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GTECH ANNOUNCES FISCAL YEAR 2003 THIRD QUARTER RESULTS
Company Exceeds Targets; Increases Full Year Guidance

(West Greenwich, Rhode Island  -- December 12, 2002) – GTECH (NYSE: GTK) today announced earnings for the third quarter and first nine months of fiscal year 2003, ended November 23, 2002.

"The third quarter was an outstanding quarter for GTECH, financially, operationally, and strategically," said GTECH President and Chief Executive Officer W. Bruce Turner. "Our financial performance has once again exceeded targets on all levels, driven by robust same store sales growth in the U.S., new international services contracts, and the benefits of our efficiency-improvement process."

"We are encouraged by the positive trends we have seen in recent months," said GTECH Senior Vice President and Chief Financial Officer Jaymin B. Patel. "The combined effect of growth in service revenues, margin expansion, and close management of operating expenses drove operating income up by approximately $15 million or 40 percent."

Operating Results
Revenues for the third quarter of fiscal 2003 totaled $256.5 million, down 2.7% from the $263.6 million of revenues in the third quarter of fiscal 2002, due to lower product sales, which were partially offset by higher service revenues. Net income was $32.8 million, or $0.57 per diluted share, up substantially over net income of $21.6 million, or $0.37 per diluted share, for the same period last year [$23.0 million, or $0.39 per diluted share, had the new rules on accounting for goodwill been applicable].

Revenues for the first nine months of fiscal 2003 were $708.8 million, down 3.6% from revenues of $735.1 million for the same period last year, due to lower product sales, which were partially offset by higher service revenues. Net income was $100.1 million, or $1.71 per diluted share, up substantially over net income of $57.4 million, or $0.94 per diluted share, for the same period last year [$61.6 million, or $1.02 per diluted share, had the new rules on accounting for goodwill been applicable].

Earnings per share in the prior year have been restated to reflect the 2-for-1 common stock split effected in the form of a stock dividend, which was distributed on May 23, 2002, to shareholders of record as of May 16, 2002.

Third Quarter
Service revenues were $207.8 million in the third quarter, up 5.8% over the $196.4 million of service revenues in the same quarter last year. Stronger same store sales, combined with several new international contracts and higher service revenues from Colombia, drove this increase, which was partially offset by lower service revenues from the weakening of the Brazilian real against the U.S. dollar.

Had last year's average exchange rates prevailed throughout the most recent quarter, the Company estimates that service revenues would have increased by approximately 10.0%, compared to the third quarter of last year.

Product sales in the third quarter of fiscal 2003 were $48.7 million, down $18.5 million from the $67.2 million recorded in the third quarter of fiscal 2002. Prior year product sales included one-time sales of terminals and software to our customer in the United Kingdom, which were partially offset by the sale of a turnkey system to our customer in France and the sale of terminals to our customer in Spain in the third quarter of the current fiscal year.

Service margins improved to 37.9% in the third quarter of fiscal 2003 from 29.6% in the third quarter of fiscal 2002, primarily driven by new contracts, lower depreciation associated with existing contracts, and improved operating efficiencies.

Product margins declined to 19.7% in the third quarter of fiscal 2003 versus 23.8% in the third quarter of last year, reflecting the sale of a turnkey system to France and the sale of terminals to Spain, partially offset by the absence of inventory reserves recorded in the prior year in connection with a product sale contract with a customer in Italy.

Other income of $0.2 million in the third quarter of fiscal 2003 includes $2.8 million of foreign exchange gains principally associated with Brazil, partially offset by $2.3 million of net costs associated with the early retirement of the balance of $40 million of 2004 Private Placement Notes.

Interest expense declined $2.9 million, or 51.5%, from $5.6 million in the third quarter of fiscal 2002 to $2.7 million in the third quarter of fiscal 2003, primarily due to lower debt resulting from the retirement of $165 million of Private Placement Notes in the fourth quarter of fiscal 2002, and $40 million of Private Placement Notes in the third quarter of fiscal 2003.

Year to Date
Service revenues for the first nine months of fiscal 2003 were $643.1 million, up $26.5 million, or 4.3%, over the $616.6 million of service revenues in the same period last year. Stronger same store sales, combined with several new international contracts and higher service revenues from Colombia, drove this increase, which was partially offset by lower service revenues from the weakening of the Brazilian real against the U.S. dollar.

