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                         SEVERANCE AGREEMENT AND RELEASE


         This SEVERANCE AGREEMENT AND RELEASE ("Agreement") is made as of the
28th day of February, 1998, by and among GTECH Holdings Corporation, GTECH
Corporation (together with their respective direct and indirect subsidiaries,
collectively, "GTECH"), with offices at 55 Technology Way, West Greenwich, Rhode
Island 02817 and Victor Markowicz ("Mr. Markowicz"), who resides at 2584
Northwest 64th Boulevard, Boca Raton, Florida 33496.

                                   WITNESSETH:

         WHEREAS, the parties have agreed that it is in their mutual best
interest that Mr. Markowicz 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. Markowicz hereby resigns: (a) as an employee, officer, director and
         Vice Chairman of the Board of Directors of GTECH Holdings Corporation;
         (b) as an employee 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 March 1, 1998 (the
         "Resignation Date"), such resignation to include without limitation a
         resignation from any long-term duties with respect to advice and
         assistance for the three-year post employment period referenced in his
         Employment Agreement (as hereinafter described) that Mr. Markowicz
         would continue to provide.

2.       On April 1, 1998 (or before in its discretion), GTECH shall make to Mr.
         Markowicz a lump sum payment with respect to post-employment severance
         of $6,597,836.00 (which reflects a deduction of all federal income tax
         and Medicare withholdings).

3.       From and after the Resignation Date, and except as otherwise expressly
         provided herein, Mr. Markowicz 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.


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4.       As of the Resignation Date, Mr. Markowicz 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. Markowicz in writing concerning his options with regard to
         his 401(k) account. Anything to the contrary notwithstanding: (a) Mr.
         Markowicz 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; (b) GTECH shall also
         respect Mr. Markowicz' rights, if any, to continued medical coverage at
         his own expense under the Consolidated Omnibus Budget Reconciliation
         Act (COBRA) and (c) Mr. Markowicz shall continue to have access to and
         the use of his office in Boca Raton, at GTECH expense, for the period
         ending May 31, 1998. During that period of time Michelle Boisvert, an
         employee of GTECH, shall continue to be assigned to Mr. Markowicz to
         assist him in his transition. Ms. Boisvert's compensation and
         anticipated expenses for such period have been paid by Mr. Markowicz
         pursuant to a deduction from the amount set forth in Section 2.

5.       a. In consideration of the foregoing, Mr. Markowicz 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. GTECH will continue to cooperate in enabling Mr. Markowicz
         and the Victor Markowicz Irrevocable Trust-1990 to sell unregistered
         shares of GTECH Holdings Corporation Common Stock pursuant to Rule 144.

         b. In consideration for the above release, GTECH hereby releases and
         forever discharges Mr. Markowicz 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. Markowicz' actions as an employee, officer or director
         and hereby covenants not to file a lawsuit or 

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         charge to assert such claims.

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

6.       Mr. Markowicz 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. Markowicz acknowledges
         that he has entered into this Agreement on the prior advice of counsel.

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

         a. Confidential Information. Mr. Markowicz shall not knowingly use for
         Mr. Markowicz' 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. Markowicz 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. Markowicz from a third party without binder of secrecy. Mr.
         Markowicz shall use his best efforts to return to GTECH any physical
         embodiment of such confidential information as soon as possible, but in
         all events by May 31, 1998.

         b. Non-Competition. For the period ending on the third anniversary of
         the Resignation Date, Mr. Markowicz 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) 



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         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.
         Markowicz' 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. Markowicz 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.

         c. Remedies. Mr. Markowicz recognizes that the possible restrictions on
         Mr. Markowicz' 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.
         Markowicz expressly acknowledges that such restrictions are fair and
         reasonable for that purpose. Mr. Markowicz 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. Markowicz 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. Markowicz 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. Markowicz's expenses, including reasonable
         attorneys' fees, but shall not be obligated to compensate him or any
         subsequent employer for his time.

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


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         similar proceeding, at GTECH expense.

9.       Mr. Markowicz shall use his best efforts to return to GTECH any GTECH
         property in his possession as soon as possible, but in all events by
         May 31, 1998.

10.      Mr. Markowicz 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. Markowicz.

11.      Mr. Markowicz 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 GTECH or Mr. Markowicz.

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. Markowicz and may not be assigned by
         him. However, in the event of Mr. Markowicz'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. Markowicz
         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. Markowicz and GTECH Corporation, which is incorporated
         by reference herein and made a part hereof shall continue in full force
         and effect.


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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. Markowicz
         acknowledges that he has not relied upon any representation or
         statement, written or oral, not set forth in this Agreement.

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

20.      This Agreement may be executed in any number of counterparts, each of
         which shall be an original but all of which together shall constitute
         one instrument.


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         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth above.

GTECH Holdings Corporation               Attest:



by
  ------------------------------         ------------------------------


GTECH Corporation                        Attest:



by
  ------------------------------         ------------------------------

                                         Witness:



------------------------------           ------------------------------
Victor Markowicz



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