses as we continue to
build our development staff to become a full service gaming machine provider to
our customers.

Selling and administrative expenses decreased 22.8% from $12.4 million in the
prior year's quarter to $9.5 million in the current year's quarter. The current
quarter reflects the results of our efforts to manage controllable expenses and
the mid-January headcount reductions given the reduced revenues we experienced.

Depreciation and amortization, which includes depreciation of participation
games, increased during the current year's quarter to $6.3 million from $4.6
million in the prior year's quarter due to the increase in the average installed
base of participation games. The average installed base was 5,743 units for the
March 2002 quarter, compared to 5,181 units for the March 2001 quarter.

Operating loss was $0.6 million in the current year's quarter, compared to
operating income of $19.0 million in the prior year's quarter. The financial
results of the current year's quarter reflect lower gross profits, higher
research and development costs related to new products and technology platforms,
as well as higher depreciation related to growth in the installed base of
participation games.

The provision for income taxes on continuing operations reflects breakeven
operations for the current quarter, as compared to an effective rate of 38.0% in
the March 2001 quarter.

Net income was nil per diluted share for the current year's quarter compared to
net income of $12.7 million, or $0.39 per diluted share, for the prior year's
quarter.

NINE MONTHS ENDED MARCH 31, 2002 COMPARED WITH
NINE MONTHS ENDED MARCH 31, 2001

Consolidated revenues decreased 33.6% to $131.5 million in the nine month period
ended March 31, 2002 from $198.0 million in the nine month period ended March
31, 2001. Total revenue decreased $66.5 million: $74.6 million from decreased
machine sales partially offset by an $8.1 million increase in participation and
lease revenue. We shipped 5,604 video and reel-type gaming devices in the
current nine month period, resulting in product and parts sales of $59.2 million
versus 14,857 gaming devices and $133.8 million of product and parts sales in
the comparable prior year nine month period. Gaming device sales in the nine
months ended March 31, 2002 were lower due to the continued impact on product
sales from a series of software anomalies and the publicity concerning them that
we experienced beginning in April 2001. Gaming device sales were lower than
normal due to a lack of regulatory approvals for new games titles and our
inability to sell into certain jurisdictions until the next upgrade of our
current operating software is approved. The average sales price increased
slightly from $8,312 in the prior year's nine month period to $8,314 in the
current year's nine month period.

The increase in participation and lease revenue from $64.2 million in the March
2001 nine month period to $72.3 million in the March 2002 nine month period was
due to an increase in the installed base of participation games of which we had
a total of 5,647 units installed at March 31, 2002, compared to 5,394 units
installed at March 31, 2001. The installed base increased due to placements of
HOLLYWOOD SQUARES games, partially offset by a decrease in the Puzzle Pays
series games. Average net win per day for machines decreased from $43.69 in the
March 2001 nine month period to $39.18 in the March 2002 nine month period. This
decrease reflects lower game performance in jurisdictions where we were not able
to refresh our installed base of participation games with new themes due to the
delay in receiving regulatory approvals as a result of the software anomalies
previously mentioned, as well as lower daily revenues experienced after the
September 11 attack for those participation games primarily in Nevada. The
participation backlog for our participation games stood at a record high of over
1,500 units as of April 30, 2002.


                                       13
<PAGE>

Consolidated gross profit in the nine month period ended March 31, 2002 declined
26.2% to $83.8 million from $113.5 million in the nine month period ended March
31, 2001. The gross margin percentage increased from 57.3% in the nine month
period ended March 31, 2001 to 63.7% in the nine month period ended March 31,
2002. The increase in gross margin percentage resulted from a shift in the
revenue mix from lower margin machine sales to higher margin participation and
lease revenues. Participation and lease revenues were 55.0% of total revenues in
the March 2002 nine month period, compared to 32.4% in the March 2001 nine month
period due to the decline of machine sales revenue in the current nine month
period. The gross profit margin percentage on gaming machine sales was 37.7% in
the March 2002 nine month period, compared to 43.7% in the March 2001 nine month
period. The reduced margin on machine sales as compared with the prior year nine
month period was due to lower production volume, lower margin products
representing a higher percentage of machine sales revenues due to the reduction
in game sales, and higher costs for reconditioning games in our efforts to
reduce inventories. The gross profit margin on participation and lease revenues
decreased slightly from 85.8% in the March 2001 nine month period to 85.0% in
the March 2002 nine month period.

Research and development expenses increased $6.4 million, or 55.7%, in the
current nine month period to $17.9 million from $11.5 million in the March 2001
nine month period as we continued to invest in people and technologies to
develop new games, product platforms and operating systems. The current nine
month period reflects $0.4 million of employee separation costs. The research
and development expense increase was primarily due to increased headcount,
including expenditures related to developing our wide-area progressive system
and initial costs to improve our technology foundation. We expect further
increases in research and development expenses as we continue to build our
development staff to become a full service gaming machine provider to our
customers.