Had last year's average exchange rates prevailed throughout the first nine months of fiscal 2003, the Company estimates that service revenues would have increased by approximately 6.6%, compared to the same period last year.

Product sales in the first nine months of fiscal 2003 were $65.7 million, down $52.8 million from the $118.5 million in the same period last year. Prior year product sales included one-time sales of terminals and software to our customer in the United Kingdom, which were partially offset by the sale, in the third quarter of the current year, of a turnkey system to our customer in France and the sale of terminals to our customer in Spain.

Service margins improved to 37.3% compared to 30.8% in fiscal 2002, primarily driven by new contracts, lower depreciation associated with existing contracts, and improved operating efficiencies.

Product margins improved to 24.8% this year versus 20.1% last year due to the absence of prior year inventory reserves recorded in connection with a product sale contract with a customer in Italy, partially offset by lower margins associated with the sale of a turnkey system to our customer in France, and the sale of terminals to our customer in Spain, which were recorded in the current fiscal year.

Operating expenses in the first nine months of fiscal 2003 were $94.7 million, down $17.1 million, compared to the $111.8 million of operating expenses incurred in the first nine months of fiscal 2002, primarily driven by the continued execution of cost saving initiatives and emphasis on improving operating efficiencies. The Company also benefited from the new rules on goodwill accounting, which eliminated the amortization of goodwill.

Interest expense declined $10.1 million, or 54.7%, from $18.5 million in the first nine months of fiscal 2002, to $8.4 million in the first nine months of fiscal 2003, primarily due to lower debt balances resulting from the retirement of $165.0 million of Private Placement Notes in the fourth quarter of fiscal 2002, and $40 million of Private Placement Notes in the third quarter of fiscal 2003.

Cash Flow and Investments
During the first nine months of fiscal 2003, the Company generated $281.0 million of cash from operations, which was used to fund investing activities totaling $132.6 million, resulting in free cash flows of $148.4 million. These free cash flows were used to retire $40 million of Private Placement Notes and repurchase $57.4 million, or 2.1 million shares, of the Company's common stock. At the end of the fiscal 2003 third quarter, the Company had no borrowings under its $300 million credit facility.

Share Repurchase
GTECH also announced last week that the Board of Directors authorized a new open market share repurchase program for up to an aggregate amount of $100 million of the Company's outstanding common stock through March 31, 2004. The new program is in addition to the unused capacity remaining in the existing program, which is scheduled to expire in February 2003. It is contemplated that the share repurchases will be accomplished through periodic purchases on the open market. The timing of such purchases will be dependent upon market conditions and corporate considerations.

Financial Outlook
The Company also revised the guidance upward for fiscal year ending February 22, 2003.

The Company continues to expect service revenue growth in the range of 2% to 3%. The Company expects product sales to be in the range of $100 to $110 million.

The Company expects that service profit margins will be in the range of 37% to 39%, and product sale profit margins to be in the range of 25% to 27%.

Based on the improved outlook, it now expects earnings per share for fiscal 2003 to be in the range of $2.30 to $2.35 on a fully-diluted basis, rather than the previously announced $2.10 to $2.20 per share.

Earnings per diluted share for the fourth quarter are expected to be in the range of $0.59 to $0.64.

For fiscal 2004, ending February 28, 2004, the Company expects service revenues to be comparable to fiscal 2003 levels, reflecting a 5% to 6% increase in same store sales and net contract wins, offset by a number of factors, including contractual rate changes, fluctuations in foreign exchange rates against the U.S. Dollar, and modified revenue expectations from Brazil. The Company expects product sales in the range of $90 to $100 million.

The Company expects service margins to be in the range of 39% to 41% and product margins in the range of 21% to 23%.

Based upon a diluted share estimate of 57 million, the Company believes that earnings per share will be in the range of $2.50 to $2.60 for fiscal 2004.

The Company notes that fiscal 2004 will be a 53-week year, an event that occurs every five to six years.

Quarter Highlights
During the third quarter, GTECH:

• Signed a five-year contract extension with the Oregon State Lottery to provide video lottery software development services;
• Signed a three-year field services agreement with the Virginia Lottery;
• Signed a multi-year integrated services contract with the California Lottery to provide a new lottery system and communications network;
• Was selected by Westdeutsche Lotterie GmbH & Co (WestLotto) to provide a new online and instant-ticket central system solution and services;
• Was awarded five-year subcontracts to provide call center services for select automated government benefits programs in Illinois and Maine;
• Was invited to negotiate a new five-year contract to provide online lottery services to the Wisconsin Lottery; and,
• Was awarded a seven-year integrated services contract with the Georgia Lottery to provide a new online lottery solution and wireless telecommunications network.

