GAMETECH INTERNATIONAL INC, S-1/A, 1997-10-17

GAMETECH INTERNATIONAL INC
S-1/A, 1997-10-17
MISCELLANEOUS AMUSEMENT & RECREATION

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As filed with the Securities and Exchange Commission on October 17, 1997
Registration No. 333-34967
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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AMENDMENT NO. 1 TO FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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GAMETECH INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)

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DELAWARE 7999 33-0612983
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(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification No.)

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2209 W. 1ST STREET
SUITE 113-114
TEMPE, ARIZONA 85281
(602) 804-1101
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
ANDREJS K. BUNKSE, ESQ.
GENERAL COUNSEL-CORPORATE SECRETARY
GAMETECH INTERNATIONAL, INC.
2209 W. 1ST STREET
SUITE 113-114
TEMPE, ARIZONA 85281
(602) 804-1101
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
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Copies to:

PETER P. WALLACE, ESQ. JONATHAN H. GRUNZWEIG, ESQ.
MORGAN, LEWIS & BOCKIUS LLP SKADDEN, ARPS, SLATE, MEAGHER &
801 S. GRAND AVENUE, 22ND FLOM LLP
FLOOR 300 S. GRAND AVENUE
LOS ANGELES, CALIFORNIA 90017 LOS ANGELES, CALIFORNIA 90071
(213) 612-2500 (213) 687-5000

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Approximate date of commencement of proposed sale to public: As soon as
practicable after the effective date of this Registration Statement.

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If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]

CALCULATION OF REGISTRATION FEE
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PROPOSED
PROPOSED MAXIMUM
MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE OFFERING PRICE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) FEE
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Common stock, par value $.001 per share 4,266,500 $13.00 $55,464,500 $16,808(3)
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(1) Includes 556,500 shares which the Underwriters have the option to purchase
to cover over-allotments, if any.
(2) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457 of the Securities Act of 1933, as amended.
(3) Previously paid

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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.

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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.

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SUBJECT TO COMPLETION, DATED OCTOBER , 1997

PROSPECTUS
, 1997

3,710,000 SHARES
GAMETECH INTERNATIONAL, INC.

COMMON STOCK

Of the 3,710,000 shares of Common Stock, par value $.001 per share (the
"Common Stock"), offered hereby, 3,270,000 shares are being offered by GameTech
International, Inc., ("GameTech" or the "Company"), and 440,000 shares are being
sold by certain stockholders of the Company (the "Selling Stockholders"). The
Company will not receive any of the proceeds from the sale of shares by the
Selling Stockholders. See "Principal and Selling Stockholders." Prior to this
offering, there has been no public market for the Common Stock. It is currently
estimated that the initial public offering price will be between $ and $
per share. See "Underwriting" for a discussion of the factors considered in
determining the initial public offering price. After the completion of this
offering, the Company's management will beneficially own 52.3% (49.0% if the
Underwriters' over-allotment is exercised in full) of the outstanding common
stock, and as a result may be able to maintain control of matters submitted for
stockholder approval. See "Risk Factors - Control by Principal Stockholders;
Anti-Takeover Provisions." The Company has filed an application for quotation
and trading of the Common Stock on The Nasdaq National Market under the symbol
"GMTC."

SEE "RISK FACTORS" BEGINNING ON PAGE 6 HEREOF FOR INFORMATION THAT SHOULD
BE CONSIDERED BY PROSPECTIVE INVESTORS.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

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Price Underwriting Proceeds Proceeds to
to the Discounts and to the the Selling
Public Commissions(1) Company(2) Stockholders
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Per Share . . . . . . . . . . . . $ $ $ $
Total (3) . . . . . . . . . . . . $ $ $ $
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(1) THE COMPANY AND THE SELLING STOCKHOLDERS HAVE AGREED TO INDEMNIFY THE
UNDERWRITERS AGAINST CERTAIN LIABILITIES, INCLUDING LIABILITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. SEE "UNDERWRITING."
(2) BEFORE DEDUCTING EXPENSES PAYABLE BY THE COMPANY ESTIMATED AT $ . THE
COMPANY HAS AGREED TO PAY THE EXPENSES OF THE SELLING STOCKHOLDERS, OTHER
THAN UNDERWRITING DISCOUNTS AND COMMISSIONS.
(3) THE COMPANY AND THE SELLING STOCKHOLDERS HAVE GRANTED TO THE UNDERWRITERS A
30-DAY OPTION TO PURCHASE UP TO 556,500 ADDITIONAL SHARES OF COMMON STOCK
SOLELY TO COVER OVER-ALLOTMENTS, IF ANY. IF SUCH OPTION IS EXERCISED IN
FULL, THE TOTAL PRICE TO THE PUBLIC, UNDERWRITING DISCOUNTS AND
COMMISSIONS, PROCEEDS TO THE COMPANY AND PROCEEDS TO THE SELLING
STOCKHOLDERS WILL BE $ , $ , $ AND $ ,
RESPECTIVELY. SEE "UNDERWRITING."

The shares of Common Stock are being offered by the several Underwriters,
subject to prior sale, when, as and if accepted by the Underwriters, and subject
to various prior conditions, including their right to reject any order in whole
or in part. It is expected that delivery of the shares will be made in New
York, New York on or about , 1997.

DONALDSON, LUFKIN & JENRETTE PRUDENTIAL SECURITIES INCORPORATED
SECURITIES CORPORATION

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[GRAPHICS]

to be provided by amendment

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK.
SPECIFICALLY, THE UNDERWRITERS MAY OVERALLOT IN CONNECTION WITH THE OFFERING AND
MAY BID FOR AND PURCHASE SHARES OF THE COMMON STOCK IN THE OPEN MARKET. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."

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PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION, INCLUDING "RISK FACTORS" AND THE FINANCIAL STATEMENTS AND NOTES
THERETO, INCLUDED ELSEWHERE IN THIS PROSPECTUS. UNLESS OTHERWISE INDICATED,
INFORMATION IN THIS PROSPECTUS (i) DOES NOT GIVE EFFECT TO THE EXERCISE BY THE
UNDERWRITERS OF THEIR OPTION TO PURCHASE UP TO 556,500 ADDITIONAL SHARES OF
COMMON STOCK TO COVER OVER-ALLOTMENTS, IF ANY, AND (ii) ASSUMES AN INITIAL
PUBLIC OFFERING PRICE OF $ PER SHARE OF COMMON STOCK, THE MIDPOINT OF THE
OFFERING PRICE RANGE SET FORTH ON THE COVER OF THIS PROSPECTUS.

THE COMPANY

GameTech is a leading designer, developer and marketer of interactive
electronic bingo systems. The Company currently markets a fixed-base system
with light-pen-activated monitors and a portable, hand-held system which can be
played anywhere within a bingo hall. Both bingo systems display the electronic
bingo card images purchased by a player for each bingo game. The Company's
electronic bingo units enable players to play substantially more bingo than they
can play on paper cards, leading to a greater spend per player and higher profit
per bingo session for the bingo hall operator. GameTech installs the electronic
bingo systems at no cost to the operator in exchange for a percentage of the
sales generated by each unit. The Company typically enters into one to three
year contracts pursuant to which the Company receives up to 30% of the revenues
generated by GameTech units or to a lesser extent, charges fixed rates per bingo
session. Management believes that because a significant majority of players who
use GameTech's electronic bingo units also purchase paper cards, the use of
GameTech's electronic bingo units generates incremental revenues and profits for
bingo hall operators.

The Company was founded in 1994 by executives previously involved in the
bingo, slot machine, lottery and high technology software and hardware
industries to pursue their belief that an advanced, interactive, electronic
bingo system would be well received by both bingo hall operators and players.
The Company has grown rapidly, and management believes that the Company has a
competitive advantage resulting from the experience of its management, its
quality electronic bingo systems and its reputation for superior customer
service and support. The Company's growth has been accelerated by a successful
expansion into Texas which began in August 1996; for the nine months ended July
31, 1997, the Texas market accounted for approximately 45% of the Company's
revenues. For the fiscal year ended October 31, 1996, the Company's revenues
increased approximately 60% to $5.4 million from $3.4 million in the prior year.
For the nine months ended July 31, 1997, the Company's revenues increased more
than 150% to $8.9 million from $3.5 million for the same period in the prior
year. During the same period, net income increased more than 400% to $2.2
million from $422,000.

GameTech had approximately 3,900 fixed-base units and 2,000 hand-held units
operating in more than 120 Indian and charity bingo halls at July 31, 1997.
Following its development of a new generation of hand-held units introduced in
April 1997, GameTech has been increasing its penetration of existing markets.
Through August and September, GameTech added an additional 1,780 hand-held
units and 271 fixed-base units, bringing its installed base to approximately
8,000 units. Management estimates that approximately 5% of the current player
spend on bingo in the United States is attributable to electronic bingo which,
management believes, presents the Company with significant additional growth
opportunities.

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profits increase nearly dollar-for-dollar from sales of additional paper bingo
cards and electronic bingo card images. Electronic bingo systems like
GameTech's allow players to play more bingo per game than they can by hand,
which provides bingo hall operators with the potential to increase profits
commensurately. Nonprofit organizations sponsor bingo games for fund raising
purposes, while Indian tribes, casinos and government-sponsored entities operate
bingo games for profit. Bingo is a legal enterprise in 46 states (the
exceptions are Arkansas, Hawaii, Tennessee and Utah) and the District of
Columbia. Electronic bingo systems are currently permitted for charitable
organizations in 26 states, and the Company has units in operation in charitable
bingo halls in five of those states. Under the Indian Gaming Regulatory Act
("IGRA"), in the 46 states where bingo is legal, electronic bingo may be played
on tribal Indian lands as well. Bingo is currently played on tribal Indian
lands in 28 states, and the Company has units in operation in Indian bingo halls
in seven of those states.

STRATEGY

The Company's strategic objective is to increase revenues and earnings by
capitalizing on the increasing acceptance of electronic bingo and to become the
leading provider of electronic bingo units. To reach this objective, the
Company intends to:

MAINTAIN SUPERIOR CUSTOMER SERVICE. GameTech believes that its dedication
to providing superior customer service and support fosters customer loyalty and
cultivates long-term customer relationships. Approximately half of GameTech's
employees are field technicians on call 24 hours a day to support customers and
respond immediately to servicing calls. Management believes that its dedication
to superior customer service has contributed to the rapid acceptance of
GameTech's products and the Company's ability to attract and retain customers
for the long-term.

INCREASE PENETRATION WITH EXISTING CUSTOMERS. The Company closely tracks
the utilization of its units to maximize revenues. As bingo player acceptance
of electronic bingo units increases and utilization rates grow, management
installs additional electronic bingo units at its customers' bingo halls. At
more than 80% of the bingo halls where GameTech units have been in operation for
more than six months, the number of units has been increased since the initial
installation.

EXPAND CUSTOMER BASE IN EXISTING MARKETS. Management estimates that
approximately 5% of the more than $5 billion domestic bingo spend is currently
played on electronic bingo units. In the states in which the Company has units
installed in charitable bingo halls and for which data is available, GameTech
units are used by an average of approximately 8% of the charitable halls located
in those states. This low penetration level illustrates GameTech's opportunity
to increase its base of customers in its existing markets.

EXPAND INTO NEW MARKETS DOMESTICALLY. GameTech has charitable bingo hall
customers in only five of the 26 states which currently allow charitable
organizations to conduct electronic bingo, and is actively pursuing entry into
seven additional states. In addition, GameTech has Indian bingo hall customers
in only seven of the 28 states where bingo is currently played on Indian lands
and is actively pursuing Indian bingo hall customers in seven additional states.
As part of its strategy to help expand the charity electronic bingo market, the
Company is pursuing changes to legislation in several states to permit
electronic bingo. In addition, the Company intends to initiate route operations
to serve bingo halls which otherwise would be uneconomical to serve. The route
operations would move the Company's hand-held units between various charity
bingo halls on days that the respective halls hold bingo sessions.

EXPAND INTERNATIONALLY. GameTech is in the process of adding salespeople
and distributors to expand into Canada, which management estimates has an annual
bingo spend of approximately $2 billion. GameTech is also actively evaluating
opportunities to expand into other countries.

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participating players from different Indian bingo halls into one large bingo
game, which will allow TSBN to offer bigger prizes than those generally offered
by a single bingo hall. Initially, TSBN intends to include 15 Indian bingo
halls, with a goal of including more than 25 Indian bingo halls after the first
12 months of operation.

DEVELOP NEW APPLICATIONS. GameTech maintains an ongoing product
development program focused on enhancing its existing products and developing
new products and applications for its technology. In January 1996, GameTech
introduced its first hand-held unit, followed by an improved version in April
1997. In July 1996, the Company introduced its GameTech Gold fixed-base system,
which incorporates picture-in-picture technology that allows bingo players to
watch television while playing bingo. Other opportunities under development
include progressive bingo games and parimutuel bingo games (during non-session
hours), which are anticipated to generate additional revenue for Indian bingo
hall operators by linking fixed-base units nationwide into a single high-stakes
bingo game.

DEVELOP STRATEGIC ALLIANCES/ACQUIRE COMPLEMENTARY COMPANIES. The Company
selectively reviews opportunities to grow through the establishment of strategic
alliances and acquisitions which could extend its presence into new geographic
markets, expand its client base, add new products and/or provide operating
synergies. The Company also intends to pursue joint operating agreements or
joint ventures for additional bingo opportunities, including, in particular,
all-electronic bingo halls.

The Company is a Delaware corporation with its executive offices at 2209 W.
1st Street, Suite 113-114, Tempe, Arizona 85281, and its telephone number is
(602) 804-1101.

THE OFFERING
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Common Stock Offered:
By the Company . . . . . . . . . . . . . . . . . 3,270,000 shares
By the Selling Stockholders. . . . . . . . . . . 440,000 shares
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Total. . . . . . . . . . . . . . . . . . . . 3,710,000 shares

Common Stock outstanding after this offering(a)(b) 9,595,713 shares

Use of Proceeds. . . . . . . . . . . . . . . . . . .The estimated net proceeds to the Company of $ million
from this offering will be used to fund the Company's
growth plans, to repay substantially all of its outstanding
indebtedness (approximately $4.3 million at July 31, 1997,
excluding debt to be converted into Common Stock upon
completion of this offering) and for other general corporate
purposes. A portion of the proceeds may also be used in
connection with any opportunities to acquire or invest in
complementary businesses, products or technologies. See
"Use of Proceeds."

Proposed Nasdaq National Market symbol . . . . . . ."GMTC"

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(a) Excludes options to purchase 1,619,050 shares of Common Stock
outstanding as of July 31, 1997, of which 1,032,750 options are currently
exercisable.
(b) Assumes (i) the conversion by certain officers of convertible subordinated
debt (including accrued interest) of $1,475,888 at July 31, 1997 into
1,475,888 shares of Common Stock, and (ii) the conversion into 400,000
shares of Common Stock of 400,000 shares of the Company's Series A
Preferred Stock (the "Series A Preferred") sold in a private placement on
September 2, 1997 (the "Private Placement"), all of which will occur prior
to completion of this offering. See "Certain Relationships and Related
Party Transactions," "Description of Capital Stock," "Underwriting," and
Note 6 of Notes to Financial Statements included elsewhere herein.

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SUMMARY FINANCIAL DATA

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NINE MONTHS ENDED
YEARS ENDED OCTOBER 31, JULY 31,
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1994(a) 1995 1996 1996 1997
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STATEMENT OF OPERATIONS DATA: (dollars in thousands, except per share amounts)
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Revenues ........................................ $ 599 $ 3,350 $ 5,364 $ 3,545 $ 8,892
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Gross profit .................................... 346 2,638 3,749 2,398 6,647
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Income (loss) from operations ................... (117) 1,064 1,639 916 3,932
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Income (loss) before provision for income taxes.. (175) 870 1,364 715 3,571
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Net income (loss) ............................... (175) 592 805 422 2,155
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Fully diluted net income (loss) per share(b)..... $ (.13) $ .10 $ .11 $ .06 $ .32
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Shares used in the calculation of fully
diluted net income (loss) per share(b) (000s).... 2,283 7,115 7,889 7,806 7,091
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Supplementary fully diluted
net income per share(b) ....................... $ .12 $ .32
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SELECTED OTHER DATA:
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Fixed-base units in operation (end of period).... 545 1,250 2,644 1,704 3,944
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Hand-held units in operation (end of period)..... - - 710 790 2,003
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Number of customer locations (end of period)..... 14 30 70 42 123
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Capital expenditures ............................ $ 462 $1,251 $2,966 $2,030 $3,580
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Depreciation and amortization.................... 63 282 599 396 979
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July 31, 1997
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Actual Pro Forma
As Adjusted(c)
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BALANCE SHEET DATA: (in thousands)
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Cash and cash equivalents ........................ $ 215
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Working capital (deficit) ........................ (596)
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Total assets ..................................... 9,922
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Total debt ....................................... 5,823 $5,372.5]
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Total stockholders' equity ....................... 3,267
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(a) Represents the period from inception (April 18, 1994) through October 31,
1994. Operations commenced June 1, 1994.
(b) See Note 1 of Notes to Financial Statements included elsewhere herein for
information concerning the computation of fully diluted and supplementary
fully diluted net income (loss) per share.
(c) Adjusted to reflect the sale by the Company of 3,270,000 shares of Common
Stock in this offering and the application of the estimated net proceeds
therefrom, including the application of $4.3 million of the proceeds for
repayment of indebtedness of the Company. See "Use of Proceeds" and
"Capitalization." Assumes (i) the conversion by certain officers of
convertible subordinated debt (including accrued interest) of $1,475,888 at
July 31, 1997 into 1,475,888 shares of Common Stock, and (ii) the
conversion into 400,000 shares of Common Stock of the Series A Preferred,
all of which will occur prior to completion of this offering. See "Certain
Relationships and Related Party Transactions," "Description of Capital
Stock," "Underwriting," and Note 6 of Notes to Financial Statements
included elsewhere herein.

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RISK FACTORS

IN ADDITION TO THE OTHER INFORMATION IN THIS PROSPECTUS, THE FOLLOWING
FACTORS SHOULD BE CONSIDERED CAREFULLY IN EVALUATING THE COMPANY AND ITS
BUSINESS BEFORE PURCHASING SHARES OF COMMON STOCK.

LIMITED OPERATING HISTORY AND DEPENDENCE ON BINGO AND ELECTRONIC BINGO INDUSTRY

The Company commenced operations in June 1994. Although the Company was
profitable during the fiscal years ended October 31, 1995 and 1996 and the nine
months ended July 31, 1997, future revenues and profits will depend upon
continued market acceptance of the Company's products and services, the
continued penetration of electronic bingo into bingo halls nationwide and
various other factors, many of which are beyond the control of the Company. For
example, while IGRA does not impose limits on prizes that may be offered for
bingo games conducted on Indian lands, in substantially all states where
charitable bingo is legal, the state imposes limits on prizes on a per game, per
session or annual basis. These prize limits for charitable bingo may influence
players to limit their spending, which could eventually restrict the Company's
ability to grow in the charitable bingo market. Other factors beyond the
Company's control include the continued popularity of bingo as a leisure
activity and as a means of charitable fundraising. The bingo industry is a
mature industry and there can be no assurance that it will not decline in the
future due to an increase in competing forms of entertainment including those
resulting from developments in on-line gaming and the continued expansion of the
legalization of casino gaming (for example, riverboat gaming). The Company
faces risks, expenses and difficulties frequently encountered in connection with
the operation and development of a new and rapidly expanding business,
including, but not limited to, fluctuating cash flow and the addition, training
and integration of qualified personnel.

COMPETITION

The electronic bingo industry is characterized by intense competition based
on, among other things, an electronic bingo unit's ability to generate
incremental sales for bingo hall operators through product appeal to players,
ease of use, ease of serviceability, support and training, distribution, name
recognition and price. Certain of the Company's competitors may have
significantly greater financial and technical resources than the Company, as
well as more established customer bases and distribution channels, which may
allow them to move rapidly into the Company's market and acquire significant
market share. Increased competition may result in price reductions, reduced
operating margins, conversion from lease to sale of the Company's units and loss
of market share, any of which could materially and adversely affect the
Company's business, operating results or financial condition. Furthermore, the
Company's success may benefit existing competitors and induce new competitors to
enter the market. The Company has attempted to counter competitive factors by
providing superior service and new, innovative, quality products, but there can
be no assurance that the Company will continue to be a successful competitor in
the electronic bingo industry. In addition, the Company competes with other
similar forms of entertainment including casino gaming and lotteries.

LIMITED PROTECTION OF INTELLECTUAL PROPERTY RIGHTS; RISK OF LITIGATION

The Company regards its products as proprietary and relies primarily on a
combination of trade secret laws and employee and third-party non-disclosure
agreements to protect its proprietary rights. Defense of intellectual property
rights can be difficult and costly and there can be no assurance that the
Company will be able to protect its technology from misappropriation by
competitors. In addition, the protections offered by trademark, copyright and
trade secret laws would not prevent a competitor from designing electronic bingo
systems having appearance and functionality that closely resemble those of the
Company.

As the number of electronic bingo units in the industry increases and the
functionality of these products further overlaps, the Company may become subject
to infringement claims, with or without merit, that are brought by competitors.
Intellectual property-related claims or litigation can be costly and can result
in

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a significant diversion of management's attention. Any settlement of such
claims or adverse determinations in such litigation could also have a material
adverse impact on the Company's business and financial condition.

Patent infringement suits have been filed against the Company by Bingo
Technology Corporation, Inc. (formerly Bingo Card Minder Corp.) and FortuNet,
Inc. The Company believes that its products do not infringe the plaintiffs'
patents and intends to continue to defend against both actions vigorously.
However, both actions are in the early stages of litigation, and there can be
no assurance that favorable outcomes will be obtained or that if either or
both actions are resolved in favor of the plaintiffs, such results would not
have a material adverse effect on the Company. See "Business -- Legal
Proceedings."

RISKS ASSOCIATED WITH THE COMPANY'S CONTRACTS

The Company seeks written agreements with its customers. Current written
agreements with its customers generally (i) permit termination by the customers
upon relatively short notice; (ii) do not designate the Company as the
customer's exclusive electronic bingo system provider; and (iii) do not penalize
customers for early termination. In addition, approximately 5% of the Company's
contracts are oral. To date, none of the foregoing has had a material adverse
effect on the Company's business, results of operations or financial condition.

RELIANCE ON TEXAS MARKET

A substantial portion of the Company's revenues come from the Texas market.
The Company began operations in Texas in August 1996, and, as required by state
law, operates through a distributor. For the nine months ended July 31, 1997,
approximately 45% of the Company's revenues were generated in Texas, and of the
approximately 120 bingo halls served by the Company at July 31, 1997, 72 were
located in Texas. The Company's contract with its exclusive distributor is
subject to renewal in December 1998 and may be renewed for an additional year at
the Company's option. Management believes that this contract will be renewed in
due course on substantially similar terms or that, alternatively, the Company
could find another qualified distributor without undue delay or additional
expense. Any change in the regulatory environment that would prevent or impede
the Company from doing business in Texas, or any significant deterioration of
the Texas economy, could have a material adverse effect on the Company's
business.

DEPENDENCE ON KEY PERSONNEL

The operations of the Company depend to a great extent on its ability to
retain and attract existing and new key personnel. Competition is intense for
skilled marketing and product development employees in particular and there can
be no assurance that the Company will be successful in attracting and retaining
such personnel, or that it can avoid increased costs in order to do so. The
Company's success to date has depended in large part on the skills and efforts
of, in particular, its founders. Although management believes replacement
personnel, including persons already employed by the Company, could be found,
the loss of any of the founders, were the Company unable to hire suitable
replacements, or the Company's failure to attract additional qualified
employees, could have a material adverse effect on the Company's operating
results and financial condition. The loss of key personnel or the failure to
attract additional qualified personnel for whatever reason could delay
implementation of the Company's business plans. See "Management."

MANAGEMENT OF GROWTH

The Company's growth plans will require full use of the Company's current
financial, managerial and other resources as well as substantial expansion of
those resources. The Company's ability to manage its growth effectively will
require it to continue to improve its operational, financial and management
information systems and to attract, motivate and train key employees. The
Company plans to expand within its existing domestic markets and into foreign
and domestic bingo markets in which it has no previous operating experience.
There can be no

7
<PAGE>
assurance that the Company will be able to maintain profitability or
successfully manage the aggressive expansion of its existing and planned
business. If the Company's management is unable to manage growth effectively,
the Company's business, operating results and financial condition would be
materially and adversely affected.

REGULATORY RISKS

The Company must maintain its existing licenses and approvals necessary to
operate in its existing markets and obtain the necessary licenses, approvals,
findings of suitability and product approvals in all additional jurisdictions in
which it intends to distribute its products. The licensing and approval
processes can involve extensive investigation into the Company and its officers,
directors, principal stockholders and products, and can require significant
expenditures of time and resources by the Company. The Company must comply with
applicable regulations for its activities in any international jurisdictions
into which it expands. There can be no assurance that the Company will receive
licensing approval in the jurisdictions in which it is currently seeking such
approval. The regulations relating to company and product licensing are subject
to change and other jurisdictions, including the federal government, may elect
to regulate or tax bingo. The Company cannot predict the nature of any such
changes or their impact on the Company. The loss of a license in a particular
state will prohibit the Company from realizing revenues in that state and may
prohibit the Company from installing its units in other states. The loss of one
or more licenses held by the Company could have an adverse effect on the
Company's business. See "Business -- Government Regulation."

DEPENDENCE ON SINGLE-SOURCE SUPPLIER FOR HAND-HELD UNITS

The Company currently obtains its hand-held units from Tidalpower
Technologies Inc. ("Tidalpower"), a contract manufacturer in Taiwan. The
Company does not have long-term supply contracts with Tidalpower, but rather
obtains hand-held units on a purchase order basis. Although the design of
hand-held units is not unique or proprietary, if Tidalpower ceased doing
business with the Company, the Company would need to find a replacement
supplier. Tidalpower has been named as a defendant in an action by Apex
Wholesale, Inc. and injunctive relief is sought against Tidalpower in this
action. See "Business--Legal Proceedings." The Company believes the
availability of suppliers is such that a capable replacement for Tidalpower
could be found, but not without some risk of delay, and there can be no
assurance that the Company would be able to procure, substitute or produce
its hand-held units without a significant interruption or a price increase.
Any failure or delay in receiving hand-held units could have a material adverse
effect on the Company's business, financial condition and results of operation.

PROTECTION OF LAW

The Company's units are operated in many bingo halls located on Indian
reservations in the United States. State and federal laws governing the
business or other conduct of private citizens generally do not apply to bingo
halls that operate on Indian reservations. The Company would therefore have
little or no legal recourse if an Indian tribe operating a particular bingo hall
seized the units or barred entry onto the reservation in the event of a contract
or other dispute. The Company has the capability to render any units inoperable
in the event of such action. However, any seizure of the Company's units is
likely to result in a capital loss and loss of revenue to the Company and could,
were it to occur on a large scale, have a materially adverse effect on the
Company's capital resources.

OPERATIONS ON INDIAN LAND; IGRA

The Company's operations in Indian gaming halls are subject to tribal and
federal regulation under IGRA, which established the National Indian Gaming
Commission (the "NIGC"). The NIGC has the authority to promulgate rules and
regulations to enforce certain aspects of IGRA and to protect tribal interests.
Under IGRA, electronic bingo games similar to the Company's have previously been
determined by the NIGC to be Class II gaming activities which are subject solely
to tribal regulation as approved by the NIGC. See "-- Protection of Law" and
"Business -- Government Regulation -- Indian Gaming." The Company believes its
electronic bingo systems and TSBN meet all of the requirements of a Class II
game and that the NIGC has the regulatory authority to make final and binding
determinations on the classification of the Company's electronic bingo systems
and TSBN. There can be no assurance that the NIGC would classify the Company's
electronic bingo systems and TSBN as Class II

8
<PAGE>

games under IGRA. There can be no assurance that the NIGC would not enact
future regulations or reinterpret existing regulations in such a manner so as
to limit the authority of tribes to self-regulate Class II gaming or to
change the definition of Class II gaming in such a manner that the Company's
electronic bingo systems or TSBN are classified as a Class III game under
IGRA. If classified as Class III games, the Company's electronic bingo
systems or TSBN would become subject to state regulation through the
tribal-state compacts required for Class III games played on Indian lands.
See "Business -- Government Regulation -- Indian Gaming." In that event, or
in the event other federal laws are enacted that would subect the Company's
operations on Indian lands to state regulation there can be no assurance the
Company could modify its electronic bingo systems or TSBN so that they could
be classified as Class II games, or that the Company could gain the necessary
state approval and licenses to continue its operations in Indian gaming halls
and such an event could have a material adverse effect on the Company. Any
modification of the Company's electronic bingo systems or TSBN would also
have the additional risk that such modifications would not appeal to
customers or be acceptable to the Indian tribes.

IGRA was adopted in 1988 and the interaction and development of federal,
state, and tribal regulation of Indian gaming is continuing to evolve. The
Company participates in an industry characterized by rapid technological
advances and, due to the lack of case law and interpretation of regulations
regarding issues relating, for example, to the use of technological aids such
as the Company's electronic bingo systems, there may be insufficient
historical precedent to enable the Company to predict with certainty the
response of regulatory authorities to planned activities.

CHANGING TECHNOLOGY

The Company's products utilize hardware components that have been developed
primarily for the personal computer industry, which is characterized by rapid
technological change and product enhancements. Should any current or potential
competitor of the Company succeed in developing a better electronic bingo
system, such competitor could be in a position to outperform the Company in its
ability to exploit developments in microprocessor, video technology or other
multimedia technology. The emergence of an electronic bingo system that is
superior to the Company's in any respect could substantially diminish the
Company's revenues and limit the Company's ability to grow and thereby have a
material adverse effect on the Company's operating results.

SUBSTANTIAL PORTION OF NET PROCEEDS ALLOCATED FOR GENERAL PURPOSES

Substantially all of the net proceeds to the Company from this offering
have been allocated to working capital to fund future development and expansion
activities and other general corporate purposes. Subject to the foregoing, the
net proceeds may be spent at the discretion of the Company's board of directors
(the "Board of Directors"). As a result, investors may not know in advance how
such net proceeds will be used by the Company. See "Use of Proceeds."

CONTROL BY PRINCIPAL STOCKHOLDERS; ANTI-TAKEOVER PROVISIONS

Upon closing of this offering (assumed to be October 31, 1997),
management will beneficially own 52.3% of the outstanding Common Stock (49.0%
if the Underwriters' over-allotment option is exercised in full). As a
result, management will continue to have the ability to control the Company
and direct its affairs and business. Such concentration of ownership, as
well as certain provisions of the Company's Certificate of Incorporation, as
amended (the "Certificate of Incorporation") and the Delaware General
Corporation Law (the "DGCL"), could have the effect of delaying or preventing
a change in control of the Company. These provisions include the classified
structure of the Company's Board of Directors and the Company's ability to
issue "blank check" preferred stock. In addition, such concentration of
ownership and such provisions may adversely affect the ability of
stockholders to realize a premium on the sale of their shares of Common Stock
in a takeover of the Company. See "Description of Capital Stock."

<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

Upon closing of this offering, the Company will have 9,595,713 shares of
Common Stock outstanding, excluding shares of Common Stock issuable upon
exercise of options under the Company's Incentive Stock Plan (the "Stock Option
Plan") or otherwise. All of the shares of Common Stock to be sold in this
offering will be eligible for immediate sale in the public market without
restriction unless acquired by affiliates of the Company. Of the remaining
5,885,713 shares of Common Stock outstanding, 2,089,125 shares will be
available for resale beginning 180 days after the date of this Prospectus upon
expiration of the applicable lock-up agreements described below and, unless
registered, subject to compliance with Rule 144 under the Securities Act ("Rule
144"), 2,320,700 shares not subject to the lock-up agreements will be eligible
for sale under Rule 144 upon completion of this offering, and the rest of the
shares will, unless registered, become eligible for sale under Rule 144 at
various dates as the holding period provisions of Rule 144 are satisfied. See
"Shares Eligible for Future Sale."

Sales of substantial amounts of Common Stock, or the perception that such
sales could occur, could adversely affect prevailing market prices of the Common
Stock. The Company, the Selling Stockholders and the directors and executive
officers of the Company have agreed not to offer, pledge, sell an option or
contract to purchase, purchase an option or contract to sell, sell, contract to
sell, grant any option, right or warrant to purchase, or otherwise transfer or
dispose of, directly or indirectly, any shares of Common Stock or any securities
convertible into or exchangeable for Common Stock, or enter into any swap or
other arrangement that in any manner transfers all or a portion of the economic
consequences associated with the ownership of such Common Stock, or to cause a
registration statement covering any shares of Common Stock to be filed, for 180
days after the date of this Prospectus without the prior written consent of
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"), provided that the
Company may grant options pursuant to the Stock Option Plan, and issue shares of
Common Stock upon the exercise of outstanding options. See "Underwriting."

NO PRIOR PUBLIC MARKET

Prior to this offering, there has been no public market for the Company's
Common Stock. There can be no assurance that an active public market for the
Common Stock will develop or be sustained after this offering. The initial
public offering price of the Common Stock will be determined by negotiation
between the Company and the representatives of the Underwriters based on the
factors described under "Underwriting." The price at which the Common Stock will
trade in the public market after this offering may be less than the initial
public offering price. See "Underwriting."

ABSENCE OF DIVIDENDS

The Company has not paid or declared any cash dividends to date and does
not anticipate paying any cash dividends on its Common Stock in the foreseeable
future. Covenants under the Company's $3 million term loan (the "Term Loan"),
which will be repaid with proceeds from this offering, and $3 million revolving
line of credit (the "Revolving Credit Facility"), both with Wells Fargo Bank,
N.A. ("Wells Fargo") restrict payment of dividends without the prior consent of
Wells Fargo. See "Dividend Policy."

DILUTION TO NEW INVESTORS

Purchasers of Common Stock in this offering will experience immediate and
substantial dilution in the amount of $ per share in pro forma net tangible
book value per share (based upon the assumed initial public offering price of $
per share). See "Dilution."

FORWARD-LOOKING STATEMENTS

This Prospectus contains forward-looking statements that can be
identified by the use of forward-looking terminology such as "may," "will,"
"should," "expect," "anticipate," "estimate" or "continue" or the negative
thereof or other variations thereon or comparable terminology. The matters
set forth under "Risk Factors" constitute cautionary statements identifying
important factors with respect to such forward-looking statements, including
certain risks and uncertainties that could cause actual results to differ
materially from those in such forward-looking statements.

10
<PAGE>

USE OF PROCEEDS

The net proceeds to the Company from the sale of 3,270,000 shares of Common
Stock offered hereby by the Company, after deducting the underwriting discounts
and commissions and estimated offering expenses payable by the Company, are
estimated to be $ million ($ million if the Underwriters' over-allotment
option is exercised in full). The Company will not receive any proceeds from
the sale of shares of Common Stock by the Selling Stockholders. See "Principal
and Selling Stockholders."

