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                         SEVERANCE AGREEMENT AND RELEASE


         This SEVERANCE AGREEMENT AND RELEASE ("Agreement") is made as of the
third day of February, 1998, by and among GTECH Holdings Corporation, GTECH
Corporation (together with their respective direct and indirect subsidiaries,
collectively, "GTECH") and Guy B. Snowden ("Mr. Snowden").

                                   WITNESSETH:

         WHEREAS, the parties have agreed that it is in their mutual best
interest that Mr. Snowden sever his relationship with GTECH; and

         WHEREAS, the parties wish to set forth their agreement respecting the
terms and conditions thereof.

         NOW, THEREFORE, the parties hereby agree as follows:

1.       Mr. Snowden hereby resigns: (a) as an employee, director and Chairman
         of the Board of Directors of GTECH Holdings Corporation; (b) as an
         employee, director and Chairman of the Board of Directors of GTECH
         Corporation, and (c) as an employee, officer and director of all direct
         and indirect subsidiaries and other affiliates of GTECH Holdings
         Corporation, effective February 3, 1998 (the "Resignation Date").

2.       Upon execution hereof, GTECH shall make to Mr. Snowden a lump sum
         payment with respect to post-employment severance of $6,560,967.56
         (after deduction of all federal withholdings), which sum includes no
         amount or benefit arising from the United Kingdom National Lottery or
         the promotion of lotteries in the United Kingdom after February 2,
         1998.

3.       From and after the Resignation Date, and except as otherwise expressly
         provided herein, Mr. Snowden shall not be eligible for any GTECH
         benefits or perquisites, including, without limitation, medical, dental
         or vision benefits; executive physicals; insurance; long-term
         disability benefits; fringe benefits; tax "gross-ups"; automobiles; air
         travel; offices and office assistance; and security personnel.

4.       As of the Resignation Date, Mr. Snowden is no longer eligible to
         participate in the GTECH 401(k) and Profit Sharing Plan; the Executive
         Perquisites Program; the GTECH Holdings Corporation 1992 Supplemental
         Retirement Plan; or any other GTECH benefit program or plan. GTECH will
         notify Mr. Snowden in writing concerning his options with regard to 


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         his 401(k) account. Anything to the contrary notwithstanding: (a) Mr.
         Snowden shall have the option, on an annual basis, to purchase medical,
         dental and vision benefits for him and the eligible members of his
         family through GTECH at 100% of GTECH's cost; and (b) GTECH shall also
         respect Mr. Snowden's rights, if any, to continued medical coverage at
         his own expense under the Consolidated Omnibus Budget Reconciliation
         Act (COBRA).

5.       a. In consideration of the foregoing, Mr. Snowden hereby releases and
         forever discharges GTECH, its present and former directors, officers,
         employees, agents, subsidiaries, shareholders, successors and assigns
         from any and all liabilities, causes of action, debts, claims and
         demands (including without limitation claims and demands for monetary
         payment) both in law and in equity, known or unknown, fixed or
         contingent, which he may have or claim to have based upon or in any way
         related to employment(as an officer, director or employee), rights or
         entitlements related thereto or termination of such employment by GTECH
         and hereby covenants not to file a lawsuit or charge to assert such
         claims. This includes but is not limited to claims arising under the
         Federal Age Discrimination in Employment Act, and any other federal,
         state or local laws prohibiting employment discrimination or claims
         growing out of any legal restrictions on GTECH's right to terminate its
         employees. Any rights which Mr. Snowden may have to sell unregistered
         shares GTECH Holdings Corporation Common Stock pursuant to Rule 144
         shall not be unreasonably infringed by GTECH.

         b. In consideration for the above release, GTECH hereby releases and
         forever discharges Mr. Snowden and his successors, heirs and assigns
         from any and all liabilities, causes of action, debts, claims and
         demands both in law and in equity, known or unknown, fixed or
         contingent, which it may have or claim to have based upon or in any way
         related to Mr. Snowden's actions as an employee, officer or director
         and hereby covenants not to file a lawsuit or charge to assert such
         claims.

         c. The above releases shall not apply to breaches of this Agreement.

6.       Mr. Snowden understands that various State and Federal laws prohibit
         employment discrimination based on age, sex, race, color, national
         origin, religion, handicap or veteran status. These laws are enforced
         through the Equal Employment Opportunity Commission (EEOC), Department
         of Labor and State Human Rights Agencies. Mr. Snowden acknowledges that
         he has entered into this Agreement on the prior advice of counsel.


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7.       Mr. Snowden further covenants with GTECH as follows and expressly
         agrees that all payments and benefits due Mr. Snowden under this
         Agreement shall be subject to Mr. Snowden's compliance with the
         following provisions.

         a. Confidential Information. Mr. Snowden shall not knowingly use for
         Mr. Snowden's own benefit or disclose or reveal to any unauthorized
         person, any trade secret or other confidential information relating to
         GTECH, or to any of the businesses operated by it, including, without
         limitation, any customer lists, customer needs, price and performance
         information, processes, specifications, hardware, software, devices,
         supply sources and characteristics, business opportunities, marketing,
         promotional pricing and financing techniques, or other information
         relating to the business of GTECH, and Mr. Snowden confirms that such
         information constitutes the exclusive property of GTECH. Such
         restriction on confidential information shall remain in effect until
         such time as the confidential information is (i) generally available in
         the industry, (ii) disclosed in published literature or (iii) obtained
         by Mr. Snowden from a third party without binder of secrecy. Mr.
         Snowden agrees to return to GTECH any physical embodiment of such
         confidential information within seven (7) days of the execution hereof.