Selling and administrative expenses were $35.5 million in the prior year nine
month period compared to $38.3 million in the current year's nine month period.
The current nine month period reflects $0.7 million of employee separation
costs. We moved to control expenses in the March 2002 quarter given the reduced
revenues we anticipated.

Depreciation and amortization, which includes depreciation of participation
games, increased during the current year nine month period to $18.4 million from
$13.1 million in the prior year nine month period due to the increase in the
average installed base of participation games. The average installed base was
5,784 units for the March 2002 nine month period, compared to 4,664 units for
the March 2001 nine month period.

Operating income was $12.0 million in the current year nine month period,
compared to operating income of $47.3 million in the prior year nine month
period. The financial results of the current year nine month period reflect
lower gross profits coupled with $1.3 million of employee separation costs,
higher research and development costs related to new products and technology
platforms, as well as higher depreciation related to growth in the installed
base of participation games. The prior nine month period includes $3.4 million
of corporate relocation costs.

The provision for income taxes on continuing operations decreased to $5.3
million in the current year nine month period from $19.3 million in the prior
year nine month period. The decrease was due to lower pre-tax income in the
current year nine month period. The effective tax rate was 36.9% in the March
2002 nine month period, compared to 38.0% in the March 2001 nine month period.
This lower effective rate reflects the beneficial tax treatment of foreign
sourced income and dividend investment income, and higher tax credits.

Income from continuing operations was $9.1 million, or $0.28 per diluted share,
for the current year nine month period compared to income from continuing
operations of $31.6 million, or $0.98 per diluted share, for the prior year nine
month period.

MONOPOLY(TM) is a trademark of Hasbro, Inc (C) 2002 Hasbro, Inc. Used with
permission. All rights reserved.

HOLLYWOOD SQUARES(TM) is a registered trademark of King World Productions, Inc.
All rights reserved.

SURVIVOR(TM) is a trademark of Survivor Productions LLC. Used under license from
CBS Consumer Products. All rights reserved.

PICTIONARY(TM) is a trademark of Pictionary Incorporated, Nevada, USA. All
rights reserved.



                                       14
<PAGE>
MEGAJACKPOTS(TM) is a trademark of IGT.  All rights reserved.

Puzzle Pays(TM), Party Train(TM), and Hot Properties(TM) are trademarks of WMS
Gaming Inc. (C) 2002 WMS Gaming Inc.  All rights reserved.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Not applicable.

                                     PART II
                                OTHER INFORMATION


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

Refer to our Form 10-Q for the period ended December 31, 2001, in which we
previously reported on the matters submitted to a vote of security holders on
January 15, 2002 and the results thereof.

ITEM 5.  OTHER INFORMATION

CHANGE IN ANNUAL MEETING DATE

The Board of Directors intends to convene our next Annual Stockholders Meeting
in November 2002, rather than in January 2003. Accordingly, we must receive any
stockholder proposals to be acted upon at this meeting on or before June 17,
2002 in order to consider including them in our proxy materials for that
meeting. In addition, if we do not receive notice of a stockholder proposal to
be acted on at our Annual Stockholders Meeting on or before August 8, 2002, our
proxy for that meeting may confer discretionary authority to vote on any such
proposal.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits

3(a)     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 Exhibit 3(a) to our Annual Report on Form 10-K for the year ended
         June 30, 1994.

3(b)     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 Exhibit
         3(a) to our Quarterly Report on Form 10-Q for the fiscal quarter ended
         March 31, 1998.

3(c)     Form of Certificate of Designations of the Powers, Designations,
         Preferences, and Relative, Participating, Optional or Other Rights and
         Qualifications, Limitations and Restrictions of Series A Preferred
         Stock, incorporated by reference to Exhibit A to the Form of Rights
         Agreement dated as of March 5, 1998 between us and The Bank of New
         York, as Rights Agent, filed as Exhibit 1 to our Registration Statement
         on Form 8-A (File No. 1-8300) filed March 25, 1998.

3(d)     By-Laws of WMS, as amended and restated through June 26, 1996,
         incorporated by reference to Exhibit 3(b) to our Annual Report on Form
         10-K for the year ended June 30, 1996.

10(a)    Restricted Stock Agreement between WMS Industries Inc. and Louis J.
         Nicastro dated March 1, 2002, incorporated by reference from Exhibit
         4.5 to our Registration Statement on Form S-8 (File No. 333-87676)
         filed with the Commission on May 6, 2002.

(b)  Reports on Form 8-K.
         None


                                       15
<PAGE>


                                   SIGNATURES

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

                                  WMS INDUSTRIES INC.




Dated: May 15, 2002               By: /s/  Scott D. Schweinfurth
                                           Scott D. Schweinfurth
                                           Executive Vice President,
                                           Chief Financial Officer and Treasurer
                                           (Principal Financial and Accounting
                                           Officer)








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