The principal reasons for this offering are to fund the uses outlined
below, to fund future growth, to provide capital for acquisitions and
liquidity and to create a public market for the Company's shares.
Approximately $4.3 million of the net proceeds of this offering are allocated
to repay substantially all of the Company's outstanding indebtedness (which
had varying interest rates at July 31, 1997 not exceeding 9% per annum and
maturing not later than April 11, 2000) and to fund the Company's growth
plans, which include approximately $8.0 million for capital expenditures and
approximately $2.0 million for research and development, the purchase of
additional fixed-base and hand-held bingo units to be installed at existing
and new customers' bingo halls, expanding the Company's operations into new
markets, increasing research and development, launching TSBN and for other
general corporate purposes. The proceeds of the indebtedness which is being
repaid were primarily used to refinance the Company's previously outstanding
line of credit and for operating needs, including payments of estimated
income tax. The use of unallocated net proceeds will be at the discretion of
the Board of Directors. See "Risk Factors -- Substantial Portion of Net
Proceeds Allocated for General Purposes." The Company will be able to borrow
up to $3 million under the Revolving Credit Facility upon completion of this
offering. A portion of the proceeds may also be used to acquire or invest in
complementary businesses, products, joint ventures, or the right to obtain
the use of complementary technologies. To date, the Company has not entered
into any definitive agreements, commitments or understandings with respect to
any acquisitions. Pending such uses, the Company plans to invest the net
proceeds in short-term investment grade, interest bearing securities.

DIVIDEND POLICY

The Company has paid no cash dividends to date and does not anticipate
paying any cash dividends on its Common Stock in the foreseeable future. The
Company intends to retain its earnings, if any, to finance the expansion of its
business and for other general corporate purposes. Any payment of future
dividends will be at the discretion of the Board of Directors and will depend
upon, among other factors, the Company's earnings, financial condition, capital
requirements, level of indebtedness, contractual restrictions with respect to
the payment of dividends and other considerations that the Board of Directors
deems relevant. The Revolving Credit Facility restricts payment of cash
dividends without the prior consent of Wells Fargo. See "Risk Factors --
Absence of Dividends."

11
<PAGE>

CAPITALIZATION

The following table sets forth the capitalization of the Company at July
31, 1997, on (i) a historical basis, (ii) a pro forma basis to give effect to
the sale of 400,000 shares of Series A Preferred issued on September 2, 1997 and
conversion thereof into 400,000 shares of Common Stock and the conversion by
certain stockholders of convertible subordinated debt (including accrued
interest) of $1,475,888 at July 31, 1997 into 1,475,888 shares of Common Stock
and (iii) a pro forma as adjusted basis to give effect to the sale by the
Company of 3,270,000 shares of Common Stock offered hereby and the application
of the estimated net proceeds therefrom. The capitalization of the Company
should be read in conjunction with "Use of Proceeds," "Management's Discussion
and Analysis of Financial Condition and Results of Operations," and the
Financial Statements and Notes thereto included elsewhere in this Prospectus.

JULY 31, 1997
--------------------------------------------
ACTUAL PRO FORMA PRO FORMA
AS ADJUSTED
-------------- -------------- -------------
(dollars in thousands, except per share amounts)

<S> <C> <C> <C>
CASH AND CASH EQUIVALENTS . . . . . . . . . . . . $ 215 $ 3,050 $
--------- ----------- --------
--------- ----------- --------

DEBT:
Convertible notes payable to officers
(including accrued interest). . . . . . . . . $1,478 $ - $
Other short-term and long-term debt. . . . . . . $4,347 4,347
----------- ---------
TOTAL DEBT(a) . . . . . . . . . . . . . . 5,823 4,347
----------- ---------
STOCKHOLDERS' EQUITY:(b)
Preferred stock, undesignated, par value $.001
per share; 5,000,000 shares authorized, no
shares issued and outstanding. . . . . . . . . - -
Common stock, par value $.001 per share;
40,000,000 shares authorized; 4,449,825
shares issued and outstanding, actual;
6,325,713 pro forma; and 9,595,713 pro
forma as adjusted. . . . . . . . . . . . . . . 4 6
Capital in excess of par value . . . . . . . . . 34 4,343
Retained earnings . . . . . . . . . . . . . . . 3,229 3,229
--------- ----------- --------
TOTAL STOCKHOLDERS' EQUITY. . . . . . . . . . . . 3,267 7,578
--------- ----------- --------
TOTAL CAPITALIZATION. . . . . . . . . . . . . . . $ 9,090 $ 11,925 $
--------- ----------- --------
--------- ----------- --------

</TABLE>

- ---------

(a) The Company's $3 million Revolving Credit Facility will remain available
for reborrowing after completion of this offering. See "Use of Proceeds."

(b) An amendment to the Certification of Incoporation was filed on August 25,
1997. Prior to such amendment, the Company had 15,000,000 shares of Common
Stock unauthorized and 4,414,075 shares issued and outstanding, and no
shares of preferred stock were authorized or issued and outstanding.

12
<PAGE>

DILUTION

At July 31, 1997, the Company had a pro forma net tangible book value of
$7.2 million, or $.98 per share of Common Stock based upon 7,358,463 shares of
Common Stock outstanding. Pro forma net tangible book value per share is
determined by dividing the pro forma net tangible book value of the Company
(total tangible assets less total liabilities) by the number of shares of Common
Stock outstanding(a) at such date. After giving effect to the sale by the
Company of 3,270,000 shares of Common Stock offered by the Company hereby at an
assumed initial public offering price of $ per share and application of the
net proceeds therefrom, the pro forma net tangible book value of the Company, as
adjusted, at July 31, 1997 would have been $ million or $ per share of
Common Stock. This represents an immediate dilution to new investors of $
per share and an immediate increase in pro forma as adjusted net tangible book
value per share to existing stockholders of $ per share. The following
table illustrates the per share dilution to the new investors:

<S> <C> <C>
Assumed initial public offering price per share. . . . . . . . . . . . . . . . . . . $
Pro forma net tangible book value per share at July 31, 1997 . . . . . . . . . . . . $.98
Increase in net tangible book value per share attributable to new investors. . . . .
Pro forma as adjusted net tangible book value per share after giving effect to this
offering. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dilution per share to new investors. . . . . . . . . . . . . . . . . . . . . . . . . $

</TABLE>

The following table sets forth at July 31, 1997, the relevant investments
of the existing stockholders and of the new investors, giving effect to the sale
by the Company of 3,270,000 shares and the sale by the Selling Stockholders of
440,000 shares of Common Stock being offered hereby, at an assumed public
offering price of $ per share and, prior to completion of this offering, the
conversion by certain officers of convertible subordinated debt (including
accrued interest) of $1,475,888 at July 31, 1997 into 1,475,888 shares of Common
Stock, and the conversion into 400,000 shares of Common Stock of the Series A
Preferred.

SHARES PURCHASED TOTAL CONSIDERATION AVERAGE PRICE
------------------------ ---------------------- -------------
NUMBER PERCENTAGE AMOUNT PERCENTAGE PER SHARE
------ ---------- ------ ---------- -------------
<S> <C> <C> <C> <C> <C>
Existing stockholders 5,885,713 61.3% $ % $ .
New investors 3,710,000 38.7% $
Total 9,595,713 100.0% $ % $
--------- ----- ------ -------
--------- ----- ------ -------

</TABLE>

The foregoing table assumes no exercise of options and excludes options to
purchase 1,619,050 shares of Common Stock, outstanding as of July 31, 1997, of
which 1,032,750 options are currently exercisable. See "Management -- Stock
Option Plan" and Note 6 of Notes to Financial Statements included elsewhere
herein.

- ---------------------
(a) Assumes (i) the conversion by certain officers of convertible subordinated
debt (including accrued interest) of $1,475,888 at July 31, 1997 into
1,475,888 shares of Common Stock, (ii) issuance of 1,032,750 shares of
Common Stock from currently excisable stock otions, and (iii) the
conversion into 400,000 shares of Common Stock of the Series A Preferred,
all of which will occur prior to completion of this offering. The
conversion of convertible notes payable to offices and Series A Preferred
into common stock will occur prior to completion of this offering. In
addition, none of the $586,300 of options unexercisable as of July 31, 1997,
were included in the calculation of pro forma common stock outstanding
sicne they will not become exercisable within the next 60 days.

13
<PAGE>

SELECTED FINANCIAL DATA

The selected statement of operations data for the period from inception
(April 18, 1994) through October 31, 1994 and for the years ended October 31,
1995 and 1996 and the nine months ended July 31, 1997 and the selected balance
sheet data set forth below at October 31, 1995 and 1996 and July 31, 1997 have
been derived from the Company's financial statements, which have been audited by
Ernst & Young LLP, independent auditors, and are included elsewhere herein. The
selected balance sheet data set forth below at October 31, 1994 has been derived
from the Company's audited financial statements not included herein. The
selected statement of operations data set forth below for the nine months ended
July 31, 1996 have been derived from the Company's unaudited financial
statements which are included elsewhere herein. The unaudited financial
statements have been prepared by the Company on a basis consistent with the
Company's audited financial statements and, in the opinion of management,
include all adjustments, consisting of only normal recurring adjustments,
necessary for a fair presentation of the Company's results of operations and
financial condition for such periods. Operating results for the nine months
ended July 31, 1997 are not necessarily indicative of results that may be
expected for the entire year ending October 31, 1997. The selected financial
data set forth below should be read in conjunction with the Financial Statements
and Notes thereto and with "Management's Discussion and Analysis of Financial
Condition and Results of Operations."

NINE MONTHS ENDED
YEARS ENDED OCTOBER 31, JULY 31,
-----------------------------------------------------------------
1994(a) 1995 1996 1996 1997
------- ---- ---- ---- ----
(dollars in thousands, except per share amounts)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues. . . . . . . . . . . . . . . . . . . . . $ 599 $3,350 $ 5,364 $ 3,545 $8,892
Cost of revenues . . . . . . . . . . . . . . . . 253 712 1,615 1,147 2,245
------- ------ ------- ------ ------
Gross profit. . . . . . . . . . . . . . . . . . . 346 2,638 3,749 2,398 6,647
------- ------ ------- ------ ------
Operating expenses:
General and administrative . . . . . . . . . . 220 693 1,020 717 1,348
Sales and marketing. . . . . . . . . . . . . . 149 552 613 425 982
Research and development. . . . . . . . . . . . 94 329 477 340 385
------- ------ ------- ------ ------
Total operating expenses. . . . . . . . . . . 463 1,574 2,110 1,482 2,715
------- ------ ------- ------ ------
Income (loss) from operations . . . . . . . . . . (117) 1,064 1,639 916 3,932
Interest expense and other. . . . . . . . . . . . (58) (194) (275) (201) (361)
Income (loss) before provision for income . . . . (175) 870 1,364 715 3,571
taxes
Provision for income taxes. . . . . . . . . . . . -- 278 559 293 1,416
------- ------ ------- ------ ------
Net income (loss) . . . . . . . . . . . . . . . . $ (175) $ 592 $ 805 $ 422 $2,155
------- ------ ------- ------ ------
------- ------ ------- ------ ------

Fully diluted net income (loss) per share(b). . . $ (.13) $ .10 $ .11 .06 $ .32
Shares used in the calculation of fully diluted
net income (loss) per share(b) (000s). . . . . . 2,283 7,115 7,889 7,806 7,091

Supplementary fully diluted
net income per share(b) . . . . . . . . . . . . $ .12 $ .32 $ $ .32

SELECTED OTHER DATA:. . . . . . . . . . . . . . .
Fixed-based units in operation (end of
period). . . . . . . . . . . . . . . . . . . . . 545 1,250 2,644 1,704 3,944
Hand-held units in operation (end of
period). . . . . . . . . . . . . . . . . . . . . - - 710 790 2,003
Number of customer locations (end of
period). . . . . . . . . . . . . . . . . . . . . 14 30 70 42 123
Capital expenditures. . . . . . . . . . . . . . . $ 462 $1,251 $ 2,966 $2,030 $3,580
Depreciation and amortization . . . . . . . . . . 63 282 599 396 979

</TABLE>

OCTOBER 31,
----------------------------------------------
1994 1995 1996 JULY 31, 1997
------ ------ ------ -------------
(dollars in thousands)
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents . . . . $ 25 $ 37 $ 166 $ 215
Working capital (deficit) . . . . 76 (37) (1,385) (596)
Total assets. . . . . . . . . . 1,330 2,783 5,710 9,922
Total debt(c) . . . . . . . . . 1,464 1,306 3,398 5,823
Total stockholders' equity
(deficit). . . . . . . . (175) 980 1,785 3,267

</TABLE>

- ------------------------------

(a) Represents the period from inception (April 18, 1994) through October 31,
1994. Operations commenced June 1, 1994.

(b) See Note 1 of Notes to Financial Statements included elsewhere herein for
information concerning the computation of fully diluted and
supplementary fully diluted net income (loss) per share.

(c) Includes convertible subordinated debt to stockholders (including accrued
interest) of $1,331,283, $1,291,460 and $1,362,662 at October 31, 1994,
1995 and 1996, respectively, and $1,475,888 at July 31, 1997, which will be
converted into 1,475,888 shares of Common Stock prior to completion of this
offering.

14
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the Financial
Statements and Notes thereto included elsewhere in this Prospectus.

OVERVIEW

GameTech has grown rapidly, and management believes that the Company has
had a competitive advantage resulting from the experience of its management and
the value it has provided its customers through a combination of its quality
electronic bingo units and its reputation for superior customer service and
support. The Company's recent growth has been driven by the increase in its
installed base of bingo units primarily resulting from the Company's entry into
the Texas market in August 1996 and introduction of an improved hand-held unit
in April 1997. Through September 30, GameTech added an additional 1,780
hand-held units and 271 fixed base units, bringing its installed base to
approximately 8,000 units.

GameTech generates revenues by installing electronic bingo systems in bingo
halls under revenue sharing agreements, or to a lesser extent, at fixed rates
per bingo session. The Company recognizes revenue as its bingo units are
utilized by players. Revenue growth is affected by player acceptance of
electronic bingo as an alternative to paper bingo and the Company's ability to
expand operations into new markets. Fixed-base bingo units generate greater
revenue per unit than hand-held bingo units, but also require greater initial
capital investment.

The Company installs its electronic bingo systems at no charge to its
customers and capitalizes the costs. During fiscal 1995, fiscal 1996 and the
nine months ended July 31, 1997, the Company's capital expenditures were
approximately $1.3 million, $3.0 million and $3.6 million, respectively, almost
all of which represented investments in bingo equipment. The Company's cost of
revenues consists primarily of the expense of providing customer service,
including labor, service-related overhead and depreciation of the bingo systems
installed at customer locations. The Company records depreciation over a
five-year estimated useful life using the straight line method of depreciation.

TSBN, the Company's 50%-owned joint venture, is anticipated to be launched
in early 1998. TSBN is accounted for under the equity method on the Company's
financial statements. If the Company pursues and executes strategic
opportunities such as the all-electronic bingo halls discussed under
"Business--Products" and "--Sales, Marketing and Distribution," its operating
results and margins will, to varying degrees, begin to be affected by the
Company's status as an owner and operator of such ventures. To the extent any
such ventures become material to the Company, its financial results will
accordingly reflect the different accounting methods to recognize revenue from,
and fund the expenses of, these operations.

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, certain
statement of operations data for the Company expressed as a percentage of
revenues.

NINE MONTHS ENDED
YEARS ENDED OCTOBER 31, JULY 31,
1994(A) 1995 1996 1996 1997
------- ---- ----- ---- ----
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues . . . . . . . . . . . . . . . . . . . . . 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of revenues . . . . . . . . . . . . . . . . . 42.3 21.2 30.1 32.3 25.2
------ ------ ------ ------ ------
Gross profit . . . . . . . . . . . . . . . . . . . 57.7 78.8 69.9 67.7 74.8
------ ------ ------ ------ ------

</TABLE>

15
<PAGE>

NINE MONTHS ENDED
YEARS ENDED OCTOBER 31, JULY 31,
------------------------------ -------------------
<S> <C> <C> <C> <C> <C>
Operating expenses:
General and administrative . . . . . . . . . . . 36.8 20.7 19.0 20.2 15.2
Sales and marketing. . . . . . . . . . . . . . . 24.8 16.5 11.5 12.0 11.1
Research and development . . . . . . . . . . . . 15.7 9.8 8.9 9.6 4.3
------- ------ ------ ------ ------
Total operating expenses . . . . . . . . . . . . . . 77.3 47.0 39.4 41.8 30.6
Income (loss) from operations. . . . . . . . . . . . (19.6) 31.8 30.5 25.9 44.2
Interest expense and other . . . . . . . . . . . . . (9.7) (5.8) (5.1) (5.7) (4.1)
------- ------ ------ ------ ------
Income (loss) before income taxes. . . . . . . . . . (29.3) 26.0 25.4 20.2 0.1
Provision for income taxes . . . . . . . . . . . . . 0.0 8.3 10.4 8.3 15.9
------- ------ ------ ------ ------
Net income (loss). . . . . . . . . . . . . . . . . . (29.3)% 17.7% 15.0% 11.9% 24.2%
------- ------ ------ ------ ------
------- ------ ------ ------ ------

</TABLE>

- --------------
(a) Represents the period from inception (April 18, 1994) through October
31, 1994. Actual operations began June 1, 1994.

NINE MONTHS ENDED JULY 31, 1997 COMPARED TO NINE MONTHS ENDED JULY 31, 1996

REVENUES. Revenues increased $5.4 million, or 151%, to $8.9 million for
the nine months ended July 31, 1997 from $3.5 million for the nine months ended
July 31, 1996. The increase in revenues was primarily due to a 161% increase in
the average number of units installed to 4,386 during the nine months ended July
31, 1997 from 1,680 during the nine months ended July 31, 1996, partially offset
by a slight decrease in average revenues per unit. Expansion into Texas
accounted for $4.0 million of the revenue increase during the nine months ended
July 31, 1997.

COST OF REVENUES. Cost of revenues increased $1.1 million, or 95.7%, to
$2.2 million for the nine months ended July 31, 1997, from $1.1 million for the
nine months ended July 31, 1996. The increase in cost of revenues was primarily
due to the greater average number of units installed. As a percentage of
revenues, cost of revenues decreased to 25.2% from 32.3% in the prior period.
The decrease was a result of higher utilization of field service personnel and
increased revenues, together with start-up costs, $101,000, for the expansion
into Texas during the nine months ended July 31, 1996, which were not
immediately offset by increased revenues. The components of the $101,000 in
start-up costs consisted of $42,000 of personnel-related costs and $59,000 in
overhead costs.

GENERAL AND ADMINISTRATIVE. General and administrative expenses increased
$631,000, or 88.0%, to $1.3 million for the nine months ended July 31, 1997 from
$717,000 for the nine months ended July 31, 1996. The significant components of
the $631,000 increase consist of the following items and increased amounts:
higher payroll resulting from hiring four additional personnel to help manage
the Company's growth, $135,000; increased professional services, $122,000; and
larger provisions for bonuses, $120,000, profit sharing, $67,000, and bad debts,
$67,000. As a percentage of revenues, general and administrative expenses
decreased to 15.2% from 20.2% in the prior period primarily due to the increase
in revenues and operating leverage in the Company's operations.

SALES AND MARKETING. Sales and marketing expenses increased $557,000, or
131%, to $982,000 for the nine months ended July 31, 1997 from $425,000 for the
nine months ended July 31, 1996. The increase was primarily due to larger
distributor commissions, attributable to the higher level of revenues
in Texas, $398,000, and hiring an additional salesperson, $103,000. As a
percentage of revenues, sales and marketing expenses decreased to

16
<PAGE>

11.1% from 12.0% in the prior period primarily due to the increase in revenues
and operating leverage in the Company's operations.

RESEARCH AND DEVELOPMENT. Research and development expenses increased
$45,000, or 13.3% to $385,000 for the nine months ended July 31, 1997 from
$340,000 for the nine months ended July 31, 1996. As a percentage of revenues,
research and development expenses decreased to 4.3% from 9.6% in the prior
period.

INTEREST EXPENSE AND OTHER. Interest expense and other increased $160,000,
or 79.5%, to $361,000 for the nine months ended July 31, 1997 from $201,000 for
the nine months ended July 31, 1996. The increase was primarily due to
increased average debt outstanding of $4.8 million for the nine months ended
July 31, 1997 compared to $2.3 million for the nine months ended July 31, 1996,
partially offset by lower interest rates. The increased debt was used to
finance operations.

PROVISION FOR INCOME TAXES. Provision for income taxes increased $1.1
million, or 383%, to $1.4 million for the nine months ended July 31, 1997 from
$293,000 for the nine months ended July 31, 1996 primarily due to an increase in
pre-tax income. The Company's effective income tax rate remained at
approximately 40% in each period.

NET INCOME. As a result of the factors discussed above, net income
increased $1.7 million, or 411%, to $2.2 million for the nine months ended July
31, 1997 from $422,000 for the nine months ended July 31, 1996.

YEAR ENDED OCTOBER 31, 1996 COMPARED TO YEAR ENDED OCTOBER 31, 1995

REVENUES. Revenues increased $2.0 million, or 60.1%, to $5.4 million for
the year ended October 31, 1996 from $3.4 million for the year ended October 31,
1995. The increase in revenues was primarily due to a 126% increase in the
average number of units in service to 1,865 during 1996 from 821 in 1995,
partially offset by a decrease in average revenues per unit resulting from the
increased percentage of hand-held units installed which generate lower average
revenue per unit.

COST OF REVENUES. Cost of revenues increased $903,000, or 127%, to $1.6
million for the year ended October 31, 1996 from $712,000 for the year ended
October 31, 1995. The increase in cost of revenues was primarily due to the
increased number of units installed and start-up costs in Texas. As a
percentage of revenues, cost of revenues increased to 30.1% from 21.2% in the
prior period, primarily due to increased depreciation, $317,000, or 5.9% of
revenue, due to the increased number of installed units and start-up costs
for the expansion into Texas, $203,000, or 3.8%, of revenue, which were not
immediately offset by increased revenues. The components of the $203,000 in
start-up costs consisted of $85,000 of personnel-related costs and $118,000 in
overhead costs.

GENERAL AND ADMINISTRATIVE. General and administrative expenses increased
$327,000, or 47.2%, to $1.0 million for the year ended October 31, 1996 from
$693,000 for the year ended October 31, 1995. The significant components of the
$327,000 increase consist of: increased professional services, $123,000; higher
payroll resulting from hiring one additional person, $31,000; and larger
provisions for bonuses, $51,000, bad debts, $43,000, and profit sharing,
$22,000. As a percentage of revenues, general and administrative expenses
decreased to 19.0% from 20.7% in the prior period primarily due to the increase
in revenues and operating leverage in the Company's operations.

SALES AND MARKETING. Sales and marketing expenses increased $62,000, or
11.2%, to $614,000 for the year ended October 31, 1996 from $552,000 for the
year ended October 31, 1995. The increase was primarily due to hiring an
additional salesperson, $31,000, and a larger amount of distributor commissions,
$23,000, attributable to the higher level of revenues. As a percentage of
revenues, sales and marketing expenses decreased to 11.5% from

17
<PAGE>

16.5% in the prior period primarily due to the increase in revenues and
operating leverage in the Company's operations.

RESEARCH AND DEVELOPMENT. Research and development expenses increased
$148,000, or 45.1%, to $477,000 for the year ended October 31, 1996 from
$329,000 for the year ended October 31, 1995. The increase was primarily due to
additional products under development in 1996 as compared to 1995. As a
percentage of revenues, research and development expenses decreased to 8.9% from
9.8% in the prior period as a result of the increase in revenues.

INTEREST EXPENSE AND OTHER. Interest expense and other increased $81,000,
or 41.9%, to $275,000 for the year ended October 31, 1996 from $194,000 for the
year ended October 31, 1995. The increase was primarily due to the increased
average debt outstanding, of $2.4 million in 1996 compared to $1.4 million in
1995, partially offset by lower interest rates. The increased debt was used to
finance operations.

PROVISION FOR INCOME TAXES. Provision for income taxes increased $281,000,
or 101%, to $559,000 for the year ended October 31, 1996 from $278,000 for the
year ended October 31, 1995 primarily due to an increase in pre-tax income
partially offset by the use of net operating loss carryforwards of approximately
$170,000 utilized in computing the provision for income taxes for 1995.

NET INCOME. As a result of the factors discussed above, net income
increased $213,000, or 35.9%, to $805,000 for the year ended October 31, 1996
from $592,000 in 1995.

YEAR ENDED OCTOBER 31, 1995 COMPARED TO THE PERIOD FROM INCEPTION (APRIL 18,
1994) THROUGH OCTOBER 31, 1994

REVENUES. Revenues increased $2.8 million to $3.4 million for the year
ended October 31, 1995 from $599,000 for the period ended October 31, 1994. The
increase in revenues was primarily due to a full year of operations in 1995
compared to five months of operations in the 1994 period, as well as an increase
in the average number of units installed to 821 during 1995 from 540 during the
1994 period.

COST OF REVENUES. Cost of revenues increased $459,000, to $712,000 for the
year ended October 31, 1995, from $253,000 for the period ended October 31,
1994. The increase in cost of revenues reflects a full year of operations in
1995 compared to five months of operations in the 1994 period, as well as the
greater average number of units installed. As a percentage of revenues, cost of
revenues decreased to 21.2% from 42.3% in the prior period primarily due to the
higher utilization of field service personnel and the increase in revenues.

GENERAL AND ADMINISTRATIVE. General and administrative expenses increased
$473,000 to $693,000 for the year ended October 31, 1995 from $220,000 for the
period ended October 31, 1994. The increase reflects a full year of operations
in 1995 compared to five months of operations in the 1994 period, and increased
costs resulting from an addition to the staff, $15,000; increased professional
services, $15,000; and larger provisions for bonuses, $24,000, and bad debts,
$24,000. As a percentage of revenues, general and administrative expenses
decreased to 20.7% from 36.8% in the prior period primarily due to the increase
in revenues and operating leverage in the Company's operations.

SALES AND MARKETING. Sales and marketing expenses increased $403,000 to
$552,000 for the year ended October 31, 1995 from $149,000 for the period ended
October 31, 1994. The increase reflects a full year of operations in 1995
compared to five months of operations in the 1994 period and higher amounts of
commissions paid to distributors. As a percentage of revenues, sales and
marketing expenses decreased to 16.5% from 24.8% in the prior period primarily
due to the increase in revenues and operating leverage in the Company's
operations.

RESEARCH AND DEVELOPMENT. Research and development expenses increased
$235,000 to $329,000 for the year ended October 31, 1995 from $94,000 for the
period ended October 31, 1994. As a percentage of revenues, research and
development expenses decreased to 9.8% from 15.7% in the prior period reflecting
a full year of

18
<PAGE>

operations in 1995 compared to five months in the 1994 period and hiring of
consultants for new product development.

INTEREST EXPENSE AND OTHER. Interest expense and other increased $136,000
to $194,000 for the year ended October 31, 1995 from $58,000 for the period
ended October 31, 1994. The increase was primarily due to interest expense on
debt outstanding for the full year as compared to partial year, higher average
debt outstanding and higher interest rates.

PROVISION FOR INCOME TAXES. Provision for income taxes was $278,000 for
the year ended October 31, 1995 compared to $0 for the period ended October 31,
1994. In the prior period, the Company had no income tax liability. In 1995,
the Company utilized $170,000 of net operating loss carryforwards.

NET INCOME. As a result of the factors discussed above, net income
increased $767,000 to $592,000 for the year ended October 31, 1995 from a loss
of $175,000 for the period ended October 31, 1994.

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

The Company has primarily used its cash flow to purchase additional bingo
units to install in customers' bingo halls and to meet its ordinary operating
expenses. The principal sources of the Company's liquidity have been cash flow
from operations, borrowings under the Company's Term Loan and Revolving Credit
Facility, the issuance to officers of notes convertible into Common Stock and
sales of Common Stock. In addition, on September 2, 1997, the Company issued
and sold 400,000 shares of Series A Preferred Stock for net proceeds of $2.8
million. GameTech currently has the $3 million Term Loan, which has an interest
rate of 8.9% per annum, and the $3 million Revolving Credit Facility, which has
an interest rate based on the prime rate plus 0.5% or LIBOR plus 2.5%, at the
Company's option; the Revolving Credit Facility expires on April 11, 1998 and
the Term Loan expires on April 11, 2000. The Company intends to repay
borrowings under both the Term Loan and Revolving Credit Facility with a portion
of the net proceeds from this offering. See "Use of Proceeds." The Company
expects to maintain availability under the Revolving Credit Facility and does
not anticipate that it will have difficulty refinancing or replacing the
Revolving Credit Facility should it so desire. Covenants under these credit
facilities restrict payment of cash dividends, and interest to holders of the
convertible notes without prior consent of Wells Fargo.

Operating activities provided $2.3 million of cash in the nine months ended
July 31, 1997 compared to $1.1 million in the nine months ended July 31, 1996.
The increase was primarily due to higher net income, $1.7 million, increased
depreciation and amortization, $584,000, and increased accounts payable,
$272,000, partially offset by increased accounts receivable, $484,000 and higher
deposits for the purchase of new hand-held units, $1.0 million. In 1996,
operating activities provided net cash of $1.3 million as compared to $1.1
million in 1995. The increase was primarily due to higher net income and
depreciation and amortization, $317,000, partially offset by increased accounts
receivable, $124,000, and lower accounts payable, $493,000.

Investing activities used $3.8 million of cash in the nine months ended
July 31, 1997 compared to a use of $2.1 million of cash in the nine months ended
July 31, 1996. The increase was primarily due to a $1.6 million increase in
capital expenditures for bingo units and other fixed assets and investment in
and advances to a joint venture, $171,000. In 1996, investing activities used
cash of $3.1 million as compared to $1.3 million in 1995. The increase was
primarily due to a $1.7 million increase in capital expenditures for bingo units
and other fixed assets.

Financing activities provided cash of $1.6 million in the nine months
ended July 31, 1997 compared to $1.0 million in the nine months ended July
31, 1996. The increase resulted primarily from net proceeds of short-term and
long-term bank borrowings of $1.2 million partially offset by the repurchase
of common stock, $250,000, and payments on long-term debt of $378,000. The
stock was repurchased pursuant to a stock repurchase agreement, entered into
with a former officer of the Company, to repurchase 1,000,000 shares of
Common Stock and repay a note and accrued interest of approximately $168,000
for $875,000. The Company issued a note in the principal amount of $625,000
as part payment for the repurchase of the shares of Common Stock and paid the
balance of $250,000 in cash. The note bears interest at 5.65% and is payable
in four semi-annual installments of $156,250 plus interest. See Note 6 of
Notes to Financial Statements included elsewhere herein. In 1996, financing
activities provided cash of $1.9 million as compared to $209,000 in 1995.
The increase was primarily due to a net $1.9 million increase in short-term
borrowings, partially offset by a reduction in the amount of convertible
notes issued to stockholders, $240,000.

The Company believes that cash flow from operations and the net proceeds to
the Company from this offering, together with funds available under the
Revolving Credit Facility, will be sufficient to support its operations and
provide for budgeted capital expenditures of approximately $8.0 million and
liquidity requirements

<PAGE>

through fiscal 1998. However, the Company's long term liquidity requirements
will depend on many factors, including, but not limited to the rate at which
the Company expands its business, whether internally or through acquisitions
and strategic alliances. In addition, strategic opportunities the Company
may pursue, including without limitation TSBN, will require it to fund its
portion of operating expenses of such ventures, and may further require it to
advance additional amounts should any partners in such ventures be unable to
meet unanticipated capital calls or similar funding events. To date, the
Company has funded the operating losses of TSBN and consequently for
financial reporting purposes will record 100% of TSBN's future operating
losses, if any. To the extent that the funds generated from the sources
described above are insufficient to fund the Company's activities in the long
term, the Company will be required to raise additional funds through public
or private financings. No assurance can be given that additional financing
will be available or that, if it is available, it will be on terms acceptable
to the Company.

QUARTERLY RESULTS

The following table sets forth certain quarterly unaudited statement of
operations data for the quarters in the year ended October 31, 1996 and in the
nine months ended July 31, 1997. The quarterly information has been prepared on
the same basis as the annual information and, in management's opinion, includes
all adjustments necessary to present fairly the information for the quarters
presented.

1996 QUARTERS ENDED 1997 QUARTERS ENDED
----------------------------------------------------- ------------------------------------------
(DOLLARS IN THOUSANDS)
JANUARY 31 APRIL 30 JULY 31 OCTOBER 31 JANUARY 31 APRIL 30 JULY 31

<S> <C> <C> <C> <C> <C> <C> <C>
Revenues $963 $ 1,142 $ 1,440 $ 1,819 $ 2,487 $ 2,998 $3,407

Gross profit 629 780 989 1,351 1,879 2,295 2,473

Income from operations 196 260 461 722 1,148 1,357 1,427

Net income 75 117 230 383 632 758 765

</TABLE>

The following table sets forth certain unaudited statement of operations
data for the quarters in the year ended October 31, 1996 and in the nine months
ended July 31, 1997, expressed as a percentage of revenues.

1996 QUARTERS ENDED 1997 QUARTERS ENDED
--------------------------------------- ---------------------------------------------------------
JANUARY 31 APRIL 30 JULY 31 OCTOBER 31 JANUARY 31 APRIL 30 JULY 31

<S> <C> <C> <C> <C> <C> <C> <C>
Revenues 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Gross profit 65.3 68.4 68.6 74.3 75.6 76.5 72.6

Income from operations 20.3 22.8 32.0 39.7 46.1 45.3 41.9

Net income 7.8 10.3 16.0 21.0 25.4 25.3 22.5

</TABLE>

The Company's revenues, gross profit, income from operations and net income
have grown in each quarter presented, principally as a result of the increase in
its installed base of bingo units in each quarter. The Company anticipates
variations in the rate of growth of revenues as a result of a number of factors,
many of which are outside the Company's control, including competition,
regulatory changes permitting electronic bingo in new markets, licensing
approval in new markets and the introduction of new products.

21
<PAGE>

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In 1995, the Financial Accounting Standards Board (the "FASB") issued
Statement of Financial Accounting Standard No. 123 (SFAS 123), ACCOUNTING FOR
STOCK BASED COMPENSATION. SFAS 123 provides an alternative to Accounting
Principles Board's Opinion No. 25 (APB 25) and is effective for fiscal years
beginning after December 15, 1995. The Company expects to continue to account
for its stock options in accordance with APB 25. SFAS 123 is not expected to
have a material impact on the Company's financial position or results of
operations.

In February 1997, the FASB issued Statement No. 128, EARNINGS PER SHARE,
which is required for both interim and annual periods ending after December 15,
1997. At that time, the Company will be required to change the method currently
used to compute earnings per share and to restate all prior periods. Under the
new requirements for calculating primary earnings per share, the dilutive effect
of stock options will be excluded. The impact of Statement 128 on the
calculation of primary and fully diluted earnings per share is not expected to
be material.