         b. Non-Competition. For the period ending on the third anniversary of
         the Resignation Date, Mr. Snowden shall not engage, directly or
         indirectly (which includes, without limitation, owning, managing,
         operating, controlling, being employed by, giving financial assistance
         to, participating in or being connected in any material way with any
         person or entity), anywhere in the world, in either of the following
         areas: (i) any area which involves (A) the transmission of data via
         electronic means and (B) elements of chance and/or skill, consideration
         for the opportunity to participate and (C) a prize; and (ii) any area
         which involves a computer based system in which the food stamp or
         similar government benefit is received from a central computer through
         a point-of-sale terminal or automatic bank teller machine; provided,
         however, that Mr. Snowden's ownership as a passive investor of less
         than one percent (1%) of the issued and outstanding stock of a publicly
         held corporation so engaged shall not by itself be deemed to constitute
         such competition. Further, during the period ending eighteen (18)
         months after the Resignation Date, Mr. Snowden shall not: (i) solicit
         any of GTECH's employees to leave the employment of GTECH or (ii)
         solicit any of GTECH's customers to cease doing business with GTECH.


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         c. Remedies. Mr. Snowden recognizes that the possible restrictions on
         Mr. Snowden's activities which may occur as a result of his performance
         of his obligations under this Section 7 are required for the reasonable
         protection of GTECH and its investments, and Mr. Snowden expressly
         acknowledges that such restrictions are fair and reasonable for that
         purpose. Mr. Snowden further expressly acknowledges that damages alone
         will be an inadequate remedy for any breach or violation of any of the
         provisions of this Section 7, and that GTECH, in addition to all other
         remedies hereunder, shall be entitled, as a matter of right, to
         injunctive relief, including specific performance, with respect to any
         such breach or violation, in any court of competent jurisdiction. If
         any of the provisions of this Section 7 are held to be in any respect
         an unreasonable restriction upon Mr. Snowden then they shall be deemed
         to extend only over the maximum period of time, geographic area, and/or
         range of activities as to which they may be enforceable.

8.       a. After the Resignation Date, Mr. Snowden shall make himself available
         in any third party claims, investigations, litigation or similar
         proceedings to answer any questions relating to his employment or
         actions as an employee, officer or director of GTECH, including without
         limitation attendance at any deposition or similar proceeding. GTECH
         shall pay Mr. Snowden's expenses, but shall not be obligated to
         compensate him or any subsequent employer for his time.

         b. After the Resignation Date, GTECH shall make itself available in any
         third party claims, investigations, litigation or similar proceedings
         to answer any questions relating to Mr. Snowden's employment or actions
         as an employee, officer or director of GTECH, including without
         limitation attendance at any deposition or similar proceeding.

9.       Mr. Snowden shall return to GTECH any GTECH property in his possession
         within seven (7) days of the execution hereof.

10.      Mr. Snowden shall at no time make any derogatory or disparaging
         comments regarding GTECH, its business, or its present or past
         directors, officers or employees. GTECH shall at no time make any
         derogatory or disparaging comments regarding Mr. Snowden.

11.      Mr. Snowden hereby waives any and all rights to future employment with
         GTECH.

12.      The execution of this Agreement does not represent and shall not be
         construed as an admission of a violation of any statute or law or
         breach of any duty or obligation by either 


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         GTECH or Mr. Snowden.

13.      The invalidity or unenforceability of any particular provision of this
         Agreement shall not affect the other provisions hereof, and this
         Agreement shall be construed in all respects as if such invalid and
         unenforceable provisions were omitted.

14.      This Agreement is personal to Mr. Snowden and may not be assigned by
         him. However, in the event of Mr. Snowden's death, all benefits payable
         hereunder shall be payable to his estate.

15.      This Agreement is made pursuant to and shall be governed by the laws of
         the State of New York, without regard to its rules regarding conflict
         of laws. The parties agree that the courts of the State of New York,
         and the Federal Courts located therein, shall have exclusive
         jurisdiction over all matters arising from this Agreement and further
         agree to accept service of process with respect to any such
         proceedings.

16.      This Agreement contains the entire understanding between Mr. Snowden
         and GTECH regarding the subject matter hereof and, except as expressly
         set forth herein, supersedes any prior agreements, written or oral,
         including without limitation that certain Employment Agreement dated as
         of January 23, 1990, as amended or clarified.

17.      Anything to the contrary herein notwithstanding, the terms and
         conditions of that certain Indemnification Agreement dated January 21,
         1988 between Mr. Snowden and GTECH Corporation shall continue in full
         force and effect.

18.      This Agreement may not be changed orally but only by an agreement in
         writing signed by the party against whom enforcement of any waiver,
         change, modification, extension or discharge is sought. Mr. Snowden
         acknowledges that he has not relied upon any representation or
         statement, written or oral, not set forth in this Agreement.

19.      Mr. Snowden hereby waives any rights he may have to revoke this
         Agreement after the execution hereof.


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         IN WITNESS WHEREOF, the parties have executed this Agreement on the
date set forth below.

GTECH Holdings Corporation                   Attest:


by
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-----------------------                      --------------------------
date


GTECH Corporation                            Attest:


by
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date

                                             Witness:


-----------------------                      --------------------------
Guy B. Snowden


-----------------------                      --------------------------
date


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