"These wins come on the heels of significant wins in California and Ireland and are a clear validation of GTECH's business strategy, our technology, and above all, our understanding of what lotteries, retailers, and players are looking for today and in the future," continued Mr. Turner.

Other Business Developments
GTECH further strengthened its board of directors and senior management team by appointing General Emmett Paige, Jr. as Chairman of the Board; David J. Calabro as Chief Operating Officer; and Timothy B. Nyman as Senior Vice President of Global Services.

In addition, GTECH announced that it was not chosen by the Colorado Lottery as the apparent successful vendor to provide equipment and services for a new integrated online and instant-ticket lottery system.

The Company also announced a voluntary recall by the Taiwan Public Welfare Lottery (the Lottery) of previously issued instant tickets distributed by Lottery Technology Services Corporation, a partnership between Acer, Incorporated and GTECH.

The Lottery took this action in response to concerns about potential operational and technical issues related to the instant ticket games. As a result of the voluntary recall, very few ticket books were returned and the event had little effect on ticket sales.

The tickets have been replaced by a new set of tickets. The issues addressed in Taiwan were the product of unique circumstances that are not present in other GTECH® jurisdictions.

The Washington State Lottery joined the Mega Millions game, a multi-state lottery game designed to produce larger payoffs for players and more profits for participating states which include Georgia, Illinois, New York, Michigan, New Jersey, Ohio, Massachusetts, Virginia, and Maryland.

In an effort to increase sales and fill a budget shortfall, the Michigan Lottery recently introduced Sunday Lottery drawings and a new game, Change Play. Change Play winners are selected each day after 9:00 p.m. in a computerized random drawing that operates like a raffle. Players can buy computerized tickets for 25 cents to 99 cents each. Winnings are proportional to amounts wagered.

Certain statements contained in this press release are forward looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements include, without limitation, statements relating to the prospects and financial outlook for the Company, which reflect management assumptions regarding: (i) the future prospects for and stability of the lottery industry and other businesses in which the Company is engaged or expects to be engaged, (ii) the future operating and financial performance of the Company (including, without limitation, expected future growth in revenues, profit margins and earnings per share), and (iii) the ability of the Company to retain existing business and to obtain and retain new business. Such forward looking statements reflect management's assessment based on information currently available, but are not guarantees and are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in the forward looking statements.

These risks and uncertainties include, but are not limited to, those set forth above, in the Company's subsequent press releases and on Reports by the Company on Forms 10-K, 10-Q and 8-K, and other reports and filings with the Securities and Exchange Commission, as well as risks and uncertainties respecting: (i) the potential impact of extensive and evolving government regulations upon the Company's business; (ii) the ability of the Company to continue to retain and extend its existing contracts and win new contracts; (iii) the possibility of slower than expected growth or declines in sales of lottery goods and services by the Company or the Company's customers; (iv) exposure to foreign currency fluctuations; (v) risks and uncertainties inherent in doing business in foreign jurisdictions; (vi) the relatively large percentage of the Company's revenues attributable to a relatively small number of the Company's customers; (vii) the fact that several of the Company's larger contracts are to be rebid within the next six months; (viii) the possibility of significant fluctuation of quarterly operating results; (ix) the intensity of competition in the lottery industry; (x) the possibility of substantial penalties under and/or termination of the Company's contracts; (xi) the ability of the Company to respond to technological change and to satisfy the future technological demands of its customers; (xii) opposition to expansion of lottery and gaming; (xiii) the Company's ability to attract and retain key employees; and (xiv) the possibility of adverse determinations in pending legal proceedings.

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GTECH, a leading global information technology company with $1 billion in revenues and 4,300 people in 43 countries, provides software, networks, and professional services that power high-performance, transaction processing solutions. The Company's core market is the lottery industry, with a growing presence in financial services transaction processing. For more information about the Company, please visit GTECH's website at http://www.gtech.com.

Consolidated statement of operations to follow:

Income Statement, Three Months Ended

Income Statement, Nine Months Ended

Consolidated Balance Sheets

Consolidated Statements of Cash Flows