INFLATION AND GENERAL ECONOMIC CONDITIONS

Although the Company cannot accurately anticipate the effect of inflation
on its operations, the Company does not believe that inflation has had, or is
likely in the foreseeable future to have, a material effect on its results of
operations or financial condition.

<PAGE>

BUSINESS

GENERAL

GameTech is a leading designer, developer and marketer of interactive
electronic bingo systems. The Company currently markets a fixed-base system
with light-pen-activated monitors and a portable, hand-held system which can be
played anywhere within a bingo hall. Both bingo systems display electronic
bingo card images which have been purchased and played by a player for each
bingo game. The Company's electronic bingo units enable players to play
substantially more bingo simultaneously than they can play on paper cards,
leading to a greater spend per player and higher profit per bingo session for
the bingo hall operator. GameTech installs the electronic bingo systems at no
cost to the operator in exchange for a percentage of the sales generated by each
unit. The Company typically enters into one to three year contracts pursuant to
which the Company receives up to 30% of the revenues generated by GameTech units
or to a lesser extent, charges fixed rates per bingo session. Management
believes that because a significant majority of players who use GameTech's
electronic bingo units also purchase paper cards, the use of GameTech's
electronic bingo units generates incremental revenues and profits for bingo hall
operators.

GameTech had approximately 3,900 fixed-base units and 2,000 hand-held
units operating in more than 120 Indian and charity bingo halls at July 31,
1997. Following its development of a new generation of hand-held units
introduced in April 1997, GameTech has been increasing its penetration of
existing markets. During August and September, GameTech added an additional
1,780 hand-held units and 271 fixed-base units, bringing its installed base
to approximately 8,000 units. Management estimates that approximately 5% of
the current player spend on bingo in the United States is attributable to
electronic bingo which, management believes, presents the Company with
significant additional growth opportunities.

Bingo is one of the oldest and most popular forms of wagering and
entertainment, with an estimated domestic annual player spend of more than $5
billion, based upon INTERNATIONAL GAMING & WAGERING BUSINESS MAGAZINE'S annual
report dated August 1, 1997. Bingo is easy to understand, a pleasant social
activity and a reasonably priced source of entertainment. As compared to
lotteries, where prizes increase with the number of tickets sold, a bingo game
is more like a raffle, with prizes predetermined before players buy their bingo
cards. Because prize amounts are fixed regardless of the number of paper bingo
cards and electronic bingo card images played, bingo operators' profits increase
nearly dollar-for-dollar from sales of additional paper bingo cards and
electronic bingo card images. Electronic bingo systems like GameTech's allow
players to play more bingo per game than they can by hand, which provides bingo
hall operators with the potential to increase profits commensurately. Nonprofit
organizations sponsor bingo games for fund raising purposes, while Indian
tribes, casinos and government-sponsored entities operate bingo games for
profit. Bingo is a legal enterprise in 46 states (the exceptions are Arkansas,
Hawaii, Tennessee and Utah) and the District of Columbia. Electronic bingo
systems

23
<PAGE>

are currently permitted for charitable organizations in 26 states, and the
Company has units in operation in charitable bingo halls in five of those
states. Under the Indian Gaming Regulatory Act ("IGRA"), in the 46 states where
bingo is legal, electronic bingo may be played on tribal Indian lands as well.
Bingo is currently played on tribal Indian lands in 28 states, and the Company
has units in operation in Indian bingo halls in seven of those states.

STRATEGY

LAUNCH THE SATELLITE BINGO NETWORK. GameTech is a 50% owner of The
Satellite Bingo Network, LLC ("TSBN"), which is anticipated to be launched in
early 1998. TSBN is developing a network to link via satellite participating
players from different Indian bingo halls into one large bingo game, which will
allow TSBN to offer bigger prizes than those generally offered by a single bingo
hall. Initially, TSBN intends to include 15 Indian bingo halls, with a goal of
including more than 25 Indian bingo halls after the first 12 months of
operation.

<PAGE>

SALES, MARKETING AND DISTRIBUTION

The Company's marketing strategy is to target larger bingo hall operators
and demonstrate the benefits of GameTech's bingo systems to both the bingo hall
operator and the bingo players. Management estimates that players spend an
average of more than $50 per day on each GameTech electronic bingo unit
utilized. In addition, management believes that because a significant majority
of players who use GameTech's electronic bingo units also purchase paper cards,
the use of GameTech's electronic bingo units generates higher profit per bingo
session for the bingo hall operator. Benefits of GameTech's electronic units
for the players include the ease of marking numbers called, the decreased
likelihood of missing a winning pattern and the ability to play substantially
more bingo than can be played using only paper bingo cards.

The Company allocates its electronic bingo units based on utilization,
generally offering additional units to those halls that have in excess of 85%
utilization. This strategy is designed to maximize revenues from newly placed
units. The Company's superior customer service orientation and quality products
are designed to promote player loyalty and long-term relationships with bingo
hall operators.

The Company's installation package typically includes the following:

- Installation by the Company at no cost to the bingo hall
- Training sessions for bingo hall staff
- Promotional sessions to introduce players to the system
- Advertising package and point of sale materials
- Ongoing maintenance program

The Company operated with an in-house sales force of three people at July
31, 1997 and added two more prior to September 30, 1997. Sales personnel earn
base salaries plus incentive commissions based on the revenues generated by the
units they place. Management estimates that approximately 40% of GameTech's
units installed at July 31, 1997 were placed by GameTech's in-house sales force.
In addition to the sales force, the Company also has exclusive distributors in
Mississippi, Oklahoma and Texas, whose compensation is based on a percentage of
the sales generated for the Company from their respective territories.
Distributors are typically selected based upon their financial stability and
experience and are required to make an exclusive commitment to the Company.

TARGET MARKETS. There are approximately 275 Indian bingo halls and
approximately 37,000 charity-owned bingo locations in the United States. At
July 31, 1997, the Company had approximately 5,900 installed units at

<PAGE>
more than 120 locations serving more than 380 customers, including many
charitable bingo halls where the Company has multiple customers. For the nine
months ended July 31, 1997 approximately 37% of the Company's revenues were
derived from units installed in Indian bingo halls and the remaining 63% were
from units installed in charity bingo halls. The Company also intends to market
its electronic bingo systems to the military, casino and cruise ship markets.

GameTech currently operates in nine states: charitable bingo halls in five
(California, Mississippi, Oregon, Texas and Washington) of the 26 states where
electronic bingo is currently permitted in charitable bingo halls, and Indian
bingo halls in seven (California, Kansas, Michigan, New Mexico, Oklahoma, Oregon
and Washington) of the 28 states where bingo is currently played in Indian bingo
halls. In addition, GameTech is licensed to serve charitable bingo halls in
Kentucky, and is actively marketing to Indian bingo halls in Minnesota and
Wisconsin. Additional bingo halls in the Northeast and Canada are being
actively pursued. Outside of North America, the Company intends to pursue bingo
opportunities in the Phillippines and Guam and selected countries throughout
Europe, South America and Asia.

ADVERTISING AND PROMOTION. The Company places advertisements in selected
gaming magazines and bingo magazines and newsletters and makes presentations at
key trade shows, especially those devoted solely to bingo. The Company also
plans to develop additional advertising and promotional programs to create
awareness and interest in its electronic bingo products among hall operators and
relevant segments of the consumer marketplace. GameTech is also exploring other
cost-effective promotional strategies, including public relations and media
programs.

PRICING ARRANGEMENTS. The Company installs its units at no cost to the
bingo hall operator. The Company generates revenues by "participating" with
bingo hall operators, receiving up to 30% (with an average of approximately 24%)
of the gross revenues derived from GameTech's electronic bingo systems, or, to a
lesser extent, by charging a fixed fee per unit per session. The Company
maintains ownership of all hardware and software.

NEW MARKETING STRATEGIES. The Company intends to initiate route operations
within the next year to market its hand-held units to bingo halls which only
operate a limited number of sessions per week and would otherwise be
uneconomical to serve. By moving its hand-held units between bingo halls, the
Company intends to introduce electronic bingo to a new segment of the bingo
market. The Company has also assisted in the development of, and placed its
units in, an all-electronic bingo hall in Victorville, California. If this
concept proves successful, the Company would seek to develop, on its own or with
others, a bingo hall equipped entirely with the Company's units. The hall would
be rented to one or more organizations eligible to conduct bingo.

CUSTOMER SERVICE

Management believes that its customer service is one of GameTech's most
important competitive advantages. As a demonstration of the Company's
commitment to customer service, approximately half of the Company's employees
are based in the field and dedicated to customer service and support. The
Company offers 24-hour technical support seven days a week, and responds
immediately to servicing calls via cellular phones and pagers. Service
personnel generally have primary service responsibility for no more than eight
bingo halls, which ensures sufficient time to support each customer's needs.
Service personnel install and repair the equipment and visit the halls
regularly. Although service technicians maintain a small inventory of spare
parts, most repairs are presently handled by returning units to the Arizona or
Texas facilities, with replacement by overnight delivery.

PRODUCTS

The Company designs its bingo systems to generate maximum appeal to bingo
players. The primary benefits to players of electronic bingo units are the
ability to play up to 600 electronic bingo card images during one bingo game,
significantly more than can be played on paper; to have the system
simultaneously mark the numbers called, thereby reducing player error in missing
or mismarking a number, and to have the system alert the player upon attaining a
BINGO, thereby reducing the chance a player misses winning a prize. In
addition, GameTech's

<PAGE>

units are designed to enhance the entertainment value of playing bingo. The
Company's units allow the player to customize certain aspects of the user
interface, and recently developed fixed-base units incorporate
picture-in-picture and audio technology. The Company's hand-held units allow
the player to play bingo electronically while sitting in the player's preferred
seat or moving around the bingo hall. The ease of using GameTech's electronic
bingo units makes playing bingo possible for players with physical disabilities
that may prevent them from playing on paper, which normally involves marking
multiple bingo cards by hand with an ink dauber. Management believes that these
aspects of GameTech's electronic bingo systems make them more appealing to
players than paper cards or electronic bingo units offered by the competition.

The Company currently markets two types of electronic bingo systems: (i) a
fixed-base bingo system and (ii) a portable, hand-held electronic bingo system.
Many bingo hall operators use both fixed-base and hand-held units to satisfy
varying customer preferences. In addition, the Company is a 50% owner of TSBN,
which is developing a satellite-linked bingo network.

FIXED-BASE BINGO SYSTEM

The fixed-base bingo system consists of a local area network (the "LAN") of
microcomputers consisting of the master unit, the communications unit, the sales
unit and the player's unit. All units in the fixed-base bingo system use
microcomputer hardware and can be operated with light pens, touch screens or
keyboards. Fixed-base units can be played in automatic mode or in manual mode,
which requires the players to enter the numbers called. Players can switch
between the two modes and, in either case, up to 600 electronic bingo card
images can be marked simultaneously. A complete fixed-base bingo system
consists of the following:

MASTER UNIT. The master unit is a file server that is located on the
caller's stand and runs the LAN. All bingo game data is processed and stored
through this unit.

COMMUNICATIONS UNIT. The communications unit is also located on the
caller's stand and allows the caller to communicate with each player's unit by
use of a state-of-the-art touch-screen. By simply touching the screen, the
caller enters ball numbers drawn, game numbers, game patterns and wild numbers.
The communications unit is connected to each player's unit for verification of
the nearly 60,000 unique, non-duplicating electronic bingo card images and
enables the winning electronic bingo card images and paper cards to be displayed
on monitors within the bingo hall. The communications unit stores all data
from the bingo system and contains a modem which allows the Company to access
remotely such data. All files are protected against unauthorized access.
Accordingly, the Company monitors utilization of its units and bills bingo hall
operators without the bingo hall operators' assistance. Data from the system is
also available to bingo hall operators to assist them in managing their halls.

SALES UNIT. The sales unit is a point-of-sale terminal where all customer
purchases are made, typically located near the entrance of a bingo hall. Player
buy-in choices for the session are activated by the cashier using a light pen,
and pricing and totals are calculated automatically. The player is given a
printed receipt with a nine-digit pack number which is itemized by date, session
and number of electronic bingo card images purchased.

PLAYER'S UNIT. Each player's unit consists of a separate computer, monitor
and light pen. Each player's unit is built into customized wooden tables with
five units per table. Players enter the nine-digit pack numbers printed on
their receipts to receive their electronic bingo card images. Players can cycle
through all of their electronic bingo card images while play is proceeding. The
player's unit marks the numbers called on each electronic bingo card image being
played either automatically or after the player enters the number called. The
unit always displays the player's three electronic bingo card images that are
closest to a BINGO, and the free space at the center of any electronic bingo
card image that is one number away from BINGO flashes to notify the player. The
unit sounds an alert alarm and the screen flashes when BINGO is achieved.

HAND-HELD BINGO SYSTEMS

Hand-held bingo systems operate similarly to fixed-base systems except
players must manually enter the

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numbers as they are called and each electronic bingo card image being played is
then simultaneously marked. Each unit can mark up to 600 electronic bingo card
images per game, and players can play several hand-held units during a bingo
session. In a hand-held system, the master, communication and sales units are
similar to, and can be shared with, those of fixed-base systems. The hand-held
unit is completely portable, resembling a palm-top computer, and can be played
anywhere within a bingo hall. The hand-held unit is capable of recognizing any
bingo game format the bingo hall operator wishes to play and alerts the player
both audibly and visually when BINGO has been achieved. Hand-held units are
battery powered and battery packs are designed to last for 11 hours (most bingo
sessions are four hours or less). Hand-held units are recharged between bingo
sessions on charging carts, each of which handles 27 hand-held units.

THE SATELLITE BINGO NETWORK

TSBN, the Company's 50%-owned joint venture, is anticipated to be launched
in early 1998, and is to be broadcast from a master control studio at the Gila
River Indian Casino in Chandler, Arizona. TSBN plans initially to include 15
Indian bingo halls throughout the country to create progressive, high-stakes
bingo, with a goal of including more than 25 Indian bingo halls after the first
year of operation. The game is planned to be offered at least once per day,
seven days a week, to the participating halls. The game will be played as
follows: depending on the date of the month (odd or even number), either all of
the odd or even numbers on each paper bingo card are blacked out by the player
prior to the start of the game. The game then will be played until all of the
remaining numbers on a player's paper bingo card are blacked out.

For each game, four types of prizes will be offered: a main prize for the
game, a consolation prize at each participating bingo hall and a chance for a
bonus prize and super prize. The bonus prize will grow each time the game is
played through the allocation of a percentage of the total prizes and is capped
at $250,000. In order to win the bonus prize, BINGO must be achieved within the
first 10 numbers called. The super prize will be $1 million and will be won
only if BINGO is reached within the first eight numbers called. Half of the
revenues from bingo card sales will be allocated to the prize fund. The super
prize, when won, will be paid through an insurance policy carried by the TSBN
owners.

The Company entered into a Joint Venture and Limited Liability Company
Agreement with its joint venture partner, The Satellite Bingo Network (U.S.),
Inc. ("Satellite Bingo US") on April 8, 1997 (the "JV Agreement"). Under the
terms of the JV Agreement, TSBN is governed by a six-person management committee
consisting of three GameTech employees and three Satellite Bingo US employees.
Day-to-day management is undertaken by Gary R. Held, GameTech's Vice President
of Sales and Marketing, and two Satellite Bingo US employees.

GameTech's obligations under the JV Agreement are to identify and solicit
potential Indian bingo hall customers for TSBN and to arrange financing and
capital for TSBN, including capital to fund operating losses. GameTech will be
entitled to a fee of 5% of any financing arranged outside of the joint venture.
Satellite Bingo US's obligations are to develop and implement improvements to
the TSBN operating system, to manage and supervise the implementation and
operation of the TSBN system at participating Indian bingo halls, and to provide
training for bingo hall staff. Satellite Bingo US receives a license fee of 6%
of net revenues for the licensing of the operating system to TSBN, such fee not
to exceed $750,000 per year.

GameTech and Satellite Bingo US each have a 50% membership interest
in TSBN and the JV Agreement provides for net profits and losses to be
allocated pro rata according to the membership interests. The Company to
date has funded the operating losses of TSBN and consequently for financial
reporting purposes will record 100% of TSBN's future operating losses, if any.

The Gila River Indian Casino is in the process of constructing the TSBN
studio. TSBN is paying the costs of construction, for which approximately
$300,000 is budgeted. Through July 31, 1997, the Company had invested $50,000
and advanced approximately $121,000 to TSBN to fund planning and development
costs.

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The Company has currently budgeted approximately an additional $1.0 million to
fund TSBN to the point when it expects TSBN will become self-sustaining. The
Company currently has capacity to fund the obligations to TSBN under the
Revolving Credit Facility or may use a portion of the proceeds of this offering
to fund such obligations. As a new venture, TSBN's operation may be subject to
unforeseen delays or unanticipated problems. However, Satellite Bingo US is an
affiliate of a Canadian entity, The Satellite Bingo Network, which has operated
a similar system in Canada for a group of Canadian charities since February
1996. Satellite Bingo US has advised the Company that the Canadian system has
been profitable since inception and has never failed to provide scheduled bingo
sessions on its network. In the United States, for the past eight years,
Multimedia Games, Inc. has operated a similar bingo game, "Mega Bingo," and TSBN
will compete with Mega Bingo for some of the same bingo halls.

PRODUCT DEVELOPMENT

GameTech has implemented an ongoing research and development program to
enhance the features and capabilities of its bingo systems and to maintain a
competitive advantage in the marketplace, as well as to extend its product line
to new games and applications. Product development efforts produced the hand-
held system, which was introduced in January 1996 and improved in April 1997.
In addition, an advanced fixed-base system called GameTech Gold, incorporating
picture-in-picture technology, was introduced in August 1996.

The Company has budgeted approximately $2.0 million for the following
product development efforts which it plans to complete during its next fiscal
year:

- Continue development of hand-held units to address all targeted
segments of the market;

- Integrate other communications technologies into the Company's
existing fixed-base bingo system to broaden the reach of the game for
remote game operation, including the integration of satellite or other
communication technologies;

- Complete the development of Ultra Fast Action Bingo and progressive
bingo for the Company's fixed-base bingo systems currently in
operation. With Ultra Fast Action Bingo, bingo players from across
the country could be linked to the same game, which could offer large
prizes as a result of its parimutuel nature; and

- Develop a point-of-sale system to allow the recording of bingo hall
sales attributable to both fixed-base and hand-held electronic bingo
systems, as well as sales of other items including paper bingo cards,
bingo accessories and refreshments.

INDUSTRY

Bingo is easy to understand, a pleasant social activity and a reasonably
priced source of entertainment, with a guaranteed winner for each game. In
contrast to lotteries, where prizes grow with the number of tickets sold, a
bingo game is like a raffle, with prizes predetermined before players purchase
their paper bingo cards or electronic bingo card images. Hence, the marginal
profit on each additional paper bingo card or electronic bingo card image sold
is almost 100%. In a conventional paper bingo format, even the most experienced
players are limited in the number of cards that they can play by the time
required to mark the cards and recognize a winning pattern within the number
calling cycle. As such, there is a natural barrier to sales growth that affects
bingo operations, which has led to the development of electronic bingo units.

In the United States, bingo is a legal enterprise in 46 states (the
exceptions are Arkansas, Hawaii, Tennessee, and Utah) and the District of
Columbia. In 43 of those states and the District of Columbia, bingo must be
operated either by, or in association with, a not-for-profit organization. The
three states where it may be played under private ownership for profit are
Nevada, New Jersey and certain parts of Maryland. Electronic bingo systems

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are regulated differently than traditional paper bingo, with electronic bingo
systems currently permitted in 26 states. In any of the 46 states where bingo
and other forms of gaming are legal, bingo may be played on tribal Indian lands
without supervision or regulation by the state in which they are located. In
Canada, government-sponsored entities and commercial operators run games on
behalf of various charitable halls, often playing several sessions per day.
Bingo is both legal and popular in various other international markets, and in
the military and cruise ship market segments.

The 1997 CASINO AND GAMING BUSINESS MARKET RESEARCH HANDBOOK estimates that
approximately 37,000 charitable halls have licenses to operate bingo games in
the United States. In some parts of the United States, bingo operators have
designed halls specifically to accommodate bingo play and then rent the halls
for fundraising events to charities that do not have their own facilities. From
a player's perspective, this offers a consistent, familiar location for bingo on
a regular basis.

More than $5 billion annually is spent on bingo in the United States. The
majority of bingo games in the United States are operated by nonprofit
organizations for fundraising purposes. The two primary segments of the bingo
gaming market are (i) the charity bingo market and (ii) the Indian bingo market.

CHARITY BINGO MARKET

Charity bingo sessions are conducted regularly by parochial and private
schools, religious organizations, fraternal orders, fraternities, sororities,
little leagues, symphony orchestras, cultural and civic organizations, clubs,
day care centers, retirement associations, and a host of other nonprofit
entities across the United States. While larger halls are candidates for both
fixed-base and hand-held units, some of the charity halls, because of their
small size or infrequent operation, are better candidates for hand-held units,
which can be provided on a predetermined date and removed after the completion
of the bingo session. In many states it is permissible for a number of
charities to associate themselves with each other for the purpose of operating
bingo. Under this concept, the association rents or leases a suitable hall and
plays bingo seven days per week with a specific charity accepting responsibility
for operations each day of the week. The result is a bingo operation that is
much more efficient than an isolated charity game and is therefore an
appropriate candidate for either fixed-base or hand-held bingo systems.

INDIAN BINGO MARKET

The largest bingo games in terms of player spend are generally run on
tribal Indian lands, and there are approximately 275 Indian bingo operations
located on tribal lands in 28 states. The bingo halls located on these
reservations are constructed to seat between 300 and 3,000 players. These
operations are conducted three to seven days per week, playing up to 28 bingo
sessions per week. While many Indian halls also offer video poker and other
gaming machines, off-track thoroughbred betting and on-premise card rooms for
poker and other card games, management believes that bingo is one of the most
popular games played.

OTHER MARKET SEGMENTS

Other noteworthy segments of the bingo market include cruise ships,
military bases and casinos. Most cruise ships organize bingo sessions at least
once per cruise. Large scale bingo sessions are also conducted regularly on
most large military bases. While not as large a market as slot machines or table
games, approximately 25 Nevada casinos regularly operate bingo sessions. Bingo
is also a popular form of entertainment in many countries throughout the world,
including Canada which has an estimated $2 billion annual bingo market.

COMPETITION

The electronic bingo industry is characterized by intense competition based
on, among other things, an electronic bingo system's ability to generate
incremental sales for bingo hall operators through product appeal to players,
ease of use and serviceability, support and training, distribution, name
recognition and price. Management

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<PAGE>

believes that the Company competes primarily with other companies providing
electronic bingo units, including Advanced Gaming Technology, Inc., Bingo
Concepts, Bingo Technology Corporation, Inc., FortuNet, Inc. and Stuart
Entertainment, Inc., and also competes with companies offering traditional paper
bingo cards. The Company, through TSBN, will also compete with Multimedia
Games, Inc.'s "Mega Bingo," which has operated a satellite bingo game in the
United States for the past eight years. Certain of the Company's competitors
may have significantly greater financial and technical resources than the
Company, as well as more established customer bases and distribution channels,
which may allow them to move rapidly into the Company's markets and acquire
significant market share. Increased competition may result in price reductions,
reduced operating margins, conversion from lease to sale of the Company's units,
and loss of market share, any of which could materially and adversely affect the
Company's business, operating results or financial condition. Furthermore, the
Company's success may benefit existing competitors and induce new competitors to
enter the market. The Company has attempted to counter competitive factors by
providing superior service and new, innovative and quality products, but there
can be no assurance that the Company will continue to be a successful competitor
in the electronic bingo industry. In addition, the Company competes with other
similar forms of entertainment including casino gaming and lotteries.
Management believes, however, that the quality of its fixed-base and hand-held
bingo systems, combined with superior service and customer support,
differentiate it from its competitors.

Management estimates that at July 31, 1997, GameTech had domestic market
shares of more than 70% of fixed-base units installed and approximately 15% of
hand-held units installed.

EMPLOYEES

At July 31, 1997, the Company had approximately 50 full-time equivalent
employees. The Company and its employees are not subject to any collective
bargaining agreements, and the Company believes that its relations with its
employees are good.

SUPPLIERS

The Company uses a contract manufacturer in Taiwan to supply its hand-held
units. All hardware components for the fixed-base bingo systems are sourced by
the Company from numerous suppliers domestically and assembled at its facilities
in Arizona and Texas. The Company has not had any significant quality problems
or delays in securing its hand-held units or the supply of fixed-base system
components. See "Risk Factors -- Dependence on Single-Source Suppliers for
Hand-Held Units."

FACILITIES

The Company operates from two leased locations: a 6,500 square-foot
headquarters site in Tempe, Arizona under a lease which expires September 18,
2001 and a 6,500 square-foot regional center in Austin, Texas under a sublease
which expires February 28, 1998. Monthly rent for these facilities is
approximately $3,880 and $2,940, respectively. Assembly of fixed-base systems
and testing and repair of all the Company's products occurs at both locations,
with each serving as a regional hub. In addition, TSBN has a 5,600 square foot
facility for its operations adjacent to the Company's headquarters in Tempe
under a lease which expires May 31, 2002. Monthly rent for this facility is
approximately $2,925. The Company rents a small research and development
facility for approximately $975 per month in Denver, Colorado under a lease
which expires May 31, 1999. Additional research and development activities are
carried out by three Company employees at their personal residences in San
Diego, California and Las Vegas, Nevada. Such employees have requested that
they be permitted to work from their personal residences. The Company pays no
rent to these employees, but pays certain overhead related to, and believes the
facilities are adequate for, the research and development activities carried on
there.

INTELLECTUAL PROPERTY/PATENTS

The Company currently holds no registered trademarks, service marks or
patents and does not believe that

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the lack of such intellectual property protection is material to its business.
The Company's distribution agreement with its Texas distributor, Trend Gaming
Systems ("Trend") contains a confidentiality provision whereby the parties agree
not to use, or disclose to any third party, confidential information and
materials concerning the other's business, plans, customers, technology or
products. Trend may not publish a technical description of GameTech's products
beyond that published by GameTech, and after termination of the distribution
agreement neither party may use or disclose confidential information, nor may it
manufacture any devices, components or assemblies using such information. The
employment agreements between the Company and certain of its executive officers
also provide that the executive officer may not disclose or use the Company's
confidential information during or after the term of his employment.
Substantially all of the Company's employees have signed confidentiality and
non-disclosure agreements.

LEGAL PROCEEDINGS

In November 1996, a patent infringement action and demand for jury
trial was commenced against the Company and five other defendants by
FortuNet, Inc. in the U.S. District Court, Southern District of California.
The other defendants were Advanced Gaming Technology, Inc., American Video
Systems, FortuNet Canada, Inc., Network Gaming, Inc. (f/k/a Artificial
Intelligence), and Multimedia Games, Inc. The complaint alleges that the
Company, among others, has infringed, actively induced or contributed to the
infringement of Patent No. 4,624,462 (the "'462 Patent") by making, using and
selling, among other acts, electronic bingo devices that allegedly infringe
upon at least one claim of the '462 Patent. The '462 Patent was issued in
1986 and will expire in 2001 and is allegedly infringed by the Company's
fixed-base bingo units. The plaintiff seeks a preliminary and permanent
injunction prohibiting the Company from infringement of plaintiff's rights to
the '462 Patent, as well as actual damages, enhanced (treble) damages,
attorneys' fees and any other costs. The Company, in July 1997, won its
motion for transfer and severance in this action. All prior court dates have
been vacated in light of the transfer to the U.S. District Court of Arizona.
A scheduling conference in the U.S. District Court of Arizona has been set
for January 5, 1998.

In March 1996, a patent infringement action and demand for jury trial was
commenced against the Company by Bingo Technology Corporation, Inc. (formerly
Bingo Card Minder Corporation), in the U.S. District Court, Northern District of
California. The complaint alleges that the Company has infringed, actively
induced or contributed to the infringement of Patent No. 4,378,940 (the "'940
Patent") by making, using and selling, among other acts, electronic bingo
devices that allegedly infringe upon at least one claim of the '940 Patent. The
'940 Patent was issued in 1983 and will expire in 2000 and is allegedly
infringed by the Company's hand-held bingo units. The plaintiff seeks a
preliminary and permanent injunction prohibiting the Company from infringement
of plaintiff's rights to the '940 Patent, as well as actual damages, enhanced
(treble) damages, attorneys' fees and costs. A trial date has been set for
December 7, 1998.

The Company believes that its products do not infringe either the '462
Patent or the '940 Patent and intends to continue to defend against both actions
vigorously. However, both actions are in the early stages of litigation, and
there can be no assurance that favorable outcomes will be obtained or that if
either or both actions are resolved in favor of the plaintiffs, such results
would not have a material adverse effect on the Company.

In October 1997, two actions were commenced against the company by Apex
Wholesale, Inc. ("Apex") in the U.S. District Court, Southern District of
California. The Company formerly purchased its hand-held units manufactured by
Tidalpower through Apex but terminated such arrangement in September 1996 and
now purchases hand-held units directly from Tidalpower. In one action, Apex is
asserting a copyright and trade secret claim on GameTech's hand-held bingo
units. The defendants (in addition to the Company) were Tidalpower, Green
Dollars Industrial Ltd. (a foreign corporation), Vern D. Blanchard, Richard T.
Fedor, Clarence H. Thiesen, Leo Lee (a foreign national), Doris Tsao (a foreign
national), and Morgan Chen (a foreign national). The complaint alleges that the
Company breached various oral agreements with Apex and then misappropriated,
developed and marketed hand-held bingo

32
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units which allegedly were developed through a cooperative effort of Apex, Vern
D. Blanchard, and Jeff Rogers (an individual). Apex seeks general damages,
injunctive relief, exemplary and punitive damages, attorney's fees, and any
other costs the court deems proper. In the second action to avoid a fraudulent
transfer, Apex alleges that the Company, as well as Tidalpower, Green Dollars
Industrial Ltd., Leo Lee, Doris Tsao, and Morgan Chen conspired to avoid a
default judgment entered in favor of Apex against Green Dollars Industrial Ltd.
Apex seeks general damages in the amount of $400,400, special damages totaling
$35,000, exemplary or punitive damages in the sum of $1,201,200, prejudgment
interest, costs of suit, and any other relief the court finds proper.

The Company intends to vigorously defend itself against both actions.
These actions are in the early stages of litigation, and there can be
no assurance that favorable outcomes will be obtained or that if the actions are
resolved in favor of the plaintiff, such results would not have a material
adverse effect on the Company.

In the normal course of business, the Company may be named as defendant or
co-defendant in lawsuits involving primarily claims for damages. Management
believes that any such unasserted claims will not have a material adverse effect
on the Company.

GOVERNMENT REGULATION

The Company is subject to regulation by authorities in all jurisdictions in
which its electronic bingo units are installed. On tribal Indian lands,
regulation is pursuant to the provisions of IGRA. Otherwise, the regulatory
requirements vary from jurisdiction to jurisdiction, and licensing, other
approval or finding of suitability processes with respect to the Company, its
personnel and its products can be lengthy and expensive. Many jurisdictions
have comprehensive licensing, reporting and operating requirements with respect
to the manufacture, sale, use and operation of bingo and bingo-related products,
including electronic bingo equipment. These requirements have a direct impact
on the conduct of the day-to-day operations of the Company. In substantially
all states where charitable bingo is legal, the state imposes limits on prizes
on a per game, per session or annual basis. Many states license or otherwise
regulate suppliers of bingo equipment, and some states prohibit the rental of
bingo equipment while other states regulate whether equipment may be rented at a
fixed or percentage rate. Generally, regulatory authorities may deny
applications for licenses, other approvals or findings of suitability for any
cause they may deem reasonable. There can be no assurance that the Company, its
products or its personnel will receive or be able to maintain any necessary
licenses, other approvals or findings of suitability. The loss of a license in
a particular state will prohibit the Company from realizing revenues in that
state. Any change in law or regulation by a state reducing prize limits,
further regulating suppliers of bingo equipment, prohibiting rental of bingo
equipment or restricting rental rates or the loss of one or more licenses held
by the Company could have an adverse effect on the Company's business. See
"Risk Factors-- Regulatory Risks."

INDIAN GAMING

Gaming on Indian lands, including the terms and conditions under which
gaming equipment can be sold or leased to Indian tribes, is or may be subject to
regulation under the laws of the tribes, the laws of the host state and IGRA.
Under IGRA, gaming activities are classified as Class I, II or III. Class I
gaming includes social games played solely for prizes of minimal value or
traditional forms of Indian gaming engaged in as part of, or in connection with,
tribal ceremonies or celebrations. Class II gaming includes bingo and other
card games authorized or not explicitly prohibited and played within the host
state (but not including banking card games such as baccarat or blackjack).
Class III gaming includes all forms of gaming that are not Class I or Class II,
including slot machines, video lottery terminals and casino style games. Indian
tribes may conduct Class II gaming under IGRA without having entered into a
written compact with their host state if the host state permits Class II gaming,
but must enter into a separate written compact with the state in which they are
located in order to conduct Class III gaming activities.

<PAGE>
The Company is not aware of any state in which a tribal-state compact seeks to
regulate bingo. Under IGRA, tribes are required to regulate all gaming under
ordinances approved by the Chairman of the NIGC. Such ordinances may impose
standards and technical requirements on gaming hardware and software, and may
impose registration, licensing and background check requirements on gaming
equipment suppliers and their officers, directors and stockholders.

REGULATION OF ELECTRONIC BINGO SYSTEMS

The Company's electronic bingo products, including its fixed-base and hand-
held units, are more heavily regulated than traditional paper bingo, and
federal, state, tribal and local regulations vary significantly by jurisdiction.

IGRA defines Class II gaming to include "the game of chance commonly known
as bingo, whether or not electronic, computer or other technologic aids are used
in connection therewith," and defines Class III gaming to include "electronic or
electromechanical facsimiles of any game of chance or slot machines of any
kind." The Company believes that both its fixed-base and hand-held units are
Class II games. In the event that either is classified as a Class III device,
such a designation would reduce the potential market for the devices (because
only Indian gaming halls that had entered into a tribal-state compact that
permits Class III electronic gaming systems would be permitted to use the
device), unless the Company could modify the systems to have them reclassified
as a Class II game. It is difficult to speculate as to what modifications may
be required in the event of such a classification.

TSBN, which is anticipated to be launched in early 1998, is intended to be
played in Indian bingo halls. See "--Products --The Satellite Bingo Network."
The Company believes TSBN is a Class II game under IGRA. As such, TSBN will be
subject to tribal regulation approved by the NIGC and will be required to
register or obtain licenses as required by the various Indian tribes operating
the Indian gaming halls participating in TSBN.

Electronic bingo in charitable halls is less widely permitted than paper
bingo, largely because many states' laws and regulations were written before
electronic bingo was introduced. Electronic bingo in charitable halls is
currently permitted in at least 26 states, including Alabama, Alaska, Arizona,
California, Georgia, Kansas, Kentucky, Louisiana, Maine, Massachusetts,
Mississippi, Nebraska, Nevada, New Hampshire, New York, North Dakota, Ohio,
Oregon, Pennsylvania, Rhode Island, South Dakota, Texas, Vermont, Virginia,
Washington and Wyoming. Because many state laws and regulations are silent with
respect to electronic bingo, changes in regulatory and enforcement personnel
could impact the continued operation of electronic bingo in some of these
states. In addition, some states require the inspection, approval or
modification of electronic bingo systems before sale in those states.

APPLICATION OF FUTURE OR ADDITIONAL REGULATORY REQUIREMENTS

The Company intends to seek the necessary licenses, approvals and findings
of suitability for the Company, its products and its personnel in other
jurisdictions where significant bingo activities are anticipated. However,
there can be no assurance that such licenses, approvals or findings of
suitability will be obtained and will not be revoked, suspended or conditioned
or that the Company will be able to obtain the necessary approvals for its
future products as they are developed in a timely manner, or at all. If a
license, approval or finding of suitability is required by a regulatory
authority and the Company fails to seek or does not receive the necessary
license or finding of suitability, the Company may be prohibited from
distributing its products for use in the respective jurisdiction or may be
required to distribute its products through other licensed entities at a reduced
profit to the Company.

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<PAGE>

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The Company's directors and executives officers are as follows:

NAME AGE POSITION
----------------------- -------- -----------------------------------------
Richard T. Fedor. . . . . 51 Chairman of the Board and Chief
Executive Officer
Clarence H. Thiesen . . . 66 Chief Financial Officer and Director
Gary R. Held. . . . . . . 43 Vice President -Sales & Marketing and
Director
Conrad J. Granito, Jr.. . 39 President and Chief Operating Officer
John J. Paulson . . . . . 43 Treasurer
Paul M. Wehrs . . . . . . 48 Vice President -Operations
Andrejs K. Bunkse . . . . 28 General Counsel -Corporate Secretary

RICHARD T. FEDOR is a co-founder of GameTech and has held the positions of
Chairman of the Board and CEO since 1994. Mr. Fedor was also the Company's
President from 1994 until August 1, 1997. From 1991 to 1994, Mr. Fedor's
occupation was that of a private investor. Previously, Mr. Fedor was President
of ZYGO Corporation, a manufacturer of high performance, laser-based
electro-optical measuring instruments, from 1987 to 1991. From 1985 to 1987,
Mr. Fedor held the position of Operations Vice President at International Game
Technology ("IGT"). Mr. Fedor has also held various senior management positions
at Hewlett Packard and GTE.

CLARENCE H. THIESEN is a co-founder of GameTech and has held the position
of Chief Financial Officer since 1994. Prior to his employment with GameTech,
Mr. Thiesen was a financial consultant from 1992 to 1994. From 1988 to 1992,
Mr. Thiesen was Vice President of ZYGO Corporation, where he focused on sourcing
in the Far East and assisted in restructuring the company. From 1986 to 1988,
Mr. Thiesen was the President of Keno Computer Systems, Reno, Nevada. From 1981
to 1986, Mr. Thiesen was the Vice President of Finance at IGT, where he
specialized in acquisitions, the installation of new accounting, budgeting and
forecasting systems and financial public relations.

GARY R. HELD is a co-founder of GameTech and has held the position of Vice
President -Sales & Marketing since 1994. Mr. Held has over nine years of
experience in the bingo industry. Prior to his employment with GameTech, Mr.
Held was Vice President -Sales and Marketing at Advanced Gaming Technology, Inc.
from November 1993 until 1994. Mr. Held was the General Manager of Bingo
Operations and Promotions & Marketing Director at the Barona Casino in
San Diego, California from 1992 to November 1993. During 1991, Mr. Held was
involved in management at the Treasure Island Casino in Red Wing, Minnesota.
Mr. Held was previously Vice President of Sales at FortuNet, Inc., one of the
first companies to develop electronic bingo units. Mr. Held also has experience
at Bingo West, the largest bingo distributor in the western United States, where
he was responsible for sales to charity and Indian bingo halls.

CONRAD J. GRANITO, JR. has been a consultant for GameTech since March 1997
and joined the Company in August 1997 as President and Chief Operating Officer.
From 1993 to July 1997, Mr. Granito was the General Manager of the Isleta Gaming
Palace in Albuquerque, New Mexico, a Class III gaming operation which is owned
and operated by the Pueblo of Isleta Tribe. From 1990 to 1993, Mr. Granito was
the Director of Gaming Operations for the Sycuan Band of Mission Indians where
he supervised all gaming operations of the Sycuan Gaming Center in San Diego,
California. Mr. Granito also acted as a consultant for over 20 Indian tribes
across the United States regarding their gaming operations.

35
<PAGE>

JOHN J. PAULSON, a certified public accountant, joined GameTech in 1996 as
the controller and was promoted to Treasurer in July 1997. Prior to his
employment with GameTech, Mr. Paulson was Chief Financial Officer at the Sycuan
Gaming Center from 1991 to 1996. Mr. Paulson has also served as a senior
manager for the national CPA and consulting firm of McGladrey & Pullen, LLP,
certified public accountants, where he consulted for Indian bingo halls and
casinos and provided audit and consulting services to several publicly traded
corporations.

PAUL M. WEHRS joined GameTech in April 1997 as Vice President -Operations.
From 1989 to April 1997, Mr. Wehrs was Installation Manager at BancTec
International, Inc. which developed, sold and installed check imaging systems.
Mr. Wehrs previously was Vice President of Operations at Park Plaza Bank in
St. Cloud, Minnesota.

ANDREJS K. BUNKSE joined GameTech in April 1997 as General Counsel
- -Corporate Secretary. From 1995 to 1997, Mr. Bunkse was an associate at the law
firm of Mitchell, Brisso, Delaney & Vrieze in Eureka, California. Mr. Bunkse is
a graduate of Syracuse University and the Santa Clara University School of Law,
is a member of the State Bar of California and the American Bar Association, and
is admitted to practice before the United States District Court for the Southern
District of California.

Pursuant to the Certificate of Incorporation, the Board of Directors is
divided into three classes of directors serving staggered three-year terms. As
a result, approximately one-third of the Board of Directors will be elected each
year. Currently, the Board of Directors consists of three members. The Company
intends to add two qualified, independent directors following completion of this
offering subject to any regulatory approvals, and will establish a compensation
committee and audit committee. See "Risk Factors -Control by Principal
Stockholders; Anti-Takeover Provisions."

COMPENSATION OF DIRECTORS

When directors who are not receiving compensation as officers, employees or
consultants of the Company are appointed to the Board of Directors, they will be
entitled to receive an annual retainer fee of $5,000, plus $500 and
reimbursement of expenses for each meeting of the Board of Directors and each
committee meeting of the Board of Directors that they attend in person. In
addition, such directors will receive grants of non-qualified stock options for
3,000 shares upon joining the Board of Directors and 1,000 shares following each
Annual Meeting of Stockholders while such director continues to serve on the
Board of Directors.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During the fiscal year ended October 31, 1996, the Company did not have a
compensation committee of its Board of Directors, or other board committee
performing equivalent functions. Decisions concerning the compensation of
executive officers were made by the entire Board of Directors.

36
<PAGE>

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE. The following table sets forth certain
information concerning the compensation paid by the Company to the Chief
Executive Officer and to the two other most highly compensated executive
officers who were employed during the fiscal year ended October 31, 1996.

SUMMARY COMPENSATION TABLE

1996 ANNUAL COMPENSATION
------------------------
SALARY BONUS
-------- -------
NAME AND PRINCIPAL POSITION

Richard T. Fedor
Chairman of the Board and CEO. . . . $154,000 $20,000

Clarence H. Thiesen
Chief Financial Officer. . . . . . . 111,033 15,000

Gary R. Held
Vice President -Sales & Marketing. . 133,798 13,000

STOCK OPTION PLAN

The Company has adopted the Stock Option Plan, which authorizes the grant
of up to 2,000,000 options to purchase shares of Common Stock, of which 808,000
remain available for grant, as (i) incentive stock options ("ISOs") within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code") or (ii) stock options that are not intended to qualify under Section 422
of the Code ("Non-qualified Stock Options" and together with ISOs, "Options").
Directors, officers, employees and consultants of the Company, as selected from
time to time by the Board of Directors or the committee administering the Stock
Option Plan, will be eligible to participate in the Stock Option Plan.

The Stock Option Plan provides that it is to be administered by the
Company's Board of Directors or a committee thereof (such Board of Directors or
committee as is administering the Stock Option Plan, the "Administrator").
Subject to certain limitations, the Administrator has complete discretion to
determine which eligible individuals are to receive awards under the Stock
Option Plan, the form and vesting schedule of awards, the number of shares
subject to each award and the exercise price, the manner of payment and
expiration date applicable to each award.

Under the terms of the Stock Option Plan, all options will expire on the
date that is the earliest of 30 days after the holder's termination of
employment with the Company, one year after the holder's death or 10 years after
the date of grant. The exercise price per share of an ISO will be determined by
the Administrator at the time of grant, but in no event may be less than the
fair market value of the Common Stock on the date of grant. Notwithstanding the
foregoing, if an ISO is granted to a participant who owns more than 10% of the
voting power of all classes of stock of the Company, the exercise price will be
at least 110% of the fair market value of the Common Stock on the date of grant
and the exercise period will not exceed five years from the date of grant. The
exercise price per share of Non-qualified Stock Options will be determined by
the Administrator in its sole discretion.

Of the named executive officers, Richard T. Fedor was granted options to
purchase 492,000 shares of Common Stock in the nine months ending July 31, 1997.
The average exercise price of these options is $1.02 per

37
<PAGE>

share. Clarence H. Thiesen was granted options to purchase 135,000 shares of
Common Stock in the nine months ending July 31, 1997. The average exercise
price of these options is $1.00 per share. Gary R. Held was granted options to
purchase 135,000 shares of Common Stock in the nine months ending July 31, 1997.
The average exercise price of these options is $1.07 per share. Conrad J.
Granito, Jr. was granted options to purchase 200,000 shares of Common Stock in
the nine months ending July 31, 1997. The average exercise price of these
options is $1.00 per share.

EMPLOYMENT AGREEMENTS

Richard T. Fedor entered into an amended employment agreement on October 1,
1997 to serve as Chief Executive Officer of the Company. His annual salary is
$200,500 and may be increased, but not decreased, at the discretion of the Board
of Directors. Mr. Fedor may be awarded an annual bonus at the discretion of the
Board of Directors as described below. Mr. Fedor's employment agreement is for
a term of two years, which term is automatically renewed unless his employment
is terminated pursuant to the employment contract. If Mr. Fedor's employment is
constructively terminated or terminated by the Company without cause, both as
defined in the agreement, or if he elects to terminate his employment within
twelve months of any change of control, he is entitled to receive an amount
equal to two years of his base salary and immediate vesting of any long-term
incentive rights including stock options. In the event of a change of control,
the term of Mr. Fedor's agreement will automatically extend for two years
following the effective date of the change of control. Mr. Fedor's agreement is
terminable by the Company for cause. The agreement provides that Mr. Fedor may
not compete with the Company during the term of his employment and for a period
of two years after his retirement or other termination of his employment. The
agreement also provides that Mr. Fedor is entitled to participate in any
long-term incentive plan for Company executives.

Clarence H. Thiesen entered into an amended employment agreement on
September 1, 1997 to serve as Chief Financial Officer of the Company. His
annual salary is $130,000 and may be increased, but not decreased, at the
discretion of the Board of Directors. Mr. Thiesen may be awarded an annual
bonus at the discretion of the Board of Directors as described below. Mr.
Thiesen's employment agreement is for a term of one year, which term is
automatically renewed unless his employment is terminated pursuant to the
employment contract. If Mr. Thiesen's employment is constructively terminated
or terminated by the Company without cause, both as defined in the agreement, or
if he elects to terminate his employment within twelve months of any change of
control, he is entitled to receive an amount equal to one year of his base
salary and immediate vesting of any long-term incentive rights including stock
options. In the event of a change of control, the term of Mr. Thiesen's
agreement will automatically extend for one year following the effective date of
the change of control. Mr. Thiesen's agreement is terminable by the Company for
cause. The agreement provides that Mr. Thiesen may not compete with the Company
during the term of his employment and for a period of one year after his
retirement or other termination of his employment. The agreement also provides
that Mr. Thiesen is entitled to participate in any long-term incentive plan for
Company executives.

Gary R. Held entered into an amended employment agreement on October 1,
1997 to serve as Vice President -Sale and Marketing of the Company. His annual
salary is $136,000 and may be increased, but not decreased, at the discretion of
the Board of Directors. Mr. Held may be awarded an annual bonus at the
discretion of the Board of Directors as described below. Mr. Held's employment
agreement is for a term of two years, which term is automatically renewed unless
his employment is terminated pursuant to the employment contract. If Mr. Held's
employment is constructively terminated or terminated by the Company without
cause, both as defined in the agreement, or if he elects to terminate his
employment within twelve months of any change of

38
<PAGE>

control, he is entitled to receive an amount equal to two years of his base
salary and immediate vesting of any long-term incentive rights including stock
options. In the event of a change of control, the term of Mr. Held's agreement
will automatically extend for two years following the effective date of the
change of control. Mr. Held's agreement is terminable by the Company for cause.
The agreement provides that Mr. Held may not compete with the Company during the
term of his employment and for a period of two years after his retirement or
other termination of his employment. The agreement also provides that Mr. Held
is entitled to participate in any long-term incentive plan for Company
executives.

Conrad J. Granito, Jr. entered into an amended employment agreement on
October 1, 1997 to serve as President and Chief Operating Officer of the
Company. His annual salary is $130,000 and may be increased, but not decreased,
at the discretion of the Board of Directors. Mr. Granito may be awarded an
annual bonus at the discretion of the Board of Directors as described below.
Mr. Granito's employment agreement is for a term of two years, which term is
automatically renewed unless his employment is terminated pursuant to the
employment contract. If Mr. Granito's employment is constructively terminated
or terminated by the Company without cause, both as defined in the agreement, or
if he elects to terminate his employment within twelve months of any change of
control, he is entitled to receive an amount equal to two years of his base
salary and immediate vesting of any long-term incentive rights including stock
options. In the event of a change of control, the term of Mr. Granito's
agreement will automatically extend for two years following the effective date
of the change of control. Mr. Granito's agreement is terminable by the Company
for cause. The agreement provides that Mr. Granito may not compete with the
Company during the term of his employment and for a period of two years after
his retirement or other termination of his employment. The agreement also
provides that Mr. Granito is entitled to participate in any long-term incentive
plan for Company executives.

The Compensation Committee of the Board of Directors will convene on an
annual basis to discuss the productivity of each executive officer of the
Company. If the Company has met the growth and profit objectives the Board has
set for the period of review and the executive has been successful in meeting
his Board-outlined objectives, the Compensation Committee will award such
executive with an appropriate bonus commensurate with his performance and value
to the Company.

39
<PAGE>

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

NOTES PAYABLE TO STOCKHOLDERS

On March 1, 1997, the Company issued a convertible promissory note in favor
of Richard T. Fedor and Bonnie G. Fedor in the original principal amount of
$1,341,200 (the "Fedor Note"), and a convertible promissory note in favor of the
CJB Family Trust in the principal amount of $80,954 (the "Trust Note" and
collectively with the Fedor Note, the "Notes"). Vern D. Blanchard, an employee
of the Company, is the sole trustee of the CJB Family Trust. The initial
interest rate of the Notes is 13.0%, plus or minus incremental changes in the
prime rate, compounded daily, and they are due in full on February 28, 1999.
The principal and accrued interest on the Notes outstanding at July 31, 1997 was
$1,475,888. The Notes represent the consolidation of previously outstanding
notes and interest payable to the holders, and are convertible at the holders'
option into Common Stock of the Company at a conversion price that is the lower
of (i) the lowest price offered to any individual or investor group or (ii)
$1.00 per share. The holders will convert their respective Notes plus accrued
interest into Common Stock of the Company at the $1.00 per share price specified
in the Notes prior to the completion of this offering.

LOANS TO COMPANY

In October 1996, GameTech and Richard T. Fedor, the Chairman of the Board
and Chief Executive Officer of the Company, as Borrowers, entered into a
non-revolving loan commitment with Wells Fargo in the principal amount of $3.0
million. As part of the loan transaction, Mr. Fedor and Bonnie G. Fedor agreed
to subordinate certain indebtedness owed to them by the Company (see "--Notes
Payable to Stockholders") to the indebtedness owed by the Company and Mr. Fedor
to Wells Fargo, pursuant to a subordination agreement with Wells Fargo. On
April 11, 1997, Wells Fargo agreed to amend the loan documents, naming the
Company as the sole borrower. Under the terms of the amendment, Mr. Fedor must
retain at least 25% of the outstanding Common Stock prior to any initial public
offering.

STOCK REPURCHASE AGREEMENT

On November 22, 1996, the Company entered into an agreement with a former
officer of the Company, to repurchase 1,000,000 shares of Common Stock and
repay a note and accrued interest of approximately $168,000 for $875,000. The
Company issued a note in the principal amount of $625,000 as part payment for
the repurchase of the shares of Common Stock and paid the balance of $250,000 in
cash. The note bears interest at 5.65% and is payable in four semi-annual
installments of $156,250 plus interest. See Note 6 of Notes to Financial
Statements included elsewhere herein.

The Company believes that the terms it obtained from affiliated parties in
the above transactions are comparable to those it could have obtained from
unaffiliated parties in similar transactions.

40
<PAGE>

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth certain information regarding the pro forma
beneficial ownership of the Company's Common Stock at the date of this
Prospectus, assuming, where relevant, the conversion into Common Stock of the
Series A Preferred and Notes, and as adjusted to reflect the sale of the shares
of Common Stock being offered hereby, by: (i) each stockholder who is known by
the Company to beneficially own more than 5% of the currently outstanding shares
of Common Stock; (ii) each of the Company's Directors and executive officers;
(iii) all Company's Directors and executive officers of the Company as a group;
and (iv) the Selling Stockholders.

SHARES BENEFICIALLY OWNED NUMBER OF SHARES BENEFICIALLY
PRIOR TO THE OFFERING SHARES BEING OWNED AFTER THE OFFERING(a)
------------------------- ---------------------------
NAME AND ADDRESS OF
BENEFICIAL OWNER NUMBER PERCENT OFFERED NUMBER PERCENT

<S> <C> <C> <C> <C> <C>
Richard T. Fedor (b)(c). . . . . . . . 2,995,659 43.1% 30,000 2,965,659 29.0%
Gary R. Held (d). . . . . . . . . . . . 1,035,000 20.1 150,000 885,000 10.5
Clarence H. Thiesen (e) . . . . . . . . 535,000 10.4 100,000 435,000 5.2
Andrejs K. Bunkse (f) . . . . . . . . . 40,000 * 10,000 30,000 *
Conrad J. Granito . . . . . . . . . . . - * - - *
Bonnie G. Fedor (g) . . . . . . . . . . 2,995,659 43.1 - 2,965,659 29.0
CJB Family Trust (h). . . . . . . . . . 1,288,467 25.2 150,000 1,138,467 13.6
Vern D. Blanchard (i) . . . . . . . . . 1,423,467 27.1 - 1,273,467 15.0
Susan E. Held (j) . . . . . . . . . . . 1,035,000 20.1 - 885,000 10.5
Mara Thiesen(k) . . . . . . . . . . . . 535,000 10.4 435,000 5.2
Kenneth Fedor (l) . . . . . . . . . . . 275,000 5.5 - 275,000 3.3
Emilie Fedor (m). . . . . . . . . . . . 275,000 5.5 - 275,000 3.3
All directors and executive
officers as a group
(7 persons) . . . . . . . . . . . . . . 4,628,326 63.9% 290,000 4,338,326 41.3%

</TABLE>

* Less than one percent.

The address of each person, trust or trustee is c/o the Company, 2209 W. 1st
Street, Suite 113-114, Tempe, Arizona 85281.

(a) Assumes no exercise of the Underwriters' over-allotment option. If
the over-allotment option is exercised, three of the Selling
Stockholders will each sell up to an additional 50,000 shares of
Common Stock and the Company will sell up to an additional 406,500
shares of Common Stock, PRO RATA.

(b) Includes (i) 492,000 shares of Common Stock issuable upon the exercise
of stock options granted November 1, 1996 and currently exercisable
and (ii) 575,000 shares (8.3% prior to the offering; 5.6% after the
offering) owned of record by Mr. Fedor's wife and minor children. Mr.
Fedor is the husband of Bonnie G. Fedor. Mr. Fedor disclaims
beneficial ownership of shares owned by Mrs. Fedor.

(c) Includes 1,437,534 shares at October 31, 1997, to be issuable upon
conversion of the Fedor Note, at a price of $1.00 per share, prior to
completion of this offering. See "Certain Relationships and Related
Party Transactions."
(d) Includes (i) 135,000 shares of Common Stock issuable upon the exercise
of stock options granted

41
<PAGE>

November 1, 1996 and currently exercisable and (ii) 400,000 shares
(7.8% prior to the offering; 4.7% after the offering) owned of record
by Mr. Held's wife and minor child. Mr. Held is the husband of Susan
E. Held. Mr. Held disclaims beneficial ownership of shares owned by
Mrs. Held.

(e) Includes (i) 135,000 shares of Common Stock issuable upon the exercise
of stock options granted November 1, 1996 and currently exercisable
and (ii) 110,000 shares (2.1% prior to the offering; 1.3% after the
offering) owned of record by Mr. Thiesen's wife. Mr. Thiesen is the
husband of Mara Thiesen. Mr. Thiesen disclaims beneficial ownership
of shares owned by Mrs. Thiesen.

(f) Mr. Bunkse is the son of Mara Thiesen.
(g) Mrs. Fedor is the wife of Richard T. Fedor. Mrs. Fedor disclaims
beneficial ownership of shares owned by Mr. Fedor.
(h) Includes 88,467 shares at October 31, 1997 issuable upon conversion
at a price of $1.00 per share, prior to completion of this offering,
of the Trust Note. See "Certain Relationships and Related Party
Transactions."

(i) Represents shares owned by the CJB Family Trust. Vern D. Blanchard is
the sole trustee of the trust and has sole voting power and investment
power with respect to the Common Stock held by the trust. In
addition, includes 135,000 shares of Common Stock issuable upon the
exercise of stock options granted to Mr. Blanchard November 1, 1996
and currently exercisable.

(j) Mrs. Held is the wife of Gary R. Held. Mrs. Held disclaims beneficial
ownership of shares owned by Mr. Held.

(k) Mrs. Thiesen is the wife of Clarence H. Thiesen and the mother of
Andrejs K. Bunkse. Mrs. Thiesen disclaims beneficial ownership of
shares owned by Mr. Thiesen.

(l) Mr. Fedor is the brother of Richard T. Fedor.
(m) Mrs. Fedor is the wife of Kenneth Fedor.

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<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this offering, the Company will have 9,595,713 shares of
Common Stock outstanding. All of the shares offered hereby will be freely
tradeable without restriction or registration under the Securities Act, unless
acquired by an "affiliate" of the Company as that term is defined in Rule 144,
which shares will unless registered be subject to resale limitations of Rule 144
described below.

In connection with the Private Placement, the Company granted certain
"demand" and "piggyback" registration rights to the holders of any Common Stock
issuable upon conversion of the Series A Preferred (which will occur upon
completion of this offering). The demand registration right may not be
exercised prior to one year after completion of this offering. See
"Underwriting."

In general, under Rule 144 as currently in effect, a stockholder who has
beneficially owned for at least one year shares privately acquired directly or
indirectly from the Company or from an affiliate of the Company, and persons who
are affiliates of the Company who have acquired the shares in registered
transactions, will be entitled to sell within any three-month period a number of
shares that does not exceed the greater of: (i) one percent of the outstanding
shares of Common Stock (approximately 95,957 shares upon completion of this
offering); or (ii) the average weekly trading volume in the Common Stock during
the four calendar weeks preceding such sale. Sales under Rule 144 are also
subject to certain requirements relating to the manner and notice of sale and
the availability of current public information about the Company. See "Risk
Factors -- Shares Eligible for Future Sales."

The Company, the Selling Stockholders and the directors and executive
officers of the Company have agreed not to offer, pledge, sell, sell an option
or contract to purchase, purchase an option or contract to sell, contract to
sell, grant any option, right or warrant to purchase, or otherwise transfer or
dispose of, directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock, or enter into
any swap or other arrangement that in any manner transfers all or a portion of
the economic consequences associated with the ownership of such Common Stock, or
to cause a registration statement covering any shares of Common Stock to be
filed, for 180 days after the date of this Prospectus without the prior written
consent of DLJ, provided that the Company may grant options pursuant to the
Stock Option Plan, and issue shares of Common Stock upon the exercise of
outstanding options. See "Underwriting."

Prior to this offering, there has been no established trading market for
the Common Stock. No predictions can be made with respect to the effect, if
any, that public sales of shares of the Common Stock or the availability of
shares for sale will have on the market price of the Common Stock after the
completion of this offering. Sales of substantial amounts of Common Stock in
the public market following this offering, or the perception that such sales may
occur, could adversely affect the market price of the Common Stock or the
ability of the Company to raise capital through sales of its equity securities.
See "Risk Factors--No Prior Public Market."

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<PAGE>

DESCRIPTION OF CAPITAL STOCK

The authorized capital stock of the Company consists of 40,000,000 shares
of Common Stock and 5,000,000 shares of preferred stock, par value $.001 per
share (the "Preferred Stock"). The following summary description of the capital
stock of the Company does not purport to be complete and is subject to the
detailed provisions of, and qualified in its entirety by reference to, the
Certificate of Incorporation and Amended and Restated Bylaws (the "Bylaws"),
copies of which have been filed as exhibits to the registration statement of
which this Prospectus forms a part, and to the applicable provisions of the
DGCL. See "Underwriting."

COMMON STOCK

The holders of Common Stock are entitled to one vote for each share held of
record on all matters submitted to a vote of the stockholders. Subject to the
rights of any holders of Preferred Stock, holders of Common Stock are entitled
to receive ratably such dividends as may be declared by the Board of Directors
out of funds legally available. The Company does not anticipate paying any cash
dividends in the foreseeable future. See "Dividend Policy." In the event of a
liquidation, dissolution or winding up of the Company, holders of the Common
Stock are entitled to share ratably in the distribution of all assets remaining
after payment of liabilities, subject to the rights of any holders of Preferred
Stock. The holders of Common Stock have no preemptive rights to subscribe for
additional shares of the Company and no right to convert their Common Stock into
any other securities. In addition, there are no redemption or sinking fund
provisions applicable to the Common Stock. All of the outstanding shares of
Common Stock are, and the Common Stock offered hereby will be, validly issued,
fully-paid and nonassessable.

PREFERRED STOCK

The Board of Directors is authorized to issue from time to time, without
stockholder approval, in one or more designated series, any or all shares of
authorized Preferred Stock and to fix the rights, preferences, privileges and
restrictions thereof, including dividend rights, conversion rights, voting
rights, terms of redemption, liquidation preferences and the number of shares
constituting any series. The issuance of Preferred Stock could adversely affect
the voting power of holders of Common Stock and could have the effect of
delaying, deferring or impeding a change in control of the Company. At the date
of this Prospectus, the Company has issued and outstanding 400,000 shares of
Series A Preferred Stock, which by its terms, will convert into an equal number
of shares of Common Stock upon the completion of this offering.

CERTAIN PROVISIONS OF DELAWARE LAW

The Company is a Delaware corporation and is subject to Section 203 of the
DGCL. In general, Section 203 prevents an "interested stockholder" (defined
generally as a person owning 15% or more of a corporation's outstanding voting
stock) from engaging in a "business combination" (as defined) with a Delaware
corporation for three years following the date such person became an interested
stockholder unless (i) before such person became an interested stockholder, the
board of directors of the corporation approved the transaction in which the
interested stockholder became an interested stockholder or approved the business
combination, (ii) upon consummation of the transaction that resulted in the
interested stockholder becoming an interested stockholder, the interested
stockholder owns at least 85% of the voting stock of the corporation outstanding
at the time the transaction commenced (excluding shares owned by persons who are
both officers and directors of the corporation and shares held by certain
employee stock ownership plans) or (iii) following the transaction in which such
person became an interested stockholder, the business combination is approved by
the board of directors of the corporation and authorized at a meeting of
stockholders by the affirmative vote of the holders of at least two-thirds of
the outstanding voting stock of the corporation not owned by the interested
stockholder.

LIMITATION OF LIABILITY AND INDEMNIFICATION

The Company's Bylaws provide that, to the fullest extent permitted by the

<PAGE>

DGCL, a director of the Company shall not be liable to the Company or its
stockholders for monetary damages for breach of fiduciary duty as a director.
Under the DGCL, liability of a director may not be limited (i) for any breach of
the director's duty of loyalty to the Company or its stockholders, (ii) for acts
or omissions not in good faith or that involve intentional misconduct or a
knowing violation of law, (iii) in respect of certain unlawful dividend payments
or stock redemptions or repurchases and (iv) for any transaction from which the
director derives an improper personal benefit. The effect of the provisions of
the Company's Bylaws is to eliminate the rights of the Company and its
stockholders (through stockholders' derivative suits on behalf of the Company)
to recover monetary damages against a director for breach of the fiduciary duty
of care as a director (including breaches resulting from negligent or grossly
negligent behavior), except in the situations described in clauses (i) through
(iv) above. This provision does not limit or eliminate the rights of the
Company or any stockholder to seek nonmonetary relief such as an injunction or
rescission in the event of a breach of a director's duty of loyalty. In
addition, the Company's Bylaws provide that the Company shall indemnify its
directors and officers against losses incurred by any such person by reason of
the fact that such person was acting in such capacity.

The Company maintains an insurance policy which pays the losses of the
Company's directors and officers, and the losses of the Company to the extent it
has indemnified the directors and officers for liabilities arising from acts of
the directors and officers in their respective capacities as such.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Common Stock is ChaseMellon Shareholder
Services, LLC.

<PAGE>

UNDERWRITING

Subject to certain terms and conditions contained in an underwriting
agreement (the "Underwriting Agreement"), the Underwriters named below, for whom
DLJ and Prudential Securities Incorporated are serving as representatives (the
"Representatives"), have severally agreed to purchase from the Company and the
Selling Stockholders the respective number of shares of Common Stock set forth
opposite their names below:

NUMBER OF
UNDERWRITERS SHARES
------------ ---------
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION

Prudential Securities Incorporated

Total

The Underwriting Agreement provides that the obligations of the several
Underwriters to purchase shares of Common Stock are subject to the approval of
certain legal matters by counsel and to certain other conditions. If any of the
shares of Common Stock are purchased by the Underwriters pursuant to the
Underwriting Agreement, all of the shares of Common Stock (other than the shares
of Common Stock covered by the Underwriters' over-allotment option described
below) must be so purchased.

Prior to this offering, there has been no established trading market for
the Common Stock. The initial price to the public for the Common Stock offered
hereby has been determined by negotiation between the Company and the
Representatives. The factors considered in determining the initial price to the
public included the history of and the prospects for the industry in which the
Company competes, the performance and ability of the Company's management, the
past and present operations of the Company, the historical results of operations
of the Company, the prospects for future earnings of the Company, the general
condition of the securities markets at the time of this offering and the recent
market prices of securities of generally comparable companies.

The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act, or to contribute to payments that the Underwriters may be
required to make in respect thereof.

The Company has been advised by the Representatives that the Underwriters
propose to offer the shares of Common Stock to the public initially at the price
to the public set forth on the cover page of this Prospectus and to certain
dealers (who may include the Underwriters) at such price less a concession not
to exceed $ per share. The Underwriters may allow, and such dealers may
reallow, discounts not in excess of $ per share to any other Underwriter
and certain other dealers. After this offering, the offering price and other
selling terms may be changed by the Underwriters.

The Company and the Selling Stockholders have granted to the Underwriters
an option to purchase up to an aggregate of 556,500 additional shares of Common
Stock, at the initial public offering price less underwriting discounts and
commissions, solely to cover over-allotments. If such option is exercised,
three of the Selling Stockholders will each sell up to an additional 50,000
shares of Common Stock and the Company will sell up

<PAGE>

to an additional 406,500 shares of Common Stock, PRO RATA. See "Principal and
Selling Stockholders." Such option may be exercised in whole or in part from
time to time during the 30-day period after the date of this Prospectus. To the
extent that the Underwriters exercise such option, each of the Underwriters will
be committed, subject to certain conditions, to purchase from certain of the
Selling Stockholders and the Company a number of option shares proportionate to
such Underwriter's initial commitment as indicated in the preceding table.

The Underwriters have reserved up to 5% of the shares of Common Stock
offered hereby for sale at the initial public offering price to certain
employees, consultants and other persons associated with the Company. The
number of shares of Common Stock available for sale to the general public will
be reduced to the extent such persons purchase such reserved shares. Any
reserved shares not so purchased may be offered by the Underwriters to the
general public on the same basis as the other shares offered hereby. This
program will be administered by DLJ.

The Company, Selling Stockholders, and the directors and executive officers
of the Company have agreed not to offer, pledge, sell, contract to sell, sell an
option or contract to purchase, purchase an option or contract to sell, grant
any option, right or warrant to purchase, or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock, or enter into
any swap or other arrangement that in any manner transfers all or a portion of
the economic consequences associated with the ownership of such Common Stock, or
to cause a registration statement covering any shares of Common Stock to be
filed, for 180 days after the date of this Prospectus without the prior written
consent of DLJ, provided that the Company may grant options pursuant to the
Stock Option Plan, and issue shares of Common Stock upon the exercise of
outstanding options. See "Shares Eligible for Future Sale."

In connection with this offering, the Underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of the
Common Stock. Specifically, the Underwriters may overallot the offering,
creating a syndicate short position. In addition, the Underwriters may bid for
and purchase shares of Common Stock in the open market to cover syndicate short
positions or to stabilize the price of the Common Stock. Finally, the
underwriting syndicate may reclaim selling concessions from syndicate members in
this offering, if the syndicate repurchases previously distributed Common Stock
in syndicate covering transactions, in stabilization transactions or
otherwise. Any of these activities may stabilize or maintain the market price
of the Common Stock above independent market levels. The Underwriters are not
required to engage in these activities, and may end any of these activities at
any time.

The Representatives have informed the Company that they do not expect to
make sales to accounts over which they exercise discretionary authority in
excess of 5% of the number of shares of Common Stock offered hereby.

Certain affiliates of DLJ purchased 133,333 shares of the 400,000 shares of
Series A Preferred issued and sold on September 2, 1997, which shares are
convertible into Common Stock on a one-for-one basis. DLJ received a fee of
$150,000 in connection therewith and for financial advisory and other services
which included assistance in analyzing the Company, preparing and implementing a
strategic plan for the Company and structuring the transaction, plus
reimbursement of expenses. The purchase price paid by DLJ affiliates was $7.50
per share, the same as that paid by all other investors.

The Company has filed an application for quotation and trading of the
Common Stock on The Nasdaq National Market under the symbol "GMTC."

LEGAL MATTERS

The validity of the shares of the Common Stock offered hereby will be
passed upon for the Company by Morgan, Lewis & Bockius LLP, Los Angeles,
California. Certain legal matters will be passed upon for the

<PAGE>

Underwriters by Skadden, Arps, Slate, Meagher & Flom LLP, Los Angeles,
California.

EXPERTS

The financial statements of the Company at July 31, 1997, October 31, 1996
and 1995 and for the nine months ended July 31, 1997, the years ended October
31, 1996 and 1997 and the period from inception (April 18, 1994) through
October 31, 1994, appearing in this Prospectus and Registration Statement
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon appearing elsewhere herein, and are included in reliance
upon such report given upon the authority of such firm as experts in accounting
and auditing.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-1 (the "Registration
Statement") under the Securities Act and the rules and regulations promulgated
thereunder, covering the Common Stock offered hereby. This Prospectus (which
constitutes a part of the Registration Statement) omits certain information
contained in the Registration Statement as permitted by the rules and
regulations of the Commission, and reference is made to the Registration
Statement, and the exhibits and schedules thereto for further information with
respect to the Company and the Common Stock offered hereby. Statements
contained in this Prospectus as to the contents of any contract, agreement or
other document filed as an exhibit to the Registration Statement are not
necessarily complete, and in each instance, reference is made to the exhibit for
a more complete description of the matter involved, each such statement being
qualified in its entirety by such reference. The Registration Statement may be
inspected and copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, NW, Washington, D.C. 20549 and
at the regional offices of the Commission maintained at 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661 and Seven World Trade Center, Suite 1300,
New York, New York 10048. Copies of such materials may be obtained from the
Public Reference Section of the Commission, Room 1024, Judiciary Plaza, 450
Fifth Street, NW, Washington, D.C. 20549, at prescribed rates. In addition,
registration statements and certain other filings made with the Commission
through its Electronic Data Gathering, Analysis and Retrieval ("EDGAR") system
are publicly available through the Commission's site on the Internet's World
Wide Web, located at http://www.sec.gov. The Registration Statement, including
all exhibits thereto and amendments thereof, has been filed with the Commission
through EDGAR.

The Company intends to furnish its stockholders with annual reports, which
will include audited financial statements prepared in accordance with accounting
principles generally accepted in the United States and a report of its
independent public accountants with respect to the examination of such financial
statements. In addition, the Company will make available to or furnish its
stockholders with such other interim reports as the Company deems appropriate or
as may be required by law.

<PAGE>

GAMETECH INTERNATIONAL, INC.

INDEX TO FINANCIAL STATEMENTS

PAGE
----
Report of Ernst & Young LLP, Independent Auditors...........................F-2
Balance Sheets..............................................................F-3
Statements of Operations....................................................F-4
Statements of Stockholders' Equity (Deficit)................................F-5
Statements of Cash Flows....................................................F-6
Notes to Financial Statements...............................................F-7

F-1

<PAGE>

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

The Board of Directors and Stockholders
GameTech International, Inc.

We have audited the accompanying balance sheets of GameTech International, Inc.
as of October 31, 1995, and 1996 and July 31, 1997 and the related statements of
operations, stockholders' equity (deficit), and cash flows for the period from
inception (April 18, 1994) through October 31, 1994, the years ended October 31,
1995 and 1996 and the nine months ended July 31, 1997. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of GameTech International, Inc. at
October 31, 1995, and 1996 and July 31, 1997 and the results of its operations
and its cash flows for the period from inception (April 18, 1994) through
October 31, 1994, the years ended October 31, 1995 and 1996 and the nine
months ended July 31, 1997, in conformity with generally accepted accounting
principles.

ERNST & YOUNG LLP

Sacramento, California
September 12, 1997

F-2

<PAGE>

BALANCE SHEETS

PRO FORMA
CASH, CONVERTIBLE NOTES
PAYABLE AND
STOCKHOLDERS'
EQUITY
AT JULY 31, 1997
OCTOBER 31, JULY 31, (NOTE 8)
------------------------------------------------------------------
1995 1996 1997 (UNAUDITED)

<S> <C> <C> <C> <C>
ASSETS:
Current assets:
Cash $ 37,027 $ 166,119 $ 214,682 $ 3,049,682
-----------
-----------
Accounts receivable, less allowance for
doubtful accounts of $24,000 in 1995
$102,000 in 1996 and $170,000 in 1997 244,714 546,356 1,114,147
Deposits 258,200 276,622 1,044,127
Prepaids 42,425 32,572 56,748
------------------------------------------
Total current assets 582,366 1,021,669 2,429,704

Bingo units, furniture and equipment, net 1,869,839 4,294,337 6,965,768
Intangibles, less accumulated amortization of
$78,000 in 1995, $136,000 in 1996 and
$207,000 in 1997 330,473 394,364 398,386

Investment in and advances to affiliate - - 128,340
------------------------------------------
Total assets $ 2,782,678 $ 5,710,370 $ 9,922,198
------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Short-term borrowings from bank $ 14,200 $ 1,866,793 $ 1,100,000
Accounts payable 284,540 52,532 150,064
Accrued payroll and related obligations 35,950 150,273 293,458
Other accrued liabilities 38,525 35,166 102,241
Income taxes payable 28,907 134,216 134,247
Current portion of convertible notes payable to
officers, including accrued interest 217,141 168,183 -
Current portion of long-term debt - - 1,245,562
Total current liabilities 619,263 2,407,163 3,025,572

Convertible notes payable to officers, including
accrued interest 1,074,319 1,362,662 1,475,888 $ -
-----------
-----------
Long-term debt - - 2,001,079
Deferred income taxes 109,207 155,207 152,190
Commitments and contingencies

Stockholders' equity:
Preferred stock, $.001 par value;
5,000,000 shares authorized; none issued - - - $ -
Common stock, $.001 par value;
40,000,000 shares authorized; 5,109,875
shares issued and outstanding in 1995,
5,181,575 in 1996, 4,449,825 in 1997 and
6,325,713 pro forma 5,110 5,182 4,450 6,326
Capital in excess of par value 557,865 558,510 34,095 4,343,107
Retained earnings 416,914 1,221,646 3,228,924 3,228,924
---------------------------------------------------------
Total stockholders' equity 979,889 1,785,338 3,267,469 $ 7,578,357
---------------------------------------------------------
-----------
Total liabilities and stockholders' equity $2,2782,678 $ 5,710,370 $ 9,922,198
---------------------------------------------------------
---------------------------------------------------------

</TABLE>

See accompanying notes

F-3

<PAGE>

GAMETECH INTERNATIONAL, INC.
STATEMENTS OF OPERATIONS

PERIOD FROM
INCEPTION
(APRIL 18,
1994) THROUGH YEARS ENDED OCTOBER 31, NINE MONTHS ENDED JULY 31,
OCTOBER 31, ----------------------- -----------------------------
1994 1995 1996 1996 1997
------------------------------------------ -------------- -------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues $ 598,779 $ 3,349,611 $ 5,364,017 $ 3,545,252 $ 8,891,615

Operating Expenses:
Cost of revenues 253,165 711,603 1,614,562 1,146,977 2,244,376
General and administrative 220,473 693,049 1,019,919 716,996 1,347,806
Sales and marketing 148,693 551,844 613,503 425,101 982,659
Research and development 93,689 329,104 477,482 339,634 384,890
-------------------------------------------- -------------
716,020 2,285,600 3,725,466 2,628,708 4,959,731
-------------------------------------------- -------------
Income (loss) from operations (117,241) 1,064,011 1,638,551 916,544 3,931,884

Interest expense (59,881) (195,890) (279,032) (198,018) (346,279)
Equity in net loss of affiliate - - - - (42,205)
Other income (expense), net 1,714 2,315 4,430 (3,239) 27,185
-------------------------------------------- -------------
Income (loss) before provision
(175,408) 870,436 1,363,949 715,287 3,570,585
Provision for income taxes - 278,114 559,217 293,268 1,416,000
-------------------------------------------------------------------------
Net income (loss) $ (175,408) $ 592,322 $ 804,732 $422,019 $ 2,154,585
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Primary net income
(loss) per share $ (.13) $ .10 $ .12 $ .07 $ .38
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Fully diluted net income $ (.13) $ .10 $ .11 $ .06 $ .32
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Shares used in
calculation of net
income (loss) per
share:
Primary 1,346,614 5,767,260 6,464,131 6,457,600 5,646,300
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Fully diluted 2,282,889 7,115,326 7,888,854 7,806,385 7,090,512
-------------------------------------------------------------------------
-------------------------------------------------------------------------

</TABLE>

F-4

<PAGE>

GAMETECH INTERNATIONAL, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

COMMON STOCK CAPITAL IN RETAINED TOTAL
--------------------------- EXCESS OF PAR EARNINGS STOCKHOLDERS'
SHARES AMOUNT VALUE (DEFICIT) EQUITY (DEFICIT)
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balances at inception (April 18, 1994) - $ - $ - $ - $ -
Net loss - - - (175,408) (175,408)
---------------------------------------------------------------------------------
Balances at October 31, 1994 - - - (175,408) (175,408)
Issuance of founders' stock 4,570,000 4,570 18,530 - 23,100
Conversion of convertible notes payable
into common stock 439,875 440 439,435 - 439,875

Issuance of common stock for cash 100,000 100 99,900 - 100,000
Net income - - - 592,322 592,322
---------------------------------------------------------------------------------
Balances at October 31, 1995 5,109,875 5,110 557,865 416,914 979,889
Issuance of common stock upon exercise 717
of stock options at $.01 per share 71,700 72 645 -

Net income - - - 804,732 804,732
---------------------------------------------------------------------------------
Balances at October 31, 1996 5,181,575 5,182 558,510 1,221,646 1,785,338
Repurchase and cancellation of common
stock (1,000,000) (1,000) (558,510) (147,307) (706,817)
Common stock issued in exchange for
services 5,500 5 5,495 - 5,500
Issuance of common stock upon exercise
of stock options at $.01 per share
236,250 236 2,127 - 2,363

Conversion of convertible notes payable
into common stock 26,500 27 26,473 - 26,500
Net income - - - 2,154,585 2,154,585
---------------------------------------------------------------------------------
Balances at July 31, 1997 4,449,825 $ 4,450 $ 34,095 $ 3,228,924 $3,267,469
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

</TABLE>

See accompanying notes
F-5

<PAGE>

GAMETECH INTERNATIONAL, INC.
STATEMENTS OF CASH FLOWS

Period from
inception
(April 18,
1994) through YEARS ENDED OCTOBER 31, NINE MONTHS ENDED JULY 31,
October 31, ----------------------- -----------------------------
1994 1995 1996 1996 1997
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (175,408) $ 592,322 $ 804,732 $ 422,019 $ 2,154,585
Adjustments to reconcile net income (loss)
to net cash (used in) provided by
operating activities:
Depreciation and amortization 62,583 282,433 599,458 395,566 979,101
Accrued interest payable to officers 59,258 195,890 164,363 117,112 139,726
Deferred income taxes - 109,207 46,000 - (3,017)
Equity in net loss of affiliates - - - - 42,205
Changes in operating assets and liabilities:
Accounts receivable, net 79,880 (177,469) (301,642) (84,290) (567,791)
Deposits - (258,200) (18,422) 250,791 (767,505)
Prepaids and other current assets (5,384) (37,041) 9,853 36,604 (24,176)
Accounts payable 23,107 261,433 (232,008) (174,275) 97,532
Accrued payroll and related obligations (89,712) 35,950 114,323 51,285 143,185
Other accrued liabilities (17,187) 20,329 (3,359) (35,537) 67,075
Income taxes payable 28,907 105,309 88,114 31
----------------------------------------------------------------------------

Net cash (used in) provided by operating activities (62,863) 1,053,761 1,288,607 1,067,389 2,260,951

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures for bingo units, furniture
and equipment (461,543) (1,251,001) (2,965,612) (2,029,794) (3,579,973)
Capitalized software development costs - - (122,235) (46,800) (74,581)
Investment in and advances to affiliate - - - - (170,545)
----------------------------------------------------------------------------

Net cash used in investing activities (461,543) (1,251,001) (3,087,847) (2,076,594) (3,825,099)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from short-term borrowings from bank - 14,200 2,360,493 994,723 2,580,000
Payments on short-term notes payable and
borrowings from bank (288,342) (132,222) (507,900) - (750,000)
Proceeds from borrowings on convertible
notes payable to officers 846,000 339,967 100,000 - -
Payments on convertible notes payable to
officers (8,125) (114,405) (24,978) (15,000) -
Proceeds from issuance of long-term debt - - - - 403,207
Payments on long-term debt - - - - (378,359)
Payment for repurchase of common stock and

See accompanying notes
F-6

<PAGE>

Period from
inception
(April 18,
1994) through YEAR ENDED NINE MONTHS
October 31, OCTOBER 31, ENDED JULY 31, NINE MONTHS ENDED JULY 31,
1994 1995 1996 1996 1997
(UNAUDITED)
cancellation of a note payable to an officer - - - - (250,000)
Proceeds from sales of common stock - 101,600 717 50 7,863
---------------------------------------------------------------------------
Net cash provided by financing activities 549,533 209,140 1,928,332 979,773 1,612,711
---------------------------------------------------------------------------
Net increase (decrease) in cash 25,127 11,900 129,092 (29,432) 48,563
Cash at beginning of period - 25,127 37,027 37,027 166,199
---------------------------------------------------------------------------
Cash at end of period $25,127 $ 37,027 $ 166,119 $ 7,595 $ 214,682
---------------------------------------------------------------------------

Supplement disclosure of cash flow information:
Cash paid for interest $ - $ - $ 109,000 $ 71,000 $ 183,000
Cash paid for income taxes $ - $140,000 $ 410,000 $206,000 $1,419,000

Supplemental schedule of non-cash transactions:
Conversion of convertible notes payable to
common stock $ - $461,375 $ - $ - $ 26,500

</TABLE>

F-7

<PAGE>

GAMETECH INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
(Information with respect to the nine months
ended July 31, 1996 is unaudited)

1. SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

GameTech International, Inc. (the "Company") was incorporated in Delaware
on April 18, 1994. The Company manufactures and leases electronic bingo units
under long-term or month-to-month arrangements. The Company's fiscal year ends
on October 31.

INTERIM FINANCIAL INFORMATION

The July 31, 1996 interim financial information is unaudited. In the
opinion of management, all adjustments considered necessary for a fair
presentation of its results of operations and its cash flows for the nine months
ended July 31, 1996 have been included. All adjustments to the July 31, 1996
interim financial information were of a normal recurring nature and in the
opinion of management are consistent with the adjustments made in the financial
statements for the period from inception (April 18, 1994) through October 31,
1994, the fiscal years ended October 31, 1995 and 1996 and the nine months ended
July 31, 1997. The Company's operating results for the nine months ended
July 31, 1997, should not be considered indicative of the results that may be
expected for the fiscal year ending October 31, 1997.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

BINGO UNITS, FURNITURE AND EQUIPMENT

Bingo units, furniture and equipment are stated at cost and depreciated
using the straight-line method over estimated useful lives of the assets.

The estimated useful lives are as follows:

Bingo units - 5 years
Office furniture and equipment - 5-7 years
Leasehold improvements - 5 years

SUPPLIER

Certain of the Company's bingo units are purchased from only one supplier.
Any interruption in this supply source could impact the Company's ability to
meet customer demand and in turn adversely affect future operating results.

F-8
<PAGE>

INTANGIBLES

The excess of cost over fair value of net assets of businesses acquired is
amortized on a straight-line basis over seven years. Also included in
intangibles is capitalized software development costs of approximately $122,000
and $197,000 at October 31, 1996 and July 31, 1997, respectively, which are
being amortized on a straight-line basis over three years beginning when the
developed products were available for general release. Amortization of
capitalized software development costs during the nine months ended July 31,
1997 amounted to approximately $27,000 (none previously).

INVESTMENT IN JOINT VENTURE

The Company has a 50% interest in The Satellite Bingo Network, LLC.
("TSBN") which is accounted for using the equity method. TSBN was formed on
April 8, 1997. The Company's initial investment in TSBN was $50,000 and the
Company's equity share of TSBN's operating losses through July 31, 1997 was
approximately $42,000. The Company to-date has funded the operating losses of
TSBN and consequently will record 100% of TSBN's future operating losses, if
any. In addition, through July 31, 1997, the Company had advanced TSBN
approximately $121,000 to fund planning and development costs.

LONG-LIVED ASSETS

The Company has adopted the provisions of the Financial Accounting
Standards Board Statement of Financial Accounting No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of"
("SFAS 121"). SFAS 121 requires impairment losses to be recognized for
long-lived assets and identifiable intangibles used in operations when
indicators of impairment are present and the estimated undiscounted cash flows
are not sufficient to recover the assets' carrying amount. The impairment loss
is measured by comparing the fair value of the asset to its carrying amount.
The excess of cost over fair value of net assets of businesses acquired is
included in impairment evaluations when events or circumstances exists that
indicate the carrying amount of the acquired assets may not be recoverable.

FINANCIAL INSTRUMENTS

The carrying values of the Company's short-term borrowings from banks
(Note 3), long-term debt (Notes 3 and 6) and convertible notes payable to
officers (Note 4) approximate their fair values at October 31, 1995 and 1996 and
July 31, 1997, based on current incremental borrowing rates for similar types
of borrowing arrangements.

REVENUE RECOGNITION, SIGNIFICANT CUSTOMERS AND CONCENTRATIONS OF CREDIT RISK

Revenues are based on either a percentage of gaming revenues earned per
bingo unit at customer locations or a fixed rate per bingo session as defined in
the contract.

The Company's customer base currently consists of bingo halls on tribal
Indian lands and charity bingo operations located throughout the United States.
The Company generally does not require collateral. Management believes that
adequate allowances for credit losses have been provided.

During the period from inception (April 18, 1994) through October 31, 1994,
four customers comprised 28%, 23%, 10% and 10% of total revenues. During the
year ended October 31, 1995, two customers comprised 21% and 17% of total
revenues. During the year ended October 31, 1996 and during the nine months
ended July 31, 1996 and 1997 no single customer comprised more than 10% of total
revenues.

ADVERTISING COSTS

Advertising costs are expensed as incurred. Advertising costs during the
period from inception (April 18,

F-9
<PAGE>

1994) through October 31, 1994, the years ended October 31, 1995 and 1996 and
the nine months ended July 31, 1996 and 1997 were not material.

F-10
<PAGE>

ACCOUNTING FOR STOCK BASED COMPENSATION

The Company accounts for its stock options (Note 6) in accordance with the
provisions of the Accounting Principles Board's Opinion No. 25 (APB 25),
"Accounting for Stock Issued to Employees." In 1995, the Financial Accounting
Standards Board released Statement of Financial Accounting Standard No. 123
(SFAS 123), "Accounting for Stock Based Compensation." SFAS 123 provides an
alternative to APB 25 and is effective for fiscal years beginning after
December 15, 1995. The Company expects to continue to account for its stock
options in accordance with APB 25. Accordingly, SFAS 123 is not expected to
have a material impact on the Company's financial position or results of
operations.

NET INCOME (LOSS) PER SHARE OF COMMON STOCK

The Company's net income (loss) per share is based upon the
weighted average number of shares of common stock outstanding including dilutive
common equivalent shares from stock options using the treasury stock method. In
addition, the number of shares used in the calculation of fully diluted net
income (loss) per share also includes the weighted average common equivalent
shares outstanding as if the convertible notes payable to officers were
converted to common stock on their original dates of issue after giving effect
to the elimination of interest expense. Except as noted below, common stock
issuable upon the exercise of stock options have been excluded from the
computation if their inclusion was antidilutive. Pursuant to SAB No. 83, shares
of common stock issued, and shares issuable from stock options granted by the
Company, during the twelve months immediately preceding the assumed offering
date at prices below the assumed initial public offering price (using the
treasury stock method and the assumed initial public offering price of $12.00
per share), have been included in the number of shares used in the calculation
of historical net income (loss) per share as if they were outstanding for all
periods presented.

SUPPLEMENTARY NET INCOME PER SHARE DATA

In connection with the Company's planned initial public offering (Note 6),
the Company intends to use a portion of the net proceeds to repay short-term
borrowings from banks and long-term debt. The following reflects supplementary
net income per share data as if the short-term borrowings and long-term debt
transactions as described occurred on November 1, 1995, and the shares used in
the calculation of supplementary net income per share reflect only the increase
in the number of shares necessary on a net proceeds basis to repay the
short-term borrowings and long-term debt:

F-11
<PAGE>

YEAR ENDED NINE MONTHS
OCTOBER 31, 1996 ENDED JULY 31, 1997
---------------------------------------
SUPPLEMENTARY NET INCOME:
Primary............................ $ 879,938 $2,278,383
--------------------------------
--------------------------------
Fully diluted...................... 976,913 2,361,021
---------- ----------
---------- ----------
SUPPLEMENTARY NET INCOME PER SHARE:
Primary............................ $ .13 $ .38
--------------------------------
--------------------------------
Fully diluted...................... .12 .32
---------- ----------
---------- ----------
SHARES USED IN THE CALCULATION OF
SUPPLEMENTARY NET INCOME PER SHARE:
Primary............................ 6,860,000 6,042,169
--------------------------------
--------------------------------
Fully diluted...................... 8,284,723 7,486,381
---------- ----------
---------- ----------

In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, "Earnings per Share," which is required for both interim
and annual periods ending after December 15, 1997. At that time, the Company
will be required to change the method currently used to compute earnings per
share and to restate all prior periods. Under the new requirements for
calculating primary earnings per share, the dilutive effect of stock options
will be excluded. The impact of Statement No. 128 on the calculation of primary
and fully diluted earnings per share is not expected to be material.

RECLASSIFICATIONS

Certain reclassifications have been made to the 1994, 1995 and 1996
financial statements to conform to the 1997 presentation.

2. BINGO UNITS, FURNITURE AND EQUIPMENT

Bingo units, furniture and equipment consist of the following:

OCTOBER 31,
------------------------- JULY 31,
1995 1996 1997
-----------------------------------------
Installed bingo units $1,515,041 $4,128,640 $7,127,640
Bingo units on-hand 170,021 490,860 712,527
Raw materials and bingo units
in progress 399,875 164,141 413,880
Office furniture and equipment 51,944 278,835 366,853
Leasehold improvements - 40,017 61,565
-----------------------------------------
2,136,881 5,102,493 8,682,465

Less accumulated depreciation
and amortization 267,042 808,156 1,716,697
-----------------------------------------
$1,869,839 $4,294,337 $6,965,768
-----------------------------------------
-----------------------------------------

F-12
<PAGE>

"Bingo units on-hand" are transferred to "Installed bingo units" when
installed at a customer location, at which time a provision for depreciation is
applied.

Depreciation expense during the period from inception (April 18, 1994)
through October 31, 1994, the years ended October 31, 1995 and 1996 and the nine
months ended July 31, 1996 and 1997 amounted to approximately $43,000, $224,000,
$541,000, $352,000 and $909,000, respectively.

3. CREDIT AGREEMENTS

On April 11, 1997, the Company obtained a revolving line-of-credit (the
"Line") and a $3,000,000 term loan (the "Term Loan") from a bank. The maximum
amount available under the terms of the Line is $3,000,000 and borrowings bear
interest based on the prime rate plus .5% or LIBOR plus 2.5% at the Company's
option, interest is payable monthly and the Line expires on April 11, 1998. The
Term Loan bears interest at a fixed rate of 8.9%, due in equal monthly
installments of principal and interest through the maturity date of April 11,
2000 and it includes provisions for pre-payment penalties. The Term Loan was
used to pay off amounts outstanding under a previous credit agreement totaling
approximately $2.6 million. Both the Line and the Term Loan are secured by
substantially all of the Company's assets. The Line and the Term Loan contain
certain restrictive covenants, which among other things require that specified
financial balances and ratios be maintained, restricts the payment of dividends
and prohibits the incurrence of additional indebtedness. At July 31, 1997,
$1,100,000 was outstanding under the Line at an interest rate of 9.0% and
$2,777,891 was outstanding under the Term Loan.

F-13
<PAGE>

Principal maturities of the Term Loan by fiscal year as of July 31, 1997
are as follows:

1997 (remaining three months) $ 224,037
1998 954,023
1999 1,042,690
2000 557,141
----------
$2,777,891
----------
----------

4. CONVERTIBLE NOTES PAYABLE TO OFFICERS

Convertible notes payable to officers are unsecured borrowings bearing
interest at prime plus 4.25% (aggregating 13.25% at July 31, 1997). Principal
and interest of $1,475,888 are due in February 1999. Unpaid principal and
interest are convertible into the Company's common stock at the lesser of $1.00
per share or the lowest price offered to any individual or investor group.
Interest expense recorded on notes payable to officers amounted to approximately
$60,000, $198,000, $164,000, $117,000, and $140,000 during the period from
inception (April 18, 1994) through October 31, 1994, the years ended October 31,
1995 and 1996, and the nine months ended July 31, 1996 and 1997, respectively.
Included along with the principal amount of convertible notes payable to
officers on the accompanying balance sheets is accrued interest of approximately
$110,000 (current portion of $38,000), $276,000 (current portion of $45,000) and
$515,000 (no current portion) at October 31, 1995 and 1996 and July 31, 1997,
respectively.

As required under the terms of the Term Loan (Note 3) no principal payments
may be made on certain of the convertible notes payable to officers
(approximately $905,000 principal amount outstanding at July 31, 1997) until all
amounts payable under the Term Loan have been paid in full.

5. COMMITMENTS AND CONTINGENCIES

LEASES

The Company leases administrative and manufacturing facilities under non-
cancelable operating leases. Rent expense for the period from inception
(April 18, 1994) through October 31, 1994, during the years ended October 31,
1995 and 1996 and the nine months ended July 31, 1996 and 1997 amounted
to approximately $10,000, $32,000, $89,000, $58,000 and $83,000, respectively.

Future minimum lease payments under these leases, by fiscal year, as of
July 31, 1997 are as follows:

1997 (remaining three months) $ 25,000
1998 71,000
1999 62,000
2000 51,000
2001 43,000
--------
$252,000
--------
--------

LITIGATION

In November, 1996, a patent infringement action and demand for jury trial
was commenced against the

F-14
<PAGE>

Company and five other defendants by FortuNet, Inc. in the U.S. District Court,
Southern District of California. The other defendants are Advanced Gaming
Technology, Inc., American Video Systems, FortuNet Canada, Inc., Artificial
Intelligence, and Multimedia Games, Inc. The complaint alleges that the
Company, among others, has infringed, actively induced or contributed to the
infringement of Patent No. 4,624,462 (the "'462 Patent") by making, using,
selling, among other acts, electronic bingo devices that allegedly embody the
invention of the '462 Patent. The '462 Patent was issued in 1986 and will
expire in 2001 and is allegedly infringed by the Company's fixed-base bingo
units. The plaintiff seeks a preliminary and permanent injunction prohibiting
the Company from infringement of plaintiff's rights to the '462 Patent, as well
as actual damages, enhanced (treble) damages, attorneys' fees and any other
costs. The Company, in July 1997, won its motion for transfer and severance in
this action. All relevant court dates have been vacated in light of the
transfer to the U.S. District Court of Arizona. A scheduling conference in the
U.S. District Court of Arizona has been set for January 5, 1998.

In March, 1996, a patent infringement action and demand for jury trial was
commenced against the Company by Bingo Technologies, Inc. (formerly Bingo Card
Minder Corp.), in the U.S. District Court, Northern District of California. The
complaint alleges that the Company has infringed, actively induced or
contributed to the infringement of Patent No. 4,378,940 (the "'940 Patent") by
making, using, selling, among other acts, electronic bingo devices that
allegedly embody the invention of the '940 Patent. The '940 Patent was issued
in 1983 and will expire in 2000 and is allegedly infringed by the Company's
hand-held bingo units. The plaintiff seeks a preliminary and permanent
injunction prohibiting the Company from infringement of plaintiff's rights to
the '940 Patent, as well as actual damages, enhanced (treble) damages,
attorneys' fees and any other costs. A trial date has been set for December 7,
1998.

The Company believes that its products do not infringe either the '462
Patent or the '940 Patent and intends to continue to defend against both actions
vigorously. However, both actions are in the early stages of litigation, and
there can be no assurance that favorable outcomes will be obtained or that if
either or both actions are resolved in favor of the plaintiffs such results
would not have a material adverse impact on the Company's financial position,
results of operations or cash flows.

In October 1997, two actions were commenced against the company by Apex
Wholesale, Inc. ("Apex"), in the U.S. District Court, Southern District of
California. The Company formerly purchased its hand-held units manufactured
by Tidalpower through Apex but terminated such arrangement in September 1996
and now purchases hand-held units directly from Tidalpower. In one action,
Apex is asserting a copyright claim on GameTech's hand-held bingo units. The
defendants (in addition to the Company) were Tidalpower, Green Dollars
Industrial Ltd. (a foreign corporation), Vern D. Blanchard, Richard T. Fedor,
Clarence H. Thiesen, Leo Lee (a foreign national), Doris Tsao (a foreign
national), and Morgan Chen ( a foreign national). The complaint alleges that
the Company breached various oral agreements with Apex and then
misappropriated, developed and marketed hand-held bingo units which allegedly
were invented through a cooperative effort of Apex, Vern D. Blanchard, and
Jeff Rogers (an individual). Apex seeks general damages, injunctive relief,
exemplary and punitive damages, attorney's fees, and any other costs the
Court deems proper. In the second action to avoid a fraudulent transfer,
Apex alleges that the Company, as well as Tidalpower, Green Dollars
Industrial Ltd., Leo Lee, Doris Tsao, and Morgan Chen conspired to avoid a
judgment entered in favor of Apex against Green Dollars Industrial Ltd. Apex
seeks general damages in the amount of $400,400, special damages totaling
$35,000, exemplary or punitive damages in the sum of $1,201,200, prejudgment
interest, costs of suit, and any other relief the Court finds proper. The
Company intends to vigorously defend itself against both actions. However,
these actions are in the early stages of litigation, and there can be no
assurance that favorable outcomes will be obtained or that if the actions are
resolved in favor of the plaintiff, such results would not have a material
adverse impact on the Company's financial position, results of operations on
cash flows.

In addition, in the normal course of business, the Company may be named as
defendant or co-defendant in

F-15
<PAGE>

lawsuits involving primarily claims for damages. The Company's management
believes that any such pending lawsuits will not have a material adverse impact
on the Company's financial position, results of operations or cash flows.

OTHER

As of July 31, 1997, the Company had approximately $2 million in
outstanding purchase commitments for bingo units.

6. STOCKHOLDERS' EQUITY

COMMON STOCK

During fiscal 1995, the Company issued 2,260,000 shares of common stock
which included provisions that the shares would be subject to repurchase by the
Company at the original purchase price over specified periods in the event that
the shareholder no longer participated in the management of the Company. At
July 31, 1997 no shares were any longer subject to repurchase by the Company.

Of the 35,550,175 shares of common stock authorized but unissued at
July 31, 1997, the following shares are reserved for issuance:

Stock options 2,437,050
Convertible notes payable to officers 1,475,888
----------
3,912,938
----------
----------

STOCK OPTION PLAN

In August 1997, the Company's Board of Directors adopted a stock option
plan under which all officers, employees, directors and consultants may
participate (the "1997 Plan"). Options granted under the 1997 Plan may either
be incentive stock options ("ISO's") or non-qualified stock options ("NSO's")
and they will generally have a term of 10 years from the date of grant and will
vest over periods determined at the date of grant. The exercise prices of the
ISO's will be at 100% or 110% of the fair market value of the Company's common
stock on the date of grant as provided for in the 1997 Plan. The exercise prices
of the NSO's are determined by the board of directors. In connection with the
adoption of the 1997 Plan, the board of directors approved the reservation of
2,000,000 shares of common stock for issuance under the 1997 Plan and included
options granted during the twelve months immediately preceding the adoption of
the 1997 Plan as grants under the 1997 Plan.

F-16
<PAGE>

A summary of the Company's stock option activity under the 1997 Plan is as
follows:

NUMBER OF WEIGHTED
SHARES AVERAGE EXERCISE
(OPTIONS) PRICE
-----------------------------
Balance at October 31, 1996 10,000 $ .16
Granted 1,182,000 $ 1.02
Exercised - $ -
Canceled - $ -
---------
Balance at July 31, 1997 1,192,000 $ 1.02
---------
---------

At July 31, 1997, options to purchase 904,000 shares of common stock were
exercisable at exercise prices ranging from $.16 to $1.10 per share. In
addition, at July 31, 1997, 808,000 shares of common stock were available for
future grants under the 1997 Plan.

The Company also has options outstanding at July 31, 1997, to purchase
427,050 shares of common stock at exercise prices ranging from $.01 to $.16 per
share that were granted prior to the adoption of, and not considered grants
under the 1997 Plan. Of these options 128,750 were exercisable at July 31, 1997
at exercise prices ranging from $.01 to $.16 per share.

STOCK REPURCHASE AGREEMENT

On November 22, 1996, the Company entered into an agreement with one of its
stockholders to repurchase 1,000,000 shares of the Company's common stock (the
"Agreement"). Of the 1,000,000 shares repurchased, 250,000 were subject to
repurchase under the terms of the original purchase agreement. The shares
repurchased by the Company have been canceled. The Agreement provides for the
Company to pay a total of $875,000 for the stock and forgiveness of a note and
accrued interest payable to the stockholder totaling approximately $168,000 (the
"Payment"). The Payment is comprised of a cash payment of $250,000 and issuance
of a new note payable in the principal amount of $625,000 (the "Note"). The
Note bears interest at 5.65% and is payable in four semi-annual installments of
$156,250 plus accrued interest beginning March 1, 1997. At July 31, 1997,
$468,750 was outstanding under the Note. The Agreement limits the amount of any
prepayments on certain convertible notes payable to officers (Note 4) while
there are any amounts owing under the Agreement.

F-17
<PAGE>

SALE OF PREFERRED STOCK

On September 2, 1997, the Company received proceeds of approximately
$2,835,000 (net of issuance costs of $165,000) from the sale of 400,000 shares
of convertible preferred stock (the "Preferred Stock"). Each share of Preferred
Stock is convertible, at the holder's option, into common stock on a one-for-one
basis subject to certain antidilution adjustments. Each share shall
automatically be converted into common stock immediately upon the closing of a
registered public offering of the Company's common stock with aggregate proceeds
to the Company of at least $20,000,000. The preferred stockholders are entitled
to one vote for each share of common stock into which such shares can be
converted.

The preferred stockholders are also entitled to liquidation preferences
equal to the initial purchase price per share ($7.50) plus any declared and
unpaid dividends. In addition, at any time after December 31, 2001, the Company
shall, upon the request of the holders of a majority of the Preferred Stock then
outstanding, redeem the Preferred Stock at the liquidation preference for cash.

INITIAL PUBLIC OFFERING

On September 2, 1997, the Company's board of directors authorized the
filing of a registration statement with the Securities and Exchange Commission
permitting the Company to sell up to an aggregate of 3,676,500 shares of common
stock (including the underwriters' over-allotment option) to the public. Under
the terms of the offering currently contemplated, the outstanding notes
payable to officers (principal and accrued interest) and the Preferred Stock
will be converted into common stock, prior to or concurrently with the
completion of the offering.

7. INCOME TAXES

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
and the amounts used for income tax reporting purposes. As of October 31, 1995
and 1996 and July 31, 1997, the Company had deferred tax liabilities
(principally attributable to accelerated depreciation for tax purposes) of
approximately $130,000, $270,000 and $317,000, respectively, offset by deferred
tax assets (principally attributable to goodwill amortization, accounts
receivable reserves and accrued liabilities) of approximately $20,000, $115,000
and $165,000, respectively.

F-18
<PAGE>

The income tax provisions consist of the following components:

PERIOD FROM
INCEPTION
(APRIL 18,
1994) THROUGH YEARS ENDED OCTOBER 31, NINE MONTHS
(OCTOBER 31, ----------------------- ENDED JULY 31,
1994) 1995 1996 1997
---------------------------------------------------------
Current:
Federal $ - $ 137,143 $ 431,092 $1,162,635
State - 31,764 82,125 256,382

Deferred:
Federal - 90,562 34,472 365
State - 18,645 11,528 (3,382)
---------------------------------------------------------
$ - $ 278,114 $ 559,217 $1,416,000
---------------------------------------------------------
---------------------------------------------------------

The 1995 income tax provision is net of an operating loss carryforward
utilization of approximately $170,000.

The difference between the Company's (benefit) provision for income taxes
as presented in the accompanying statements of operations and the (benefit)
provision for income taxes computed at the federal statutory rate is comprised
of the items shown in the following table as a percentage of pre-tax earnings:

<TABLE>
<CAPTION>
PERIOD FROM
INCEPTION
(APRIL 18, NINE MONTHS
1994) THROUGH YEARS ENDED OCTOBER 31, ENDED
OCTOBER 31, ------------------------ JULY 31,
1994 1995 1996 1997
------------------------------------------------------
<S> <C> <C> <C> <C>
Income tax (benefit)
provision at the statutory rate (34.0)% 34.0% 34.0% 34.0%

State income taxes, net of
federal benefit - 6.0% 7.0% 4.5%

Net operating loss benefit - (8.0)% - -

Net operating loss with no
current benefit 34.0% - - -

Others, net - - - 1.1%
------------------------------------------------------
-% 32.0% 41.0% 39.6%
------------------------------------------------------
------------------------------------------------------
</TABLE>

F-19
<PAGE>

8. UNAUDITED PRO FORMA CASH, CONVERTIBLE NOTES PAYABLE AND STOCKHOLDERS'
EQUITY

The Company's unaudited pro forma cash, convertible notes payable and
stockholders' equity as of July 31, 1997 gives effect to 1) the receipt of
the net proceeds from the issuance of the Preferred Stock (Note 6), 2) the
conversion of all convertible notes payable outstanding into an aggregate of
1,475,888 shares of common stock, and 3) the conversion of the Preferred
Stock into 400,000 shares of common stock. The conversion of the convertible
notes payable and the Preferred Stock into common stock will occur prior to
the completion of the Company's initial public offering.

F-20
<PAGE>

- --------------------------------------------------------------------------------

NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN AS CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, AND SELLING STOCKHOLDER OR
ANY UNDERWRITER. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE HEREUNDER
SHALL UNDER ANY CIRCUMSTANCES IMPLY THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AT ANY TIME SUBSEQUENT TO THE DATE HEREOF. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY BY ANY PERSON
IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFERING OR
SOLICITATION

--------------------------

TABLE OF CONTENTS

PAGE
----

Prospectus Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Risk Factors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Dividend Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Dilution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . 13
Management's Discussion and Analysis of
Financial Condition and Results of
Operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Certain Relationships and Related Party
Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Principal and Selling Stockholders. . . . . . . . . . . . . . . . . . . . 38
Shares Eligible for Future Sale . . . . . . . . . . . . . . . . . . . . . 40
Description of Capital Stock. . . . . . . . . . . . . . . . . . . . . . . 41
Underwriting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Additional Information. . . . . . . . . . . . . . . . . . . . . . . . . . 45
Index to Consolidated Financial Statements. . . . . . . . . . . . . . . . F-1

-------------------------------

UNTIL , 1997 (25 DAYS AFTER COMMENCEMENT OF THIS OFFERING), ALL
DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT PARTICIPATING
IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN
ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS
UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

- --------------------------------------------------------------------------------

3,710,000 SHARES

GAMETECH
INTERNATIONAL, INC.

COMMON STOCK

PROSPECTUS

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

PRUDENTIAL SECURITIES INCORPORATED

, 1997

<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

Estimated expenses (other than the underwriting discounts and commissions)
payable in connection with the issuance and distribution of the securities to be
registered hereunder are as follows:

- -------------------------------------------------------------------------------
SEC registration fee . . . . . . . . . . . . . . . . . $ 16,808
- -------------------------------------------------------------------------------
NASD filing fee. . . . . . . . . . . . . . . . . . . . 6,047
- -------------------------------------------------------------------------------
Nasdaq National Market listing fee . . . . . . . . . . 40,914.30
- -------------------------------------------------------------------------------
Printing and engraving expenses. . . . . . . . . . . . *
- -------------------------------------------------------------------------------
Accounting fees and expenses . . . . . . . . . . . . . *
- -------------------------------------------------------------------------------
Legal fees and expenses. . . . . . . . . . . . . . . . *
- -------------------------------------------------------------------------------
Blue Sky fees and expenses (including legal fees). . . *
- -------------------------------------------------------------------------------
Transfer agent and registrar fees and expenses . . . . *
- -------------------------------------------------------------------------------
Miscellaneous. . . . . . . . . . . . . . . . . . . . . *
- -------------------------------------------------------------------------------
Total. . . . . . . . . . . . . . . . . . . . . . .
- -------------------------------------------------------------------------------

- -------------------------------
*To be completed by amendment

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Bylaws of the Company provide for indemnification of the officers and
directors of the Company to the fullest extent permitted by applicable law.
Applicable law permits indemnification for all matters (including those asserted
in derivative actions) except for those determined by a court to have
constituted willful misconduct or recklessness.

The Registrant has obtained directors' and officers' liability insurance.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

Described below is information regarding all unregistered securities that
have been issued by the Company during the past three years.

On September 2, 1997 the Company issued and sold 400,000 shares of the
Company's Series A Preferred Stock in a private placement for total
consideration of $3 million to institutional and individual investors
unaffiliated with the Company in reliance upon Section 4(2) of the Securities
Act as a transaction not involving a public offering.

On various dates betwen October 1, 1996 and October 16, 1997, Company
employees exercised options granted in partial compensation for their services
to purchase an aggregate of 468,366 shares of Common Stock for an aggregate
consideration of $4,683.66 in private sales in reliance upon Section 4(2) of the
Securities Act as a transaction not involving a public offering.

On March 1, 1995 the Company issued and sold 100,000 shares of Common Stock
to an officer of the Company for the aggregate price of $100,000.00 in reliance
upon Section 4(2) of the Securities Act as a transaction not involving any
public offering.

On June 6, 1996 and on April 27, 1997, an exclusive distributor of the
Company exercised options granted pursuant to a distributorship agreement to
purchase 5,000 shares of Common Stock on each date for a total of 10,000 shares
issued by the Company and purchased in private sales for a total aggregate price
of $100.00 in reliance upon Section 4(2) of the Securities Act as a transaction
not involving any public offering. On January 2, 1997, the same individual was
issued 2,500 shares of Common Stock in partial compensation in the aggregate
amount of $2,500.00 for the purchase of a distributorship by the Company in
reliance upon Section 4(2) of the Securities Act as a transaction not involving
any public offering.

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<PAGE>

On November 18, 1996 the Company issued 3,000 shares of Common Stock to an
officer of the Company as a sign-on bonus in the aggregate amount of $3,000 in
reliance upon Section 4(2) of the Securities Act as a transaction not involving
any public offering.

On various dates between April 1, 1995 and June 1, 1997, the Company issued
an aggregate of 516,375 shares of Common Stock to a stockholder for the
conversion of stockholder debt in the aggregate amount of $516,375 in reliance
upon Section 4(2) of the Securities Act as a transaction not involving any
public offering. 24,500 of these shares issued upon conversion of outstanding
stockholder debt were issued on June 1, 1997.

Additionally, on March 1, 1997, the Company issued a convertible promissory
note in favor of a stockholder in the original principal amount of $1,341,200,
convertible into Common Stock at the option of the holder at a $1.00 per share
price and due in full on February 28, 1999. The convertible note was issued in
exchange for previously outstanding notes and interest payable to the holder and
was issued in reliance upon Section 4(2) of the Securities Act as a transaction
not involving any public offering.

Also on March 1, 1997, the Company issued a convertible promissory note in
favor of a stockholder in the original principal amount of $80,954 convertible
into Common Stock at the option of the holder at a $1.00 per share price and due
in full on February 28, 1999. The convertible note was issued in exchange for
previously outstanding notes and interest payable to the holder and was issued
in reliance upon Section 4(2) of the Securities Act as a transaction not
involving any public offering.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) EXHIBITS

Exhibit
Number
------

*** 1.1 Form of Underwriting Agreement

* 2.1 Certificate of Incorporation of the Company, as amended

* 2.2 Amended and Restated Bylaws of the Company

4.1 GameTech International, Inc. Registration Rights Agreement

*** 4.2 Specimen Common Stock certificate

* 5.1 Opinion and Consent of Morgan, Lewis & Bockius LLP

* 10.1 GameTech International, Inc. Incentive Stock Plan

* 10.2 Lease Agreement between Russ Jeter and GameTech International,
Inc.

* 10.3 Lease Agreement between Russ Jeter and TSBN, LLC

* 10.4 Lease Agreement between North Point Associates Limited
Partnership and GameTech International, Inc.

* 10.5 Joint Venture and Limited Liability Company Agreement by and
between GameTech International, Inc. and The Satellite Bingo
Network (US) Inc.

10.6 Distribution Agreement between GameTech International, Inc. and
Trend Gaming Systems

II-2
<PAGE>

10.7 Distribution Agreement between M&M Operators and GameTech
International, Inc.

10.8 Revolving Line of Credit Note of GameTech International, Inc.
dated April 11, 1997 in the principal amount of $3,000,000
payable to Wells Fargo Bank, N.A.

10.9 Form of Video Bingo System Placement Agreement

10.10 Sublease Agreement between Trend Gaming Systems, LLC and GameTech
International, Inc.

10.11 Amended Employment Agreement between GameTech International, Inc.
and Richard T. Fedor

10.12 Amended Employment Agreement between GameTech International, Inc.
and Clarence H. Thiesen

10.13 Amended Employment Agreement between GameTech International, Inc.
and Gary R. Held

10.14 Amended Employment Agreement between GameTech International, Inc.
and Conrad J. Granito, Jr.

** 11.1 Statement re Computation of Earnings Per Share

** 23.1 Consent of Ernst & Young LLP, Independent Auditors

* 23.2 Consent of Morgan, Lewis & Bockius LLP (included in Exhibit 5.1)

* 24.1 Power of Attorney (included in Part II of this Registration
Statement)

** 27.1 Financial Data Schedule

- -------------------

* Previously filed.
** Revised and refiled herewith.
*** To be filed by amendment.

(b) FINANCIAL STATEMENT SCHEDULES

Schedule II - Valuation and qualifying accounts

ITEM 17. UNDERTAKINGS.

(a) The undersigned Registrant hereby undertakes to provide to the
underwriter at the closing specified in the underwriting agreements certificates
in such denominations and registered in such names as required by the
underwriter to permit prompt delivery to each purchaser.

(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

(1) For purposes of determining any liability under the Securities
Act, the information omitted from the

II-3
<PAGE>

form of prospectus filed as part of this registration statement in reliance upon
Rule 430A and contained in a form of prospectus filed by the Registrant pursuant
to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to
be part of this registration statement at the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.

II-4
<PAGE>

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS AMENDED REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF
BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF TEMPE, STATE OF
ARIZONA, ON , 1997.

GAMETECH INTERNATIONAL, INC.

By:
-------------------------------------
Richard T. Fedor
Chairman of the Board,
Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the dates indicated.

- ---------------------------------------------------------------------------
Signature Title Date
- ---------------------------------------------------------------------------

- ---------------------------------------------------------------------------
Chairman of the Board,
Chief Executive Officer
and Director , 1997
Richard T. Fedor
- ---------------------------------------------------------------------------
Chief Financial Officer
and Director , 1997
Clarence H. Thiesen
- ---------------------------------------------------------------------------
Vice President - Sales &
Marketing and Director , 1997
Gary R. Held
- ---------------------------------------------------------------------------
Treasurer , 1997
John J. Paulson
- ---------------------------------------------------------------------------

*By:
--------------------------------------
Clarence H. Thiesen, Attorney-in-Fact

II-5
<PAGE>

GAMETECH INTERNATIONAL, INC.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

PERIOD FROM INCEPTION (APRIL 18, 1994) THROUGH OCTOBER 31, 1994 AND
YEARS ENDED OCTOBER 31, 1995 AND 1996

ADDITIONS DEDUCTIONS
------------------------- ------------
BALANCE AT CHARGED TO CHARGED TO (WRITE-OFFS, BALANCE AT
BEGINNING COSTS AND OTHER NET OF END OF
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS COLLECTIONS) PERIOD
- ----------- ---------- ---------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C>
Period from inception (April 18,
1994) through October 31, 1994:
Deducted from asset accounts:
Allowance for doubtful
accounts $ - $ - $ - $ - $ -

Year ended October 31, 1995:
Deducted from asset accounts:
Allowance for doubtful
accounts $ - $ 24,426 $ - $ - $ 24,426

Year ended October 31, 1996:
Deducted from asset accounts:
Allowance for doubtful
accounts $ 24,426 $ 78,196 $ - $ (1,080) $101,542
</TABLE>

S-1

<PAGE>

GAMETECH INTERNATIONAL, INC.
REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this "AGREEMENT") is made and entered
into as of September 2, 1997, by and between GameTech International, Inc., a
Delaware corporation (the "COMPANY"), and the other parties signatory hereto
(collectively, the "HOLDERS" and individually a "HOLDER").

The parties hereby agree as follows:

SECTION 1
DEFINITIONS

The following terms shall have the meanings indicated:

"Commission" means the Securities and Exchange Commission, or any other
federal agency then administering the Securities Act.

"Common Stock" means the Common Stock, par value $.001 per share, of the
Company.

"Exchange act" means the Securities Exchange act of 1934, as amended, or
any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.

"Initial Public Offering" means an initial public offering of shares of
Common Stock by the Company registered under the securities Act.

"Losses" means all losses, claims, damages or liabilities and reasonable
expenses related thereto.

"Majority Holders" means Holders holding a majority of the shares of
Series A Preferred Stock or the Shares.

"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.

"Series A Preferred Stock" means the Series A Preferred stock, par value
$.001 per share, of the Company.

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<PAGE>

"Shares means all shares of Common stock issued and/or issuable upon
conversion of the Series A Preferred Stock held by a Holder.

SECTION 2
DEMAND REGISTRATION

(a) At any time during the period beginning one year after the date the
Company shall have effected an Initial Public Offering and ending three
years from such date, upon the written demand of the Majority Holders, the
Company shall prepare and file a registration statement under the Securities
Act covering an offering of such number of shares of Common Stock as shall
have been requested by the Majority Holders in such demand and shall cause
such registration statement to become effective, all in accordance with the
provisions of this Agreement; PROVIDED that the Company shall be obligated to
effect registration pursuant to this SECTION 2 no more than one time.

(b) the Company shall proceed as expeditiously as possible after
receipt of a demand pursuant to SECTION 2(a) to file a registration statement
and use its best efforts to effect, within one hundred twenty (120) days
after the giving of such written demand, the registration of an offering
under the Securities Act which shall include the Shares specified in the
demand given pursuant to SECTION 2(a). No other outstanding securities of the
Company shall be included in such registration unless, and then only to the
extent that, in the opinion of the managing underwriter, such other
outstanding securities may be included in such registration statement and
sold without adversely affecting the sale of the Shares by the Holder. The
company shall select the representative, if any, of the underwriters to be
engaged in connection with any such registration, subject to the reasonable
approval of the Majority Holders.

SECTION 3
PIGGYBACK REGISTRATION

If at any time the Company proposes to register any offering of shares
of its capital stock under the Securities Act (other than a registration
statement on Form S-4, Form S-8 or other successor forms thereto), and if
such registration is to be on a form of the commission that my include, or is
at any time amended or changed to such a form that may include the Shares,
the Company will at any such time give written notice to the Holders of its
intention to do so at least thirty (30) days prior to the filing of said
registration statement.

3.1 If the representative of the underwriters participating in the
sale and distribution of the Company's securities covered by said
registration statement agrees that a number of Shares (the "PERMISSIBLE
SECONDARY SHARES") may be included in the offering covered by the
registration statement, the Company's notice shall afford the Holders an
opportunity to elect to include in such registration the Permissible
Secondary Shares owned by the Holders. The Holders shall have twenty (20)
days after receipt of the Company's notice to notify the Company in writing
of the number of shares (the "ELECTED SHARES") which such Holder elects to
include in the offering and the Elected Shares shall be included in the
offering. The aggregate number of Elected Shares that the Holders may include
in such filing shall not exceed the number of Permissible Secondary

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<PAGE>

Shares. Such representative may increase or decrease (to zero if so
determined by such representative) the number of Permissible Secondary Shares
at any time until all Shares included in such registration shall have been
sold by such underwriters; PROVIDED, that if any such registration is to
include shares held by other stockholders of the Company, then the number of
Shares with respect to any such reduction shall be allocated (i) 50% to the
Holders, and (ii) 50% in the aggregate to any such other stockholders, with
such reduction to be made, if necessary, PRO RATA in proportion to the
respective number of Shares requested to be registered to the extent
necessary to reduce the total number of such stockholders' Shares to be
included in the registration as so provided.

3.2 The company agrees that, without the consent of the Majority
Holders, it will not hereafter grant to any present or future shareholder any
"piggyback" or "demand" registration rights.

3.3 The inclusion in such registration of shares shall be upon the
condition that each Holder sells its Shares to the underwriters at the same
price and on substantially the same terms and conditions as the Company.

3.4 The company shall afford the Holders the right to participate in
each registration without limitation as to number of registrations.

SECTION 4
PARTICIPATING SHAREHOLDERS

To elect to include any Shares in any registration, the Holder shall:

4.1 cooperate with the Company and the underwriter for such
registration in preparing each such registration and execute all such
agreements as the underwriter may deem reasonably necessary in favor of such
underwriter;

4.2 promptly supply the Company and the underwriter for such
registration with all information, documents, representations and agreements
as the underwriter may deem reasonably necessary in connection with such
registration; and

4.3 agree in writing not to sell or transfer any shares of the capital
stock of the Company not included in such registration for a period of thirty
(30) days prior to and one hundred eighty (180) days after the effective
date of such registration without the underwriter's prior written consent.

4.4 agree that upon receipt of a notice form the Company pursuant to
SECTION 6.6 hereof that the registration statement is required to be amended
or supplemented, or any stop order with the respect thereto has been issued,
such Holder will forthwith discontinue disposition of the Shares covered by
such registration statement or prospectus until such Holder's receipt of
copies of the supplemented or amended prospectus or until it is advised in
writing by the Company that the use of the applicable prospectus may be
resumed.

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<PAGE>

SECTION 5
OPINION OF COUNSEL

5.1 The Company shall have no obligation under SECTIONS 2 AND 3 to
register any shares if the Company shall deliver to the Holder an opinion of
counsel in form and substance reasonably satisfactory to the Holder and its
counsel to the effect that the proposed sale or disposition of all of the
Shares for which registration was requested does not require registration
under the Securities Act for a sale or disposition in a single public
transaction.

5.2 The Company hereby agrees to indemnify the Holder against, and to
hold it harmless from, all damages, losses, liabilities (including liability
for rescission), costs and expenses, arising from violations of law with
respect to such sale or disposition, that it may incur under the Securities
Act or otherwise by reason of it proceeding in accordance with such opinion
of counsel, other than any such damages, losses, liabilities, costs or
expenses that arise in connection with any willful misconduct on the part of
such Holder.

SECTION 6
REGISTRATION PROCEDURES

If and whenever the Company is obligated by the provisions of this
Agreement to effect the registration of any offering of Shares under the
Securities Act, as expeditiously as possible the Company will, or will use
its best efforts to, as the case may be:

6.1 Prepare the file with the Commission a registration statement with
respect to such Shares and, if the Board of Directors of the Company shall so
direct, cause such registration statement to become effective; PROVIDED,
HOWEVER, that before filing a registration statement or prospectus or any
amendments or supplements thereto, the Company shall furnish to each Holder
who has Shares included in such registration statement, its counsel and the
representative of the underwriters, if any, copies of all such documents
proposed to be filed, which documents will be subject to the reasonable
review of such Holder, its counsel and the representative of the
underwriters, if any.

6.2 Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be reasonably necessary to keep such registration
statement effective until the earlier of the termination of the distribution
covered thereby and the expiration of a period of two hundred seventy (270)
days after its effective date, and comply with the provisions of the
Securities Act with respect to the disposition of all shares of Common Stock
covered by such registration statement; PROVIDED, HOWEVER, that if
maintaining the effectiveness of the registration statement would require the
filing of a post-effective amendment including new financial statements
(other than financial statements which the Company would be required to
include in a quarterly report on Form 10-Q under Section 13 or 15(d) of the
Exchange Act), the Company shall be obligated hereunder to use its best
efforts to maintain the effectiveness of the registration statement for only
six (6) months in the case of the first registration filed hereunder, and
ninety (90) days in the case of any other registration filed hereunder. In
the event that any shares of Common Stock included in a

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<PAGE>

registration statement subject to this Agreement remain unsold at the end of
the period during which the Company is obligated to use its best efforts to
maintain the effectiveness of such registration statement, the Company, if
and when a further amendment or supplement would be required to comply with
Section 10 of the Securities Act, may file a post-effective amendment to the
registration statement for the purpose of removing such shares from
registered status.

6.3 Furnish to such Holder so many copies of a prospectus, including a
preliminary prospectus, in conformity with the requirements of the Securities
Act, and such other documents, as the Holder may reasonably request.

6.4 Register or qualify the securities covered by such registration
statement under such other securities or blue sky laws of such jurisdictions
as such Holder shall reasonably request, and do any and all other acts and
things that may be reasonably necessary or advisable to enable such Holder to
consummate the disposition in such jurisdictions of such Shares; PROVIDED,
HOWEVER, that the Company shall not be obligated, by reason thereof, to
qualify as a foreign corporation or file any general consent to service of
process under the laws of any such jurisdiction or subject itself to taxation
as doing business in such jurisdiction.

6.5 Furnish to such Holder at the time of disposition, an opinion of
counsel for the Company (which opinion shall be acceptable to such Holder and
its counsel) substantially to the effect that a registration statement
covering the offering of Shares has been filed with the Commission under the
Securities Act and has been made effective by order of the Commission, that a
prospectus (except for the financial statements contained therein and other
documents incorporated by reference therein) on its face complies as to form
with the requirements of the Securities Act, that to the best of such
counsel's knowledge, no stop order has been issued by the Commission
suspending the effectiveness of such registration statement and that, to the
best of such counsel's knowledge, no proceedings for the issuance of such a
stop order are threatened or contemplated. In addition, such option of
counsel shall also state that such counsel has no reason to believe that at
the time the registration statement became effective, the registration
statement and the prospectus contained therein (except for the financial
statements and other financial data as to which such counsel need not express
any belief) contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading and that the prospectus, as amended or
supplemented, if applicable (except for the financial statements and other
financial data, as aforesaid) contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.

6.6 Notify such Holder and its counsel promptly after they shall
receive notice that any registration statement, supplement or amendment has
become effective, any registration statement is required to be amended or
supplemented, or any stop order with respect thereto has been issued.

6.7 Enter into such agreements (including an underwriting agreement in
form, scope and substance as is customary in underwritten offerings) and take
all such other actions in

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<PAGE>

connection therewith (including those reasonably requested by the
representative of the underwriters or such Holder in order to expedite or
facilitate the disposition of the Shares covered by such registration) and in
such connection, (i) make such representations and warranties to the
underwriters with respect the business of the Company, the registration
statements, the prospectus and the documents, if any, incorporated or deemed
to be incorporated by reference in the registration statement, in each case
in form, substance and scope as are customarily made by issuers to
underwriters in underwritten secondary offerings and confirm the same if and
when requested; (ii) obtain opinions of counsel to the Company and updates
thereof, which counsel and opinions (in form, scope and substance) shall be
reasonably satisfactory to the representative of underwriters, if any, and
counsel to such Holder addressed to each of the underwriters, if any, and
such Holder covering the matters customarily covered in opinions required in
underwritten offerings and such other matters as may be reasonably requested
by such underwriters (iii) obtain "cold comfort" letters and updates thereof
from the independent certified public accountants of the Company (and, if
necessary, any other independent certified public accountants of any
subsidiary of the Company or of any business acquired by the Company for
which financial statements and financial data are or are required to be
included in the registration statement) addressed to each of the
underwriters, such letters to be in customary form and covering matters of
the type customarily covered in "cold comfort" letters to underwriters in
connection with underwritten offerings; (iv) if any underwriting agreement is
entered into, the same shall set forth in full the indemnification and
contribution provisions and procedures of SECTIONS 8 THROUGH 11 hereof (or
such other less favorable provisions and procedures acceptable to the
representative of the underwriters) with respect to all parties to be
indemnified pursuant to said Sections; and (v) the Company shall deliver such
documents and certificates as may be requested by the representative of the
underwriters to evidence the continued validity of the representations and
warranties made pursuant to SECTION 6.7(i) above and to evidence compliance
with any customary conditions contained in the underwriting agreement or
other agreement entered into by the Company. The above shall be done at each
closing under such underwriting or similar agreement, or as and to the extent
required thereunder.

6.8 Make available for inspection, by any underwriter and any attorney
or accountant retained by such underwriter, at the offices where normally
kept, during reasonable business hours, all financial and other records,
pertinent corporate documents and properties of the Company; and cause the
officers , directors and employees of the Company to supply all information
reasonably required by any such underwriter, attorney or accountant in
connection with such registration statement; PROVIDED, HOWEVER, that any
records, information or documents that are designated by the Company in
writing as confidential shall be kept confidential by such persons unless (i)
disclosure of such records, information or documents is required by court or
administrative order, or (ii) disclosure of such records, information or
documents, in the option of counsel to such person, is required by law
(including, without limitation, pursuant to the requirements of the
Securities Act) or (iii) such records, information or documents are in the
public domain or otherwise publicly available.

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<PAGE>

SECTION 7
REGISTRATION EXPENSES

The costs and expenses (other than (i) underwriting discounts or
commissions and (ii) such fees as state securities officials may require that
any Holder pay) of all registrations and qualifications under the Securities
Act contemplated by SECTION 2 OR 3 of this Agreement, and of all other
actions that the Company is required to take or effect pursuant to this
Agreement with respect to such registration or qualification, shall be paid
by the Company (including, without limitation, all registration and filing
fees, printing expenses, costs of special audits incident to or required by
any such registration, fees an disbursements of counsel for the Company and
the reasonable fees and disbursements of one special counsel acting for the
Holders).

SECTION 8
INDEMNIFICATION BY COMPANY

In the event of any registration under the Securities Act of any
offering of Shares, the Company hereby agrees to indemnify and hold harmless
each Holder, its officers and directors, affiliates and control persons, if
any, and each other person, who controls such Holder (within the meaning of
the Securities Act) against any Losses, joint or several, to which the Holder
or controlling person or participating person may become subject under the
Securities Act or otherwise, insofar as such Losses (or proceedings in
respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement or alleged untrue statement of any material fact
contained, on the effective date thereof, in any registration statement under
which Shares were registered under the Securities Act, in any preliminary
prospectus or final prospectus contained therein, or in any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse
such Holder and each such controlling person or participating person for any
legal or other expenses reasonably incurred by such Holder or such
controlling person or participating person in connection with investigating
or defending any such Loss; PROVIDED, that the Company will not be liable in
any such case to the extent that any such Losses arise out of or are based
upon an untrue statement or alleged untrue statement made in such
registration statement, said preliminary or final prospectus or said
amendment or supplement, or an omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, in reliance upon and in conformity with
written information furnished by such Holder or such controlling or
participating person, as the case may be, specifically for use in the
preparation thereof; PROVIDED, FURTHER, that the Company shall not be liable
to the extent that (A) any such Losses arise out of or are based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in any preliminary prospectus if (i) such Holder failed to send or
deliver a copy of the prospectus with or prior to the delivery of a written
confirmation of the sale by such Holder to the person asserting such Losses
who purchased such Shares that are the subject thereof and (ii) the
prospectus would have adequately corrected such untrue statement or alleged
untrue statement or such omission or alleged omission or (B) any such Losses
arise out of or are based upon an untrue statement or alleged untrue
statement or omission or alleged omission in the prospectus, if such untrue
statement or alleged untrue statement, omission or alleged omission is

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<PAGE>

adequately corrected in an amendment or supplement to the prospectus and if,
having previously been furnished by or on behalf of the Company with copies
of the prospectus as so amended or supplemented, such Holder thereafter fails
to deliver such prospectus as so amended or supplemented, prior to or
concurrently with the sale of a Share to the person asserting such Losses who
purchased such registrable security that is the subject thereof from such
Holder. The Company shall also indemnify underwriters, selling brokers,
dealer managers and similar securities industry professionals participating
in the distribution, their officers, directors, agents and employees and each
person who controls such persons (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) to the same extent as
provided above with respect to the indemnification of such Holder.

SECTION 9
INDEMNIFICATION BY A HOLDER OF SHARES

In the event of any registration under the Securities Act of any
offering of Shares, each Holder, severally and not jointly, hereby agrees to
indemnify and hold harmless the Company and each other person, if any, who
controls the Company within the meaning of the Securities Act and each other
person (including each underwriter, and each other person, if any, who
controls such underwriter) who participates in the offering of such Shares
against any Losses, joint or several, to which the Company or controlling
person or participating person may become subject under the Securities Act or
otherwise, insofar as such Losses (or proceedings in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of
any material fact contained, on the effective date thereof, in any
registration statement under which an offering of such Shares was registered
under the Securities Act, in any preliminary prospectus or final prospectus
contained therein, or in any amendment or supplement thereto, or any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse the Company and each such controlling person or participating
person any legal or other expenses reasonably incurred by the Company or such
controlling person or participating person in connection with investigating
or defending any such Loss or proceeding; PROVIDED, that such Holder will be
liable in any such case to the extent, and only to the extent, that any such
Losses arise out of or are based upon an untrue statement or alleged untrue
statement made in such registration statement, said preliminary prospectus or
final prospectus or said amendment or supplement, or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in reliance upon and
in conformity with written information furnished by such Holder specifically
for use in the preparation thereof. The Company shall be entitled to receive
indemnities from underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in the distribution to the
same extent as provided above with respect to information so furnished in
writing by such persons specifically for inclusion in any registration
statement or prospectus.

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<PAGE>

SECTION 10
CONDUCT OF INDEMNIFICATION PROCEEDINGS

If any action or proceeding (including any governmental investigation or
inquiry) shall be brought or any claim shall be asserted against any person
entitled to indemnity hereunder (an "INDEMNIFIED PARTY"), such indemnified
party shall promptly notify the party from which such indemnity is sought
(the "INDEMNIFYING PARTY") in writing, and indemnifying party shall assume
the defense thereof, including the employment of counsel reasonably
satisfactory to the indemnified party and the payment of all reasonable fees
and expenses incurred in connection with the defense thereof. Any such fees
and expenses borne by the indemnified party (including any reasonable fees
and expenses and incurred in connection with investigating or preparing to
defend such action or proceeding) shall be paid to the indemnified party, as
incurred, within fifteen (15) days of written notice thereof to the
indemnifying party (regardless of whether it is ultimately determined that an
indemnified party is not entitled to indemnification hereunder), PROVIDED,
that such indemnified party shall first undertake to reimburse all such fees
and expenses to the extent it is judicially determined that such indemnified
party is not entitled to indemnification hereunder. Any such indemnified
party shall have the right to employ separate counsel in any such action,
claim or proceeding and to participate in the defense thereof, but the fees
and expenses of such counsel shall be the expenses of such indemnified party
unless (i) the indemnifying party has agreed to pay such fees and expenses or
(ii) the indemnifying party shall have failed to promptly assume the defense
of such action, claim or proceeding or (iii) the named parties to any such
action, claim or proceeding (including any impleaded parties) include both
such indemnified party and the indemnifying party, and such indemnified party
shall have been advised by counsel that there may be one or more legal
defenses available to it which are different from or in addition to those
available to the indemnifying party and that the assertion of such defenses
would create a conflict of interest such that counsel employed by the
indemnifying party could not faithfully represent the indemnified Party (in
which case, if such indemnified party notifies the indemnifying party in
writing that it elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right to assume
the defense of such action, claim or proceeding on behalf of such indemnified
party, it being understood, however, that the indemnifying party shall not,
in connection with any one such action, claim or proceeding or separate but
substantially similar or related actions, claims or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys (together with appropriate local counsel) at any time for all such
indemnified parties, unless in the reasonable judgment of such indemnified
party a conflict of interest may exist between such indemnified party and any
other of such indemnified parties with respect to such action, claim or
proceeding, in which event the indemnifying party shall be obligated to pay
the fees and expenses of such additional counsel or counsels). The
indemnifying party shall not be liable for any settlement of any such action
or proceeding effected without its written consent. Notwithstanding the
foregoing, the indemnifying party shall indemnify and hold harmless the
indemnified party from and against any and all losses, claims, damages,
liabilities and judgements by reason of any settlement of any action effected
with its consent.

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<PAGE>

SECTION 11
CONTRIBUTION

If the indemnification provided for in this Agreement is unavailable to
an indemnified party under SECTION 9 0R 10 hereof (other than by reason of
exceptions provided in those Sections) in respect of any Losses, then each
applicable indemnifying party in lieu of indemnifying such indemnified party
shall contribute to the amount paid or payable by such indemnified party as a
result of such Losses, in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and indemnified parties in
connection with the actions, statements or omissions which resulted in such
Losses as well as any other relevant equitable considerations. The relative
fault of such indemnifying party and the indemnified party shall be
determined by reference to, among other things, whether any action in
question, including any untrue statement or alleged untrue statement of a
material fact or omission or alleged omission of a material fact, has been
taken or made by, or relates to information supplied by, such indemnifying
party or indemnified party, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such action,
statement or omission. The amount paid or payable by a party as a result of
any Losses shall be deemed to include, subject to the limitations set forth
in SECTION 10, any legal or other fees or expenses reasonably incurred by
such party in connection with any action, suit, claim, investigation or
proceeding.

The parties hereto agree that it would not be just and equitable if
contribution pursuant to this SECTION 11 were determined by pro rata
allocation or by any other method of allocation which does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this SECTION 11, if any Holder
is an indemnifying party it shall not be required to contribute any amount in
excess of the total price at which the Shares sold by such Holder were
offered to the public. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation.

SECTION 12
EQUITABLE RELIEF

The parties hereto agree and declare that legal remedies may be
inadequate to enforce the provisions of this Agreement and that equitable
relief, including specific performance and injunctive relief, may be used to
enforce such provisions.

SECTION 13
MISCELLANEOUS

(a) Notices. Any and all notices or any other communication provided
for herein shall be given in writing, delivered personally (including
delivery by courier or by facsimile if received during normal working hours)
or by registered or certified mail, addressed, if to the Company, to GameTech
International, Inc., 2209 W. 1st Street, Suite 113-114, Tempe, Arizona 85218,
Attention: General Counsel, and, if to the Holder, at the address indicated
for the Holder on the records of the Company or to such other address as may
be designated in writing by any

-10-

<PAGE>

such party. Except as otherwise provided in this Agreement, each such notice
sent by registered or certified mail with postage prepaid and properly
addressed shall be deemed given when delivered or on a date which is four (4)
days after it is mailed in any post office or branch post office regularly
maintained by the United States Postal Service.

(b) Amendment. No change in or modification of this Agreement shall
be valid unless the same shall be in writing and signed by the Company and
Majority Holders.

(c) Assignment. This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of the parties hereto.
This Agreement may not be assigned (i) by the Company without the prior
written consent of the Majority Holders or (ii) by any Holder without the
prior written consent of the Company.

(d) Waiver. No failure or delay on the part of the parties or any of
them in exercising any right, power or privilege hereunder, nor any course of
dealing between the parties or any of them shall operate as a waiver of any
such right, power or privilege nor shall any single or partial exercise of
any such right, power or privilege preclude the simultaneous or later
exercise of any other right, power or privilege. The rights and remedies
herein expressly provided are cumulative and are not exclusive of any rights
or remedies which the parties or any of them would otherwise have. No notice
to or demand on the Company in any case shall entitle the Company to any
other or further notice or demand in similar or other circumstamces or
constitute a waiver of the rights of the other parties or any of them to take
any other or further action in any circumstances without notice or demand.

(e) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.

(f) Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of Delaware without
regard to principles of conflict of laws.

(g) Filing. A copy of the Agreement and of all amendments hereto shall
be filed at the principal office of the Company.

(h) Termination. This Agreement may be terminated at any time by an
instrument in writing signed by the Company and the Majority Holders.

(i) Severability. In the event that any part of this Agreement shall
be held to be invalid or unenforceable, the remaining parts hereof shall
nevertheless continue to be valid and enforceable as though the invalid
portions were not a part hereof.

(j) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

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<PAGE>

(k) Attorneys' Fees. In any action or proceeding brought to enforce
any provision of this Agreement, or where any provision hereof is validly
asserted as a defense, the successful party shall be entitled to recover
reasonable attorneys' fees (including any fees incurred in any appeal) in
addition to its costs and expense and any other available remedy.

SIGNATURE PAGE FOLLOWS

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<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this
Registration Rights Agreement as of the day and year first above written.

The Company: GAMETECH INTERNATIONAL, INC.,
a Delaware corporation

By /s/ Clarence H. Thiesen
-------------------------------------
Name: Clarence H. Thiesen
------------------------------
Title: Chief Financial Officer
------------------------------

<PAGE>

Exhibit 10.6

DISTRIBUTION AGREEMENT

This Distribution Agreement ("Agreement") is hereby made and entered into
this 30 day of June, 1995, by and between Game Tech International
("GameTech"), a Delaware corporation, with principal offices located at 2209
W. 1st Street, Suite 113, Tempe, Arizona 85281 and Trend Gaming Systems,
("Distributor"), a Texas Limited Liability Company, with principal offices
located at 11006 Metric Blvd., Austin, TX 78758. GameTech and Distributor are
sometimes hereinafter referred to individually as a "Party" and collectively
as the "Parties".

WHEREAS, GameTech desires Distributor to act as a distributor of its
products and services within the Territory (as hereinafter defined) and
Distributor desires to be a distributor of Game Tech products and services
within the Territory, the Parties do hereby enter into this Agreement. For
and in consideration of the mutual covenants herein set forth, the Parties
agree as follows:

1. GRANT OF RIGHTS

1.1 GRANT OF EXCLUSIVITY. Subject to the terms and conditions of this
Agreement, GameTech hereby appoints Distributor as its exclusive distributor
of the products listed on EXHIBIT A hereto (the "Products") within geographic
region set forth on EXHIBIT B (the "Territory").

2. DUTIES AND RESPONSIBILITY OF GAMETECH

2.1 TRAINING. GameTech will train Distributor personnel in the sale and
operation of the Products.

2.2 INSTALLATION OF UNITS. GameTech will provide Distributor with the
installation specifications, such as dedicated phone line and electricity,
which shall be required to be provided by the customer. GameTech will provide
all equipment to operate the Products and will install the Products at the
customer's site. GameTech shall endeavor to accomplish all installations on a
timely basis.

2.3 ON-SITE TRAINING; PRODUCT SUPPORT. GameTech will provide on-site
training of customers, managers, floor clerks, cashiers and callers. GameTech
will provide 24 hour Hot-Line support for customers and will maintain
replacement parts at locations sufficient to respond adequately to customer
needs.

3. DUTIES AND RESPONSIBILITIES OF DISTRIBUTOR.

3.1 DUTY TO DISTRIBUTE AND PROMOTE. Distributor will act as GameTech's
exclusive distributor of the Products to prospective customers within the
Territory. Distributor shall promote the installation of units in the
Territory to the best of Distributor's ability. Distributor shall advertise
and/or promote the Products in a commercially reasonable manner and will
transmit GameTech product information and promotional materials to its
customers, as reasonably necessary. Distributor shall work with the customers
to assure their satisfaction with the units and shall report to GameTech
regarding customer's evaluations of the units.

3.2 SALES PROCEDURES. Upon receipt of a customer order, Distributor
will contact GameTech to schedule an installation date. Distributor will act
as liaison with the customer to assure that a dedicated phone line and
electricity are in place. Distributor will only provide GameTech approved
pricing information to prospective customers.

3.3 CONFLICT OF INTEREST. The Parties acknowledge that any efforts by
Distributor to sell competing products would constitute a conflict of
interest with respect to Distributor's obligations to market the Products. If
Distributor chooses to market, promote or distribute competitive products,
Distributor shall notify GameTech of its intent at least sixty (60) days
prior to commencing such activity, and GameTech shall have the right to
terminate this Agreement upon thirty (30) days notice to Distributor without
any liability to GameTech. Failure to so notify GameTech shall be shall be
deemed to be a material breach of this Agreement. A product shall be

<PAGE>

deemed to be competitive if it is an electronic bingo game of any sort or is
similar to any non-bingo game product listed on EXHIBIT A.

3.4 REPRESENTATIONS. Distributor shall limit its claims and
representations concerning the Products to those made by GameTech in its
published literature, and not make any claims or representations in excess of
such claims of GameTech.

4. COMPENSATION. GameTech shall pay Distributor commissions at the
following rates, as a percentage of net revenue received from the
installation caused by the Distributor.

Fixed Units and Hand Held:
(a) Installation at each Customer: 1st year = 10% Beginning
December 1, 1997 = 12%

5. CUSTOMER PRICING, ACCOUNTING AND PAYMENTS. GameTech will establish
customer pricing arrangements and handle all customer collections, except
where collection by Distributor is required by law or requested by GameTech
in writing. GameTech will wire transfer to Distributor all commissions due on
a weekly basis out of the funds paid to GameTech by the customers. GameTech
shall have no obligation to pay commissions to Distributor in advance of the
receipt by GameTech of payment from the relevant customer; however, GameTech
will inform Distributor of any past due customer accounts. GameTech will
provide a monthly accounting summary, no later than the twentieth (20th) day
of the following month. The Parties agree that all accounting summaries shall
be considered correct if not questioned in writing within sixty (60) days of
receipt of each summary. Distributor shall be entitled to audit, at
Distributor expense, the books and records of GameTech no more than once per
calendar year. Any such audit shall be limited to only such information as
shall be specifically required to verify the gross receipts received by
GameTech, from customers governed by this Agreement.

6. PROPRIETARY RIGHTS AND CONFIDENTIALITY.

6.1 PROPRIETARY RIGHTS. Distributor agrees that GameTech owns all
right, title, and interest in the Products and in all of GameTech's patents,
trademarks, trade names, inventions, copyrights and trade secrets relating to
the design, manufacture, operation or service of the Products. The use by
Distributor of any of these proprietary rights is authorized only for the
purposes herein set forth, and upon termination of this Agreement for any
reason such authorization shall cease.

6.2 NO RIGHT TO MANUFACTURE OR COPY. The Products are being installed
and/or sold by GameTech subject, in every case, to the condition that such
installation and/or sale does not convey any license, expressly or by
implication, to manufacture, duplicate or otherwise copy or reproduce the
Products. Distributor shall take appropriate steps with the customers, as
GameTech may request, to inform them of and assure compliance with these
restrictions. Distributor acknowledges that any violation of these provisions
is a material breach of this Agreement that shall entitle GameTech to obtain
equitable relief to terminate such unauthorized activities, including but not
limited to, preliminary and permanent injunctive relief, as well as money
damages.

6.3 CONFIDENTIALITY. The Parties acknowledge that by reason of their
relationship to each other hereunder each will have access to certain
information and materials concerning the other's business, plans, customers,
technology, and/or products that is confidential and of substantial value to
that Party, which value would be impaired if such information were disclosed
to third parties. Each Party agrees that it will not use in any way for its
own account or the account of any third party, nor disclose to any third
party, any such confidential information revealed to it by the other Party and
shall take every reasonable precaution to protect the confidentiality of such
information. Upon request by either Party, the other Party shall advise
whether or not it considers any particular information or materials to be
confidential. Distributor shall not publish any

-2-
<PAGE>

technical description of the Products beyond the description published by
GameTech. Upon termination of this Agreement, there shall be no use or
disclosure by a Party of any confidential information of the other Party, and
neither Party shall manufacture or have manufactured any devices, components
or assemblies utilizing any of the other Party's confidential information.

7. TRADEMARKS AND TRADE NAMES. During the term of this Agreement,
Distributor shall have the right to indicate to the public that it is an
authorized distributor of GameTech Products and to advertise the Products to
potential customers under the trademarks, marks, and trade names that
GameTech may adopt from time to time ("GameTech's Trademarks"). Distributor
shall not alter or remove any of GameTech's Trademarks applied to the
Products at the factory. Nothing herein shall grant to Distributor any right,
title or interest in GameTech's Trademarks. At no time during or after the
term of this Agreement shall Distributor challenge or assist others to
challenge GameTech's Trademarks or the registration thereof or attempt to
register any trademarks, marks or trade names confusingly similar to those of
GameTech.

8. GENERAL PROVISIONS.

8.1 ASSIGNMENT. A mutually agreed consideration for GameTech's
entering into this Agreement is the reputation, business standing, and
goodwill already honored and enjoyed by Distributor under its present
ownership, and accordingly, Distributor agrees that its rights and
obligations under this Agreement may not be transferred or assigned directly
or indirectly without the prior written consent of GameTech. Subject to the
foregoing sentence, this Agreement shall be binding upon and inure to the
benefit of the parties hereto, their successors and assigns.

8.2 NOTICES. Any notice or other communication shall be sufficiently
given if sent by registered or certified mail, or by facsimile transmittal
if receipt is electronically confirmed or by courier, postage prepaid (with
confirmation of receipt), or hand delivery (with confirmation of receipt) to
the respective address of the Parties provided above, or such other addresses
as shall be noticed during the term of this Agreement.

8.3 RELATIONSHIP OF THE PARTIES. The relationship of GameTech and
Distributor established by this Agreement is that of independent contractors,
and nothing contained in this Agreement shall be construed to (i) give either
party the power to direct and control the day-to-day activities of the other,
(ii) constitute the parties as partners, joint ventures, co-owners or
otherwise as participants in a joint or common undertaking, or (iii) allow
Distributor to create or assume any obligation on behalf of GameTech for any
purpose whatsoever. All financial obligations associated with Distributor's
business are the sole responsibility of Distributor. Distributor shall be
solely responsible for, and shall indemnify and hold GameTech free and
harmless from, any and all claims, damages or lawsuits (including GameTech's
reasonable attorney's fees) arising out of the acts of Distributor, its
employees or its agents.

8.4 TERM AND TERMINATION.

(a) TERM. This Agreement shall continue in force for a team commencing
on the date first written above until December 31, 1998, unless terminated
earlier under the provisions of this Agreement. The term of this Agreement
shall automatically be extended for an additional one year. Any extension
after such additional one year shall only be by mutual agreement of the
Parties.

(b) TERMINATION FOR CAUSE. If either party defaults in the performance
of any provision of this Agreement, then the non-defaulting party may give
written notice to the defaulting party that if the default is not cured
within thirty (30) days the Agreement will be terminated. If the
non-defaulting party gives such notice and the default is not cured during
the thirty (30) day period, then this Agreement shall terminate immediately
upon notice by the non-defaulting party.

-3-

<PAGE>

(c) TERMINATION FOR INSOLVENCY. This Agreement shall terminate
automatically, without notice, (i) upon the institution by or against
Distributor of insolvency, receivership or bankruptcy proceedings or any
other proceedings for the settlement of Distributor's debts, (ii) upon
Distributor's making an assignment for the benefit of creditors, or (iii)
upon Distributor's dissolution.

(d) RETURN OF MATERIALS. All trademarks, marks, trade names, patents,
copyrights, designs, drawings, formulas or other data, photographs, samples,
literature, and sales aids of every kind shall remain the property of GameTech.
Within thirty (30) days after the termination of this Agreement, Distributor
shall prepare all such items in its possession for shipment, as GameTech may
direct, at GameTech's expense. Distributor shall not make or retain any
copies of any confidential items or information which may have been entrusted
to it. Effective upon the termination of this Agreement, Distributor shall
cease to use all trade-marks and trade names of GameTech.

(e) SURVIVAL OF CERTAIN TERMS. The provisions of Sections 1, 3, 4, 5,
6, 7 and 8 shall survive the expiration or termination of this Agreement for
any reason. Except as otherwise provided in this Agreement, all other rights
and obligations of the Parties shall cease upon termination of this
Agreement. In the event that of an acquisition of GameTech should occur, the
provisions of this Agreement shall remain in effect.

8.5 WAIVER; TERMINATION. A waiver by either party of any of the
terms or conditions of this Agreement in any instance shall not be construed
to be a waiver of such term or condition in the future, or any subsequent
breach thereof; all remedies, rights, undertakings, obligations and
agreements contained in this Agreement shall be cumulative, and none of them
shall be in limitation of any other remedy, right, undertaking, obligation or
agreement of either Party.

8.6 ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the Parties hereto relating to the subject matter herein
contained, and this Agreement cannot be changed, rescinded or terminated
except in writing signed by both Parties.

8.7 HEADINGS. The subject headings of the sections and
subsections of this Agreement are included for convenience of reference only
and shall not affect the construction or interpretation of any of its
provisions.

8.8 SEVERABILITY. If any provision of this Agreement is held
invalid or unenforceable by any court of final jurisdiction, it is the intent
of the parties that all other provisions of this Agreement be construed to
remain fully valid, enforceable and binding on the partiesment construed as
if such unenforceable provision had never been contained herein.

8.9 ATTORNEY'S FEES. The prevailing party in any legal action
brought by one party against the other and arising out of this Agreement
shall be entitled, in addition to any other rights and remedies it may have,
to reimbursement for its expenses, including court costs and reasonable
attorneys' fees.

8.10 APPLICABLE LAW AND VENUE. This Agreement shall be construed
according to the internal laws, and not the law of conflicts, of the State of
Arizona. The Parties hereto irrevocably consent that any legal action or
proceeding involving this Agreement shall be brought and enforced in any
state or federal court in Maricopa County, Arizona. By its execution and
delivery of this Agreement, each Party hereby submits to and accepts
generally and unconditionally the jurisdiction of the foregoing courts.

8.11 AUTHORIZED SIGNATORY; COUNTERPARTS. Each Party represents to
the other that the person signing on its behalf is authorized to sign on
behalf of and to bind such Party to this Agreement. This

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<PAGE>

Agreement may be executed in two or more counterparts, each of which shall be
deemed an original and all of which together shall constitute one instrument.

IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of
the date first above written.

"GameTech" "Distributor" Trend Gaming Systems, LLC

GameTech International, Inc. /s/ [Illegible]
------------------------------

By: /s/ Gary A. Held By: /s/ [Illegible]
------------------------ ----------------------------
Authorized Officer Authorized Officer

-5-

<PAGE>

EXHIBIT A
- ----------

PRODUCTS

GameTech Fixed Bingo Unit

GameTech Hand Held Units upon availability

-6-

<PAGE>

EXHIBIT B
- ----------

TERRITORY

State of Texas

--Except where jointly agreed and documented by the GameTech Vice
President of Sales and the Distributor.

-7-

<PAGE>

GAMETECH INTERNATIONAL DISTRIBUTOR AGREEMENT

This agreement entered into this 1st day of June 1994 between M&M operators
(M&M) of Jackson, MS and GameTech International, Inc.(GTI) of Tempe, AZ.

M&M agrees to distribute the GTI Fixed Base Bingo System and the GTI Hand
Held Unit exclusively. M&M may market and distribute other products so long
as they are not competitive systems to GTI.

M&M will demonstrate the GameTech Video Bingo System in the States of
Mississippi, Oklahoma and Louisiana. Additional states may be mutually agreed
upon by both parties at a later date and will then be identified by an
addendum to this agreement.

In the state of Mississippi, M&M agrees to pay GTI $60.00 per week per
machine installed unless specific arrangements are made in writing on a hall
by hall basis. GTI will invoice M&M weekly for the previous week ending on
Sunday and send reports of weekly activity via Fed Ex. M&M in turn will remit
payment for Mississippi halls weekly via Fed Ex to arrive GTI no later than
Friday of each week. Any receivables due GTI in excess of 30 days from date
of receipt of GTI billing will be assessed a penalty of 12% per annum,
subject to prime rate fluctuation.

In the states of Oklahoma and Louisiana, GTI will compensate M&M in the
amount of 8% of the amount paid to GTI. This payment will be made by check to
M&M and paid on the 1st and the 15th of each month on the moneys deposited to
GTI's account. These payments will be sent via Fed Ex to M&M.

In the state of Louisiana, direct labor charge and local distributor
commissions of 40 cents per machine rented per session will be deducted from
local distributor's weekly payments to GTI.

M&M agrees to provide assistance in collections, when necessary.

This agreement shall remain in effect as long as the GameTech Systems (or
it's successor's systems) are operating in the halls.

GAMETECH INTERNATIONAL, INC. M&M OPERATORS

/s/ illegible /s/ illegible
- ---------------------------- --------------------------

<PAGE>

WELLS FARGO BANK REVOLVING LINE OF CREDIT NOTE

$3,000,000 Phoenix, Arizona
April 11, 1997

FOR VALUE RECEIVED, the undersigned GAMETECH INTERNATIONAL, INC.
("Borrower") promises to pay to the order of WELLS FARGO BANK, NATIONAL
ASSOCIATION ("Bank") at its office at Arizona RCBO 803839, 100 West
Washington, Phoenix, AZ 85003, or at such other place as the holder hereof
may designate. In lawful money of the United States of America and in
immediately available funds, the principal sum of $3,000,000.00 or so much
thereof as may be advanced and be outstanding, with interest thereon, to be
computed on each advance from the date of its disbursement as set forth
herein.

DEFINITIONS:

As used herein, the following terms shall have the meanings set forth
after each, and any other term defined in this Note shall have the meaning
set forth at the place defined:

(a) "Business Day" means any day except a Saturday, Sunday or any other
day on which commercial banks in Arizona are authorized or required by law to
close.

(b) "Fixed Rate Term" means a period commencing on a Business Day and
continuing for 1, 2, 3 or 6 months, as designated by Borrower, during which
all or a portion of the outstanding principal balance of this Note bears
interest determined in relation to LIBOR; provided, however, that no Fixed
Rate Term may be selected for a principal amount less than $50,000.00; and
provided further, that no Fixed Rate Term shall extend beyond the scheduled
maturity date hereof. If any Fixed Rate Term would end on a day which is not
a Business Day, then such Fixed Rate Term shall be extended to the next
succeeding Business Day.

(c) "LIBOR" means the rate per annum (rounded upward, if necessary, to
the nearest whole 1/8 of 1%) determined by dividing Base LIBOR by a
percentage equal to 100% less any LIBOR Reserve Percentage.

(i) "Base LIBOR" means the rate per annum for United States dollar
deposits quoted by Bank as the Inter-Bank Market Offered Rate, with the
understanding that such rate is quoted by Bank for the purpose of calculating
effective rates of interest for loans making reference thereto, on the first
day of a Fixed Rate Term for delivery of funds on said date for a period of
time approximately equal to the number of days in such Fixed Rate Term and in
an amount approximately equal to the principal amount to which such Fixed
Rate Term applies. Borrower understands and agrees that Bank may base its
quotation of the Inter-Bank Market Offered Rate upon such offers or other
market indicators of the Inter-Bank Market as Bank in its discretion deems
appropriate including, but not limited to, the rate offered for U.S. dollar
deposits on the London Inter-Bank Market.

(ii) "LIBOR Reserve Percentage" means the reserve percentage
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for "Eurocurrency Liabilities" (as defined in Regulation D of the
Federal Reserve Board, as amended), adjusted by Bank for expected changes in
such reserve percentage during the applicable Fixed Rate Term.

(d) "Prime Rate" means at any time the rate of interest most recently
announced within Bank at its principal office as its Prime Rate, with the
understanding that the Prime Rate is one of Bank's base rates and serves
as the basis upon which effective rates of interest are calculated for those
loans making reference thereto, and is evidenced by the recording thereof
after its announcement in such internal publication or publications as Bank
may designate.

INTEREST

(a) INTEREST. The outstanding principal balance of this Note shall bear
interest (computed on the basis of a 365-day year, actual days elapsed)
either (i) at a fluctuating rate per annum .50000% above the Prime Rate in
effect from time to time, or (ii) at a fixed rate per annum determined by
Bank to be 2.50000% above LIBOR in effect on the first day of the applicable
Fixed Rate Term. When interest is determined in relation to the Prime Rate,
each change in the rate of interest hereunder shall become effective on the
date each Prime Rate change is announced within Bank. With respect to each
LIBOR selection option selected hereunder, Bank is hereby authorized to note
the date, principal amount, interest rate and Fixed Rate Term applicable
thereto and any payments made thereon on Bank's books and records (either
manually or by electronic entry) and/or on any schedule attached to this
Note, which notations shall be prima facie evidence of the accuracy of the
information noted.

(b) SELECTION OF INTEREST RATE OPTIONS. At any time any portion of this
Note bears interest determined in relation to LIBOR, it may be continued by
Borrower at the end of the Fixed Rate Term applicable thereto so that all or
a portion thereof bears interest determined in relation to the Prime Rate or
to LIBOR for a new Fixed Rate Term designated by Borrower. At any time any
portion of this Note bears interest determined in relation to the Prime Rate,
Borrower may convert all or a portion thereof so that it bears interest
determined in relation to LIBOR for a Fixed Rate Term designated by Borrower.
At such time as Borrower requests an advance hereunder or wishes to select a
LIBOR option for all or a portion of the outstanding principal balance
hereof, and at the end of each Fixed Rate Term, Borrower shall give Bank
notice specifying: (i) the interest rate option selected by Borrower, (ii) the

Page 1

<PAGE>

principal amount subject thereto; and (iii) for each LIBOR selection, the
length of the applicable Fixed Rate Term. Any such notice may be given by
telephone so long as, with respect to each LIBOR selection, (A) bank receives
written confirmation from Borrower not later than 3 Business Days after such
telephone notice is given, and (B) such notice is given to Bank prior to
10:00 a.m., California time, on the first day of the Fixed Rate Term. For
each LIBOR option requested hereunder, Bank will quote the applicable fixed
rate to Borrower at approximately 10:00 a.m., California time, on the first
day of the Fixed Rate Term. If Borrower does not immediately accept the rate
quoted by Bank, any subsequent acceptance by Borrower shall be subject to a
redetermination by Bank of the applicable fixed rate; provided, however, that
if Borrower fails to accept any such rate by 11:00 a.m., California time, on
the Business Day such quotation is given, then the quoted rate shall expire
and Bank shall have no obligation to permit a LIBOR option to be selected on
such day. If no specific designation of interest is made at the time any
advance is requested hereunder or at the end of any Fixed Rate Term, Borrower
shall be deemed to have made a Prime Rate interest selection for such advance
or the principal amount to which such Fixed Rate Term applied.

(i) If Bank at any time shall determine that for any reason adequate
and reasonable means do not exist for ascertaining LIBOR, then Bank shall
promptly give notice thereof to Borrower. If such notice is given and until
such notice has been withdrawn by Bank, then (A) no new LIBOR option may be
selected by Borrower, and (B) any portion of the outstanding principal
balance hereof which bears interest determined in relation to LIBOR,
subsequent to the end of the Fixed Rate Term applicable thereto, shall bear
interest determined in relation to the Prime Rate.

(ii) If any law, treaty, rule, regulation or determination of a court
or governmental authority or any change therein or in the interpretation or
application thereof (each, a "Change of Law") shall make it unlawful for Bank
(A) to make LIBOR options available hereunder, or (B) to maintain interest
rates based on LIBOR, then in the former event, any obligation of Bank to
make available such unlawful LIBOR options shall immediately be cancelled,
and in the latter event, any such unlawful LIBOR-based interest rates then
outstanding shall be converted, at Bank's option, so that interest on the
portion of the outstanding principal balance subject thereto is determined in
relation to the Prime Rate; provided, however, that if any such Change in Law
shall permit any LIBOR-based interest rates to remain in effect until the
expiration of the Fixed Rate Term applicable thereto, then such permitted
LIBOR-based interest rates shall continue in effect until the expiration of
such Fixed Rate Term. Upon the occurrence of any of the foregoing events,
Borrower shall pay to Bank immediately upon demand such amounts as may be
necessary to compensate Bank for any fines, fees, charges, penalties or other
costs incurred or payable by Bank as a result thereof and which are
attributable to any LIBOR options made available to Borrower hereunder, and
any reasonable allocation made by Bank among its operations shall be
conclusive and binding upon Borrower.

(iii) If any Change in Law or compliance by Bank with any request or
directive (whether or not having the force of law) from any central bank or
other governmental authority shall:

(A) subject Bank to any tax, duty or other charge with respect to
any LIBOR options, or change the basis of taxation of payments to Bank of
principal, interest, fees or any other amount payable hereunder (except for
changes in the rate of tax on the overall net income of Bank); or

(B) impose, modify or hold applicable any reserve, special deposit,
compulsory loan or similar requirement against assets held by, deposits or
other liabilities in or for the account of, advances or loans by, or any
other acquisition of funds by any office of Bank; or

and the result of any of the foregoing is to increase the cost to Bank of
making, renewing or maintaining any LIBOR options hereunder and/or to reduce
any amount receivable by Bank in connection therewith, then in any such case,
Borrower shall pay to Bank immediately upon demand such amounts as may be
necessary to compensate Bank for any additional costs incurred by Bank and/or
reductions in amounts received by Bank which are attributable to such LIBOR
options. In determining which costs incurred by Bank and/or reductions in
amounts received by Bank are attributable to any LIBOR options made available
to Borrower hereunder, any reasonable allocation made by Bank among its
operations shall be conclusive and binding upon Borrower.

(d) PAYMENT OF INTEREST. Interest accrued on this Note shall be payable
on the 11th day of each month, commencing May 11, 1997.

(e) DEFAULT INTEREST. From and after the maturity date of this Note, or
such earlier date as all principal owing hereunder becomes due and payable by
acceleration or otherwise, the outstanding principal balance of this Note
shall bear interest until paid in full at an increased rate per annum
(computed on the basis of a 360-day year, actual days elapsed) equal to 4%
above the rate of interest from time to time applicable to this Note.

BORROWING AND REPAYMENT:

(a) BORROWING AND REPAYMENT. Borrower may from time to time during the
term of this Note borrow, partially or wholly repay its outstanding
borrowings, and reborrow, subject to all of the limitations, terms and
conditions of this Note and of any document executed in connection with or
governing this Note; provided, however, that the total outstanding borrowings
under this Note shall not at any time exceed the principal amount stated
above. The unpaid principal balance of this obligation at any time shall be
the total amounts advanced hereunder by the holder hereof less the amount of
principal payments made hereon by or for any Borrower, which balance may be
endorsed hereon.

Page 2
<PAGE>

from time to time by the holder. The outstanding principal balance of this
Note shall be due and payable in full on April 11, 1998.

(b) ADVANCES. Advances hereunder, to the total amount of the principal
sum available hereunder, may be made by the holder at the oral or written
request of (i) CLARENCE THIESEN, any one acting alone, who are authorized
to request advances and direct the disposition of any advances until written
notice of the revocation of such authority is received by the holder at the
office designated above, or (ii) any person, with respect to advances
deposited to the credit of any account of any Borrower with the holder, which
advances, when so deposited, shall be conclusively presumed to have been made
to or for the benefit of each Borrower regardless of the fact that persons
other than those authorized to request advances may have authority to draw
against such account. The holder shall have no obligation to determine
whether any person requesting an advance is or has been authorized by any
Borrower.

(c) APPLICATION OF PAYMENTS. Each payment made on this Note shall be
credited first, to any interest then due and second, to the outstanding
principal balance hereof. All payments credited to principal shall be applied
first, to the outstanding principal balance of this Note which bears interest
determined in relation to the Prime Rate, if any, and second, to the
outstanding principal balance of this Note which bears interest, determined
in relation to LIBOR, with such payments applied to the older Fixed Rate Term
first.

PREPAYMENT:

(a) PRIME RATE. Borrower may prepay principal on any portion of this
Note which bears interest determined in relation to the Prime Rate at any
time, in any amount and without penalty.

(b) LIBOR. Borrower may prepay principal on any portion of this Note
which bears interest determined in relation to LIBOR at any time and in the
minimum amount of $50,000.00: provided however, that if the outstanding
principal balance of such portion of this Note is less than said amount, the
minimum prepayment amount shall be the entire outstanding principal balance
thereof. In consideration of Bank providing this prepayment option to
Borrower, or if any such portion of this Note shall become due and payable at
any time prior to the last day of the Fixed Rate Term applicable thereto by
acceleration or otherwise, Borrower shall pay to Bank immediately upon demand
a fee which is the sum of the discounted monthly difference for each month
from the month of prepayment through the month in which such Fixed Rate Term
matures, calculated as follows for each such month:

(i) DETERMINE the amount of interest which would have accrued each
month on the amount prepaid at the interest rate applicable to such amount
had it remained outstanding until the last day of the Fixed Rate Term
applicable thereto.

(ii) SUBTRACT from the amount determined in (i) above the amount of
interest which would have accrued for the same month on the amount prepaid
for the remaining term of such Fixed Term Rate at LIBOR in effect on the date
of prepayment for new loans made for such term and in a principal amount
equal to the amount prepaid.

(iii) if the result obtained in (ii) for any month is greater than
zero, discount that difference by LIBOR used in (ii) above.

Each Borrower acknowledges that prepayment of such amount may result in Bank
incurring additional costs, expenses and/or liabilities, and that it is
difficult to ascertain the full extent of such costs, expenses and/or
liabilities. Each Borrower, therefore, agrees to pay the above-described
prepayment fee and agrees that said amount represents a reasonable estimate
of the prepayment costs, expenses and/or liabilities of Bank. If Borrower
fails to pay any prepayment fee when due, the amount of such prepayment fee
shall thereafter bear interest until paid at a rate per annum 4.000% above
the Prime Rate in effect from time to time (computed on the basis of a
360-day year, actual days elapsed). Each change in the rate of interest on
any such past due prepayment fee shall become effective on the date each
Prime Rate change is announced within Bank.

EVENTS OF DEFAULT:

The occurrence of any of the following shall constitute an "Event of
Default" under this Note:

(a) The failure to pay any principal, interest, fees or other charges
when due hereunder or under any contract, instrument or document executed in
connection with this Note.

(b) The filing of a partition by or against any Borrower, any guarantor
of this Note or any general partner or joint venturer in any Borrower which
is a partnership or a joint venture (with each such guarantor, general
partner and/or joint venturer referred to herein as a "Third Party Obligor")
under any provisions of the Bankruptcy Reform Act, Title 11 of the United
States Code, as amended or recodified from time to time, or under any similar
or other law relating to bankruptcy, insolvency, reorganization or other
relief for debtors; the appointment of a receiver, trustee, custodian or
liquidator of or for any part of the assets or property of any Borrower or
Third Party Obligor; any Borrower or Third Party Obligor becomes insolvent,
makes a general assignment for the benefit of creditors or is generally not
paying its debts as they become due; or any attachment or like levy on any
property of any Borrower or Third Party Obligor.

(c) The death or incapacity of any individual Borrower or Third Party
Obligor, or the dissolution or liquidation of any Borrower or Third Party
Obligor which is a corporation, partnership, joint venture or other type of
entity.

PAGE 3

<PAGE>

(d) Any default in the payment or performance of any obligation, or any
defined event of default, under any provisions of any contract, instrument or
document pursuant to which any Borrower or Third Party Obligor has incurred
any obligation for borrowed money, any purchase obligation, or any other
liability of any kind to any person or entity, including the holder.

(e) Any financial statement provided by any Borrower or Third Party
Obligor to Bank proves to be incorrect, false or misleading in any material
respect.

(f) Any sale or transfer of all or a substantial or material part of
the assets of any Borrower or Third Party Obligor other than in the ordinary
course of its business.

(g) Any violation or breach of any provision of, or any defined event
of default under, any addendum to this Note or any loan agreement, guaranty,
security agreement, deed of trust, mortgage or other document executed in
connection with or securing this Note.

MISCELLANEOUS:

(a) REMEDIES. Upon the occurrence of any Event of Default, the holder
of this Note, at the holder's option, may declare all sums of principal and
interest outstanding hereunder to be immediately due and payable without
presentment, demand, notice of nonperformance, notice of protest, protest or
notice of dishonor, all of which are expressly waived by each Borrower, and
the obligation, if any, of the holder to extend any further credit hereunder
shall immediately cease and terminate. Each Borrower shall pay to the holder
immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees and all allocated costs of the holder's in-house counsel),
expended or incurred by the holder in connection with the enforcement of the
holder's rights and/or the collection of any amounts which become due to the
holder under this Note, and the prosecution or defense of any action in any
way related to this Note, including without limitation, any action for
declaratory relief, whether incurred at the trial or appellate level, in an
arbitration proceeding or otherwise, and including any of the foregoing
incurred in connection with any bankruptcy proceeding (including without
limitation, any adversary proceeding, contested motion or motion brought by
Bank or any other person) relating to any Borrower or any other person or
entity.

(b) OBLIGATIONS JOINT AND SEVERAL. Should more than one person or
entity sign this Note as a Borrower, the obligations of each such Borrower
shall be joint and several.

IN WITNESS WHEREOF, the undersigned has executed this Note as of the date
first written above.

GAMETECH INTERNATIONAL, INC.

By: ILLEGIBLE
---------------------------------------
Title: PRESIDENT & CEO
------------------------------------

PAGE 4

<PAGE>

VIDEO BINGO SYSTEM PLACEMENT AGREEMENT

Agreement made this ____ day of ______________, 199_, by and between GameTech
International, Inc., a Delaware Corporation, hereinafter referred to as
"GTI" and _________________________________, located at ________________
____________________ hereinafter referred to as "Customer."

WITNESSETH:

Customer agrees to allow placement of the GameTech Video Bingo System,
including players units, caller unit, sales units, communications units, and
tables in a number specified below, within the Customer's facility, with the
following terms and conditions:

1. The GameTech Video Bingo System shall remain the property of GameTech.
This agreement allows placement of GTI's Video Bingo System within the
Customer's gaming facility for certain consideration, as set forth below.

2. This agreement shall be for a period ______ years from the date of it's
execution. Any party may terminate this agreement by giving thirty (30) day
written notice to the other party.

3. As consideration for placement of the GTI System at the Customer's
facility, GTI shall receive _________ percent of gross revenue from the GTI
System. Customer agrees that payment must be made weekly to GameTech, no
later than Tuesday of each week for revenues collected through Sunday of the
previous week. Payment is to be made via wire transfer to GameTech's
designated bank account. Any non payment of weekly amounts will accrue a
penalty at the rate of 1.8% per month on the late amount plus a $150.00
administrative processing fee. Any nonpayment that exceeds 10 days will
result in GTI shutting down the system via modem until account is made
current.

4. The Customer will allow unrestricted access to the GameTech System to GTI
representatives for onsite maintenance. The Customer shall provide continuous
data access via telephone line for remote access to the system.

5. GTI will provide on-going training as required by the Customer to maximize
profitability of the system.

6. GTI will provide all hardware and software support, including upgrades,
free of charge to the Customer during the term of this agreement. All parts
and maintenance of the GTI System will be provided free of charge during the
term of this agreement.

7. GTI and the Customer agree that _____________ units will be placed at their
facility located at _____________________________.

8. The terms and conditions of this agreement shall be governed by the laws of
the State of Arizona.

GAMETECH INTERNATIONAL, INC. CUSTOMER

By: _______________________ By: _______________________
Manager

<PAGE>

GAMETECH INTERNATIONAL, INC.
SUBLEASE AGREEMENT

Trend Gaming Systems, LLC and the GameTech International, Inc. agree:

BASIC SUBLEASE INFORMATION

In addition to the terms, which are defined elsewhere in this
Sublease, the following defined terms are used in this Sublease:

(a) DATE: October 1,1997
-------------------------------

(b) TENANT: GameTech International, Inc.
-------------------------------

(c) TENANTS ADDRESS: 2209 W. 1st St. Suite 113-114
-------------------------------
Tempe, AZ 85281
-------------------------------

(d) SUBLESSOR: Trend Gaming Systems, LLC
-------------------------------

(e) SUBLESSOR'S ADDRESS: 11006 Metric Blvd.
-------------------------------
Austin, TX 78758
-------------------------------

(f) PREMISES ADDRESS: 11006 Metric Blvd.
-------------------------------
Austin, TX 78758
-------------------------------

(g) COUNTY: Travis County
-------------------------------

(h) COMMENCEMENT DATE: October 1, 1997
-------------------------------

(i) EXPIRATION DATE: February 28, 1998
-------------------------------

(j) TERM: Five Months
-------------------------------

(k) MONTHLY BASE RENT: $2,939.46
-------------------------------

<PAGE>

THIS SUBLEASE is made and entered into as of the date listed above,
by and between TREND GAMING SYSTEMS, LLC ("Trend") and Sublessee GAMETECH
INTERNATIONAL, INC. ("GameTech"), a Delaware corporation, as Tenant.

THE PREMISES which is the subject of this Sublease is situated at
Kramer Lane 65, Section 2, Block B, Lot 12 and contains an area of
approximately 5,400 square feet. A map of the exterior of the Premises is
attached herein as Exhibit "A". The Premises contains the offices of Trend
Gaming Systems and the subject area of this Sublease containing offices of
Game Tech International, Inc. A map of the interior of the premises
containing the spatial divisions between Trend and GameTech is attached
herein as Exhibit "B".

ATTACHED HERETO as Exhibit "C" (but not incorporated as a part of
the terms and conditions of the subject Sublease between Trend and GameTech)
is that certain Lease Agreement entered into September 1, 1995 giving Trend
it's right of possession to the Premisis shown in Exhibit "A".

WITNESSETH: That Trend, in consideration of the covenants of said
Sublease hereinafter set forth, does sublease the Premises to GameTech under
the terms and conditions set forth and grants to GameTech the full and quiet
enjoyment of GameTech's portion of the Premises throughout the term of the
Sublease.

1. TERM.

The term of said Sublease is for the period specified above,
commencing on the Commencement Date and ending on the Expiration Date.

2. MONTHLY RENTAL.

The monthly rental on the Premises shall be the Monthly Base Rent
specified above. The monthly rental payments are due on or before the first
day of each calendar month during the term herein without any prior demand.

3. USE OF PREMISES.

The Premises described above is subleased to GameTech for the
purpose of operating an office for the manufacturing and distribution of
electronic video bingo equipment.

4. WAIVER OF SUBROGATION.

Trend and GameTech each hereby release and relieve the other, and
waive their entire right of recovery against the other for loss or damage
that may occur to the Premises, improvements therein, or to personal property
of Trend or GameTech within the Premises, by reason of fire, the elements or
other casualty regardless of the cause or origin, including the negligence of
Trend or GameTech or their agents, employees, contractors and/or invitees.
Trend and GameTech shall give notice to their respective insurance carriers,
if required, that the foregoing mutual waiver of subrogation is contained in
this Sublease.

5. REPAIRS.

(a) Except as otherwise provided herein, Trend agrees to pay 25%
and GameTech agrees to pay 75% for all necessary maintenance
work to the interior portions of the Premises.

(b) Except as otherwise provided, GameTech accepts the Premises in
its present condition.

6. SERVICES/UTILITIES.

Trend agrees to pay 25% and Game Tech agrees to pay 75% for all
water, gas, heat, light, power, sewer charges, garbage collection and all
other services and utilities supplied to the Premises, together with any
sales taxes thereon.

<PAGE>

7. ASSIGNMENTS/SUBLETTING

Trend agrees that it will not assign or sublet in whole or part any
portion of the subject sublet Premises without the prior written consent of
GameTech, which said consent will not be unreasonably withheld.

8. RENEWAL OF LEASE.

Trend and GameTech agree to negotiate in good faith a renewal of
this Sublease if requested by either party at least thirty (30) days prior to
the Expiration Date. The renewed Sublease, if any, shall be upon such terms
and at such rental as the parties may agree.

9. BREACH.

(a) The failure of either party to fully perform under any or all
of the terms and conditions of this Sublease shall constitute a
breach of this Sublease, entitling the offended party to take any
and all such action provided by law.

(b) Written notice of any breach alleged under this Sublease shall
be given to the defaulting party. If the defaulting party has not
cured the default at the end of five (5) days or for breaches which
cannot be cured in five (5) days, has not commenced action to cure
the breach and completed such action with reasonable promptness,
then the other party may take any and all such action provided by
law, and shall be entitled to recover all of its damages including
an additional amount for attorneys' fees and costs.

10. SURRENDER OF PREMISES.

GameTech shall, upon the expiration of the term of the Sublease, or
upon an earlier termination hereof, quit and surrender the Premises in good
order or condition and repair, reasonable wear and tear and acts of God
excepted.

11. SAVINGS CLAUSE.

If any term or provision of this Sublease or any application thereof
shall be declared or held to be invalid or unenforceable, then the remaining
terms and provisions of this Lease shall not be affected thereby.

12. LIEN PROTECTION.

(a) GameTech agrees that at no time during the term of this
Sublease will it permit a lien or encumbrance arising from any act
or omission on its part of any kind or nature to come into
existence against the Premises. If at any time a lien or
encumbrance arising from an act or omission of GameTech is filed
against the Premises, GameTech shall promptly discharge said lien
or encumbrance, and if said lien or encumbrance has not been
removed within thirty (30) days from the date it is filed or
recorded against the Premises, GameTech agrees that it will
deposit with Trend in cash or a satisfactory bond in an amount
sufficient to satisfy the claim of the person or concern filing the
lien or encumbrance and shall leave the same on deposit with Trend
until said lien is discharged.

(b) Trend agrees that at no time during the term of this Sublease
will it permit a lien or encumbrance arising from any act or
omission on its part of any kind or nature to come into existence
against the Premises. If at any time a lien or encumbrance arising
from an act or omission of Trend is filed against the Premises,
Trend shall promptly discharge said lien or encumbrance, and if
said lien or encumbrance has not been removed within thirty (30)
days from the date it is filed or recorded against the Premises,
Trend agrees that it will deposit with GameTech in cash or a
satisfactory bond in an amount sufficient to satisfy the claim of

3
<PAGE>

the person or concern filing the lien or encumbrance and shall leave
the same on deposit with GameTech until said lien is discharged.

13. NOTICES.

Any notices or demands to be given hereunder shall be given to Trend or
to GameTech at the addresses set forth in the Basic Sublease Information or
at such other address as may later be provided.

14. WAIVER.

No waiver of any breach of any one of the agreements, terms, conditions
or covenants of this Sublease by Trend or GameTech shall be deemed to imply
or constitute a waiver of any other agreement, term, condition or covenant of
this Sublease. The failure of either party to insist on strict performance of
any agreement, term, condition or covenant, herein set forth, shall not
constitute or be construed as a waiver of the rights of either thereafter to
enforce any other default of such agreement, term, condition or covenant;
neither shall such failure to insist upon strict performance be deemed
sufficient grounds to enable either pare to forego or subvert or otherwise
disregard any other agreement term, condition or covenant of this Sublease.

15. ESTOPPEL CERTIFICATE.

Whenever requested to do so by either party, the other party to this
Sublease shall execute and deliver to the requesting entity within 10 days
after receipt of a written request a written statement which shall recite all
of the following, if true, or which shall recite in detail, in what
particular respect any of these items are not true:

(a) That this Sublease is in full force and effect;

(b) That this Sublease is in good standing;

(d) That no advance rent payments have been made, or if any were paid.
The specific period of time for which they were paid;

(e) That this Sublease has not been amended or changed;

(f) That the party providing the statement has no outstanding claims or
demands against the other party under the terms and provisions of this
Sublease;

(g) Such other information about the then status of this Sublease as
might be reasonably requested.

16. SUCCESSORS.

All of the agreements, terms, conditions, and covenants set forth in
this Sublease shall inure to the benefit of and be binding upon the heirs,
legal representatives, successors, executors and assigns of the parties,
except that no assignment of Sublease in violation of the provisions of this
Sublease shall vest any right in the assignee.

17. ENTIRE AGREEMENT.

This Sublease constitutes the entire agreement of the parties hereto. No
representations, promises, terms, conditions, obligations or warranties
whatsoever referring to the subject matters hereof, other than those
expressly set forth herein, shall be of any binding legal force or effect
whatsoever. No

<PAGE>

modification, change or alteration of this Sublease shall be of any legal
force or effect whatsoever unless in writing, signed by all the parties
hereto. Wherever used herein, the singular shall include the plural, and the
use of any gender shall be applicable to all genders.

IN WITNESS WHEREOF, the parties have hereunto set their hands, or caused
this Sublease to be executed by their authorized agent this 1 day of October,
1997.

GameTech International, Inc.: /s/ [Illegible]
______________________________

Trend Gaming Systems: /s/ [Illegible]
______________________________________

<PAGE>

EXHIBIT A

<PAGE>

LEGAL DESCRIPTION: Kramer Lane 65, Section 2, Block B, Lot 12
(less 2,090 square feet)

ADDRESS: 11006 Metric Boulevard
Austin, Texas 78758

[CONCRETE PARKING AND DRIVE MAP]

<PAGE>

EXHIBIT B

<PAGE>

[GAMETECH FLOOR PLAN]

<PAGE>

EXHIBIT C

<PAGE>

Exhibit 10.11
GAMETECH INTERNATIONAL, INC.

AMENDED
EMPLOYMENT
AGREEMENT

This AMENDED EMPLOYMENT AGREEMENT ("Agreement") is made and entered
into at Tempe, Arizona on this 1ST day of October, 1997 by and between
GameTech International Inc., a Delaware corporation ("GTI" or the "Company"),
and RICHARD T. FEDOR ("Executive").

Whereas:

a. The Company and Executive have entered into that previous Executive
Employment Agreement dated August 14, 1997 whereby Executive was
employed as the CHIEF EXECUTIVE OFFICER of the Company.

b. The Company and Executive desire to amend the Executive Employment
Agreement, and;

c. The Company and Executive wish pursuant to this Agreement to set forth
their full and complete understandings in respect to the
above-mentioned employment relationship, replacing any and all
previous understandings and agreements.

NOW, THEREFORE, in consideration of the provisions hereinafter
described, Company and Executive agree as follows:

1. DUTIES OF EXECUTIVE

During the term of this Agreement, Executive shall be employed by the
Company as its CHIEF EXECUTIVE OFFICER and in that capacity shall perform all
functions and duties consistent with such position on behalf of the Company
in an efficient, trustworthy and professional manner, as reasonably required
by the Board of Directors of the Company or the Board of Directors governing
any successor entity to the Company (the "Board").

Executive agrees to devote substantially all of his working time and
energy to the performance of his duties under this Agreement so long as his
employment under this Agreement is continued by the Company.

Notwithstanding the above, Executive shall be entitled to reasonable
absences for administrative meetings and to pursue other outside activities.
Executive also shall be permitted to serve as a member of the Board of
Directors of other organizations, subject to approval by the Board, on a case
by case basis. Such approval shall be granted if it can be reasonably
demonstrated that such service does not involve a competitor of the Company
or its Enterprises and does not materially interfere with effective
performance of Executive's duties under this Agreement.

1
<PAGE>

2. TERM OF AGREEMENT

Unless terminated sooner in accordance with the provisions of this
Agreement, the Company shall employ Executive and Executive accepts such
employment under the conditions set forth herein for a TWO (2) year term (the
"Term") beginning on the effective date of this Agreement and ending upon the
close of business on SEPTEMBER 30, 1999. Notwithstanding the foregoing, if
this Agreement is not terminated in accordance with the provisions herein on
or before the expiration of its initial Term, such Term shall continue, and
the Agreement shall continue in force for successive TWO (2) year periods
unless, at least NINETY (90) days prior to the expiration of the initial Term
of the Agreement, or NINETY (90) days prior to the expiration of any
subsequent TWO (2) year Term, either Executive or the Company gives the other
party written notice of its intent to terminate the Agreement at the end of
such Term.

3. DEFINITIONS

For purposes of this Agreement, the following terms shall have the
meanings set forth in this Paragraph 3:

a. "ANNUAL BASE SALARY" or "BASE SALARY" shall mean the annual base
salary rate in effect for Executive from time to time during the
Term of this Agreement in accordance with the provisions of
Paragraph 4.a. of this Agreement.

b. "ANNUAL BONUS" or "BONUS" shall mean a cash payment available
annually (or as otherwise provided for in this document) to
Executive in addition to Base Salary as determined in accordance
with Paragraph 4.b. of this Agreement.

c. "CAUSE" shall mean (i) Executive's conviction for any felony
involving moral turpitude; or (ii) any conduct by Executive which
is materially injurious to the Company or its Enterprises. (Such
cause for conduct shall exist if Executive is guilty of
dishonesty, gross neglect of duty hereunder, or other act or
omission which impairs Company's ability to conduct its ordinary
business in its usual manner.) Such cause will be determined upon
a meeting of the Company's Board of Directors.

d. "CHANGE OF CONTROL" shall mean any of the following events: (i) the
Company consolidates with, or merges with or into, another entity
or sells, assigns, conveys, transfers, leases or otherwise
disposes of all or substantially all of the Company's assets to
any entity, or any entity consolidates with, or merges with or
into, the Company and the Company is not the surviving
Corporation; (ii) the liquidation or dissolution of the Company;
(iii) during any consecutive two year period, individuals who at
the beginning of such period constituted the Board (together with
any new

2
<PAGE>

directors whose election by such Board or whose nomination for
election by the stockholders of the Company was approved by a
vote of the majority of the directors then still in office who
were either directors at the beginning of such period or whose
election or nomination was previously so approved) cease for any
reason to constitute a majority of the Board then in office, or
(iv) any person or group (as such terms are defined in Section
13(d) and 14(d) under the Securities Exchange Act of 1934 (the
"Exchange Act")) is or becomes the beneficial owner (as defined
in Rules 13(d)-3 and 13(d)-5 under the Exchange Act, except that
a person will be deemed to have beneficial ownership of all
securities that such person has the right to acquire, whether
such right is exercisable immediately or only after the passage
of time) directly or indirectly of more than 30% of the total
voting power entitled to vote in the election of the Board;
PROVIDED, however, that such person or group shall not include
any person or group that is the beneficial owner of more than 5%
of the total voting power as of the date of this Agreement.

e. "COMPENSATION COMMITTEE" means the Compensation Committee of the
Board of Directors.

f. "CONSTRUCTIVE TERMINATION" shall mean Executive's voluntary
Termination of Service within twelve (12) months following a
Change of Control or within ninety (90) days following the
occurrence of one or more of the following events, except if such
event is approved in writing by Executive prior to its occurrence:

(i) A failure by the Company to abide by any part of this Agreement
that is not remedied within thirty (30) business days after
receiving written notification by Executive of such failure;

(ii) A material reduction in Executive's title or responsibilities.

(iii) Relocation of Executive's primary place of work to an area
other than the location of the Company's principal executive
offices.

g. "DISABILITY" shall be deemed to have occurred if Executive makes
application for or is otherwise eligible for disability benefits
under any Company-sponsored long-term disability program covering
Executive, and Executive qualifies for such benefits. In the
absence of a Company-sponsored long-term disability program
covering Executive, Executive shall be presumed to be totally and
permanently disabled if so determined by the Company's Board
following the Board's review of two independent medical opinions
satisfactory to the Board certifying that Executive will be
permanently

<PAGE>

unable to perform his normal duties as a result of a physical or mental
condition

h. "ENTERPRISE" shall mean any joint venture, business pursuant to a joint
operating agreement, or other alliance or affiliated business of the
Company, including but not limited to The Satellite Bingo Network, LLC.

i. "EXECUTIVE'S SPOUSE" shall mean Executive's spouse upon the execution of
this Agreement, except as otherwise designated herein. (All spousal
pension benefits under this Agreement shall be non-transferable should
Executive remarry.)

j. "FISCAL YEAR" shall mean the twelve-month period beginning November 1,
unless the Company, with the approval of the Internal Revenue Service,
shall establish a different fiscal year.

l. "SERVICE" shall mean Executive's full-time or substantially full-time
employment with the Company, or any affiliated organization, including
any leave of absence approved by the Board.

m. "TERMINATION OF SERVICE" shall mean Executive's termination of Service
for any reason whatsoever, including death.

4. EXECUTIVE'S RIGHTS WHILE EMPLOYED BY THE COMPANY

a. BASE SALARY

Beginning on the effective date of this Agreement during the Term, the
minimum Annual Base Salary payable to Executive shall be TWO-HUNDRED
THOUSAND, FIVE-HUNDRED DOLLARS ($200,500.00). Such Base Salary shall
be paid in equal bi-monthly installments on the Company's normal
payroll dates. Executive's Base Salary shall be reviewed annually by
the Compensation Committee if any, otherwise by the Board, and may be
increased but not decreased from time to time based on prevailing
market conditions, performance of the Executive and other
considerations.

b. ANNUAL BONUS

All fiscal year bonus amounts will be determined by and awarded in the
sole discretion of the Compensation Committee if any, otherwise

4
<PAGE>

by the Board commensurate with Executive's performance and the overall
performance of the Company, or pursuant to a plan which may be adopted
by the Company making payment of bonuses contingent upon achievement
of goals and objectives set by the Board for the fiscal period.

c. LONG-TERM INCENTIVES

Executive shall participate in any Long-Term Incentive Plan that may
be designed specifically for Executive or provided to other executives
of the Company during the Term. (Grants to Executive under such
Long-Term Incentive Plan shall be no less favorable to Executive in
amount and other key design features, including vesting restrictions,
with any other plans provided to any other executive at the Company.)

d. FRINGE BENEFITS AND OTHER

The Company shall provide Executive with the following:

(i) Such benefits and perquisites, including but not limited to
disability income, deferred compensation or any form of savings
or retirement plan, and an automobile allowance as may from time
to time be provided to other executives of the Company. Such
benefits and perquisites shall exclude fees paid for Board or
Board Committee service, which are hereby included in
Executive's Base Salary. Benefits and perquisites shall be
provided at the same proportional cost to Executive as that paid
by other executives of the Company who participate in such
programs;

(ii) Reasonable vacation/sick leave each year during the Term not less
than THIRTY (30) days. Executive is allowed to accrue a maximum
of SIXTY (60) full days of unused vacation/sick leave time. Said
vacation/sick leave shall not reduce Executive's compensation
under this Agreement;

(iii) Payment of premiums on professional liability insurance for
Executive;

(iv) Payment of dues for such professional societies and associations of
which Executive is a member that benefit the Company;

(v) Nothing in this Agreement shall be construed as limiting or
restricting any benefit to Executive under any pension,
profit-sharing or similar retirement plan, or under any group
life or group health or accident or other plan of the Company,
for the benefit of its employees generally or a group of them,
now or hereafter in existence.

<PAGE>

(vi) It shall be at the Board's discretion to grant any other fringe
benefits to Executive.

5. EXECUTIVE'S RIGHTS UPON TERMINATION OF SERVICE

a. FOR REASON OF VOLUNTARY RESIGNATION CONSTITUTING CONSTRUCTIVE TERMINATION
OR TERMINATION BY THE COMPANY WITHOUT CAUSE

In the event of Executive's Termination of Service for reason of (i)
voluntary resignation by Executive constituting Constructive
Termination, (ii) Executive's Termination of Service by the Company
without Cause or (iii) Executive's Termination of Service for any
reason except those specifically described in paragraphs 5.b through
5.f herein, Executive (or if Executive dies while benefits remain
under this Agreement, Executive's beneficiaries as designated in
accordance with the provisions of Paragraph 9 herein) shall be
entitled to receive the following upon such Termination of Service:

(i) Payment immediately upon Executive's Termination of Service of any
previously unpaid Base Salary and any Bonus granted and
previously unpaid or the pro-rata portion of any Bonus earned by
Executive pursuant to any plan (if necessary, the Company may
pay such Bonus when all bonuses for that Fiscal Year are
calculated and paid) through the date of Executive's Termination
of Service;

(ii) Immediate vesting of any stock options or other rights previously
provided to Executive under any Company Long-Term Incentive Plan;
and

(iii) Payment of a lump sum amount equal to TWO (2) years of Executive's
Base Salary.

In the event of a Change of Control, Executive shall be also be
entitled to the protections outlined in Paragraph 7 herein.

b. FOR REASON OF EXPIRATION OF THE TERM OF THIS AGREEMENT

In the event of Executive's Termination of Service for reason of
expiration of the Term of this Agreement pursuant to Paragraph 2
thereof, Executive (or if Executive dies while benefits remain due
under this Agreement, Executive's beneficiaries as designated in
accordance with the provisions of Paragraph 9 thereof) shall be
entitled to receive the following upon such Termination of Service:

(i) Payment immediately upon Executive's Termination of Service of any
previously unpaid Base Salary and any Bonus granted and previously

6
<PAGE>

unpaid or the pro-rata portion of any Bonus earned by
Executive pursuant to any plan (if necessary, the Company
may pay such Bonus when all bonuses for that Fiscal Year
are calculated and paid) through the date of Executive's
Termination of Service;

(ii) Immediate vesting of any stock options or other rights
previously provided to Executive under any Company
Long-Term Incentive Plan;

(iii) Payment of any Disability or other benefits provided to
Executive by the Company in accordance with the terms and
conditions of such benefits and this Agreement.

(iv) Payment of a lump sum amount equal to ONE(1) year of
Executive's Annual Base Salary.

c. FOR REASON OF DISABILITY

In the Event of Executive's Termination of Service for reason of
Disability, Executive (or if Executive dies while benefits remain
due under this Agreement, Executive's beneficiaries as designated
in accordance with the provisions of Paragraph 9 hereof) shall be
entitled to receive the following upon such Termination of Service:

(i) Payment immediately upon Executive's Termination of
Service of and previously unpaid Base Salary and any Bonus
granted and previously unpaid or the pro-rata portion of
any Bonus earned by Executive pursuant to any plan (if
necessary, the Company may pay such Bonus when all bonuses
for that Fiscal Year are calculated and paid) through the
date of Executive's Termination of Service;

(ii) Immediate vesting of any stock options or other rights
previously provided to Executive under any Company
Long-Term Incentive Plan;

(iii) Payment of any disability or other benefits provided to
Executive by the Company in accordance with the terms and
conditions of such benefits and this Agreement;

(iv) Payment of a lump sum amount equal to the remaining Term
of Executive's Base Salary.

d. FOR REASON OF DEATH

In the Event of Executive's Termination of Service for Reason of
Death,
7
<PAGE>

Executive's beneficiaries as designated in accordance with the
provisions of Paragraph 9 hereof shall be entitled to receive the
following upon such Termination of Service:

(i) Payment immediately upon Executive's Termination of
service of any previously unpaid Base Salary and any Bonus
granted and previously unpaid or the pro-rata portion of
any Bonus earned by Executive pursuant to any plan (if
necessary, the Company may pay such Bonus when all bonuses
for that Fiscal Year are calculated and paid) through the
date of Executive's Termination of Service;

(ii) Immediate vesting of any stock options or other rights
previously provided to Executive under any Company
Long-Term Incentive Plan;

(iii) Payment of any other benefits provided by the Company in
accordance with the terms and conditions of such benefits
and this Agreement.

(iv) Payment of a lump sum amount equal to the remaining Term
of Executive's Base Salary. (Payment to be made to
Executive's Estate.)

e. FOR REASON OF VOLUNTARY RESIGNATION NOT CONSTITUTING CONSTRUCTIVE
TERMINATION

In the event of Executive's Termination of Service for reason of
voluntary resignation by Executive not constituting Constructive
Termination, Executive shall be entitled to receive the following
upon such Termination of Service:

(i) Payment immediately upon Executive's Termination of
Service of any previously unpaid Base Salary and any Bonus
granted and previously unpaid or the pro-rata portion of
any Bonus earned by Executive pursuant to any plan (if
necessary, the Company may pay such Bonus when all bonuses
for that Fiscal Year are calculated and paid) through the
date of Executive's Termination of Service:

(ii) Performance of Company obligations with respect to
Executive's exercise of any stock options or other rights
previously granted to Executive under any Company
Long-Term Incentive Plan provided such options or other
rights have vested as of the date of the termination of
Executive's service in accordance with any agreement
between the Company and Executive covering such options or
other rights;

8
<PAGE>

(iii) Payment of any Disability or other benefits provided to
Executive by the Company in accordance with the terms and
conditions of such benefits and this Agreement.

f. FOR REASON OF CAUSE

In the Event of Executive's Termination of Service for reason of
Cause, the Company's obligations to Executive shall be limited to:

(i) Payment immediately upon Executive's Termination of
Service of any previously unpaid Base Salary;

(ii) Performance of Company obligations with respect to
Executive's exercise of any stock options or other rights
previously granted to Executive under any Company
Long-Term Incentive Plan provided such options or other
rights have vested as of the date of the termination of
executive's service in accordance with any agreement
between the Company and Executive covering such options or
other rights.

6. MITIGATION AND OFFSET REQUIREMENTS

Executive shall not be required to mitigate the amount of any
benefit provided for in this Agreement by actively seeking
alternative employment during the period in which such benefits are
paid. In addition, except as provided for in Paragraph 8 hereof,
Executive shall not be required to offset any such benefits
provided for in this Agreement by amounts earned as a result of
Executive's employment or self-employment during the period in
which Executive is entitled to receive such benefits.

7. ADDITIONAL RIGHTS UPON A CHANGE OF CONTROL

In addition to Executive's rights to effect a Constructive
Termination of Service within TWELVE(12) months upon a Change of
Control, the Term of this Agreement shall be automatically extended
through the close of business TWENTY-FOUR(24) months following the
effective date of any Change of Control.

8. BREACH OF CONFIDENTIALITY OR ENTERING INTO A DIRECT COMPETITION

a. DURING THE AGREEMENT PERIOD

During the period in which this Agreement remains in force and
while Executive is entitled to receive any benefits under this
Agreement, Executive shall not, without prior written consent of
the Board or pursuant to and consistent with the order of any
court, legislative body or regulatory agency, (a) engage directly
or indirectly (including by way of example only, as a principal,
partner, venturer, employee or agent) nor have any direct or
indirect interest, in any business which competes with

9
<PAGE>

the Company or its Enterprises in any material way, (b) disclose to any
third party, either directly or indirectly, any non-public information
regarding the Company's or its Enterprises' business, customers,
financial condition, strategies or operations the disclosure of which
could possibly harm the Company or its Enterprises in any material way.
Clause (a) above shall not apply to any investment by Executive in the
stock of a publicly-traded corporation, provided such investment
constitutes less than five percent (5%) of such corporation's voting
shares.

In the event that, Executive violates clauses (a) or (b) above,
Executive's rights to any benefits under this Agreement shall
immediately terminate.

b. UPON TERMINATION OF AGREEMENT

It is understood and agreed that the nature of the methods employed in
Company's business are such that Executive will be placed in a close
business and personal relationship with the customers of Company. Thus,
for a period of TWO (2) years immediately following the termination of
Executive's employment (or retirement by Executive), for any reason
whatsoever, so long as Company continues to carry on the same or similar
business, said Executive shall not, for any reason whatsoever, directly
or indirectly, for him or on behalf of, or in conjunction with, any
other person, persons, company, partnership, corporation or business
entity:

(i) call upon, divert, influence or solicit or attempt to call upon,
divert, influence or solicit any customer or customers of Company;

(ii) divulge the names and addresses or any information concerning any
customer of Company;

(iii) own, manage, operate, control, be employed by, participate in or be
connected in any manner with the ownership, management, operation or
control of the same, similar, or related line of business as that
carried on by Company within a radius of TWENTY-FIVE (25) miles from
any then existing or proposed office of Company; and

(iv) make any public statement or announcement, or permit anyone else to
make any public statement or announcement that Executive was formerly
employed by or connected with Company.

The covenants set forth herein shall not include any period(s) of violation
of any covenant or any period(s) of time required for litigation to enforce
any covenant. If the provisions set forth are determined to be too broad to
be enforceable at law, then the area and/or length of time shall be reduced
to such area and time and that shall be enforceable.

<PAGE>

9. DESIGNATION OF BENEFICIARIES

Executive shall have the right at any time to designate any person(s) or
trust(s) as beneficiaries to whom any benefits payable under this Agreement
shall be made in the event of Executive's death prior to the distribution of
all benefits due Executive under this Agreement. Each beneficiary designation
shall be effective only when filed in writing with the Company during
Executive's lifetime. If Executive designates more than one beneficiary,
distributions of cash payments shall be made in equal proportions to each
beneficiary unless otherwise provided for in Executive's beneficiary
designation.

The filing of a new beneficiary designation shall cancel all
designations previously filed. Any finalized marriage or divorce (other than
common law marriage) of Executive subsequent to the date of filing a
beneficiary designation shall revoke such designation unless (a) in the case
of divorce, the previous spouse was not designated as beneficiary, and (b) in
the case of marriage, Executive's new spouse had previously been designated
as beneficiary. Executive's Spouse shall join in any designation of a
beneficiary other than Executive's Spouse.

If Executive fails to designate a beneficiary as provided for above, or
if the beneficiary designation is revoked by marriage, divorce or otherwise
without execution of a new designation, or if the beneficiary designated by
Executive dies prior to distribution of the benefits due Executive under this
Agreement, the Board of Directors of the Company shall direct the
distribution of any benefits due under this Agreement to Executive's estate.

10. SUCCESSORS

Except as provided for in Paragraph 9 above, the rights and duties of a
party hereunder shall not be assignable by that party PROVIDED, HOWEVER, that
this Agreement shall be binding upon and shall inure to the benefit of any
successor of the Company, and any such successor shall be deemed substituted
for the Company under the terms of this Agreement. The term successor as used
herein shall include any person, firm, corporation or other business entity
which at any time, by merger, purchase or otherwise, acquires substantially
all of the assets or business of the Company.

11. ATTORNEYS' FEES

a. SUBSEQUENT TO ANY CHANGE OF CONTROL

Subsequent to any Change of Control, in any action at law or in equity
brought by either party hereto to enforce any of the provisions or rights
under this Agreement, the Company, in addition to bearing its own expenses,
shall pay to Executive all costs, expenses and reasonable attorneys' fees
incurred therein by Executive (including without limitation such costs,
expenses and fees on any appeals), and if Executive shall recover judgment
in any such action or proceeding, such costs, expenses and attorneys' fees
shall be included as part of such judgment.

b. PRIOR TO ANY CHANGE OF CONTROL

Prior to any Change of Control, in any action at law or in equity to
enforce any of the

<PAGE>

provisions or rights under this Agreement, the unsuccessful party to
such litigation, as determined by the Court in a final judgment or decree,
shall pay the successful party or parties all costs, expenses and
reasonable attorneys' fees incurred therein by such party or parties
(including without limitation such costs, expenses and fees on any
appeals), and if such successful party or parties shall recover judgment
in such action or proceeding, such costs, expenses and attorneys' fees
shall be included as part of such judgment.

Notwithstanding the foregoing provisions, in no event prior to a Change
of Control shall the successful party or parties be entitled to recover an
amount from the unsuccessful party or parties for costs, expenses and
attorneys' fees that exceeds the costs, expenses and attorneys' fees incurred
by the unsuccessful party in connection with the action or proceeding.

12. ARBITRATION

Company and Executive agree with each other that any claim of Executive
arising out of or relating to this Agreement or the breach of this Agreement
or Executive's employment by Company, including, without limitation, any
claim for compensation due, wrongful termination and any claim alleging
discrimination or harassment in any form shall be resolved by binding
arbitration, except for claims in which injunctive relief is sought and
obtained. The arbitration shall be administered by the American Arbitration
Association under its Commercial Arbitration Rules at the American Arbitration
Association Office nearest Executive's place of employment. The award entered
by the arbitrator shall be final and binding in all respects and judgment
thereon may be entered in any Court having jurisdiction.

13. ENTIRE AGREEMENT

With respect to the matters specified herein, this Agreement contains
the entire agreement between the Company and Executive and supersedes all
prior written agreements, understandings and commitments between the Company
and Executive. No amendments to this Agreement may be made except through a
written document signed by the Executive and approved in writing by the
Company's Board.

14. VALIDITY

In the event that any provision of this Agreement is held to be invalid,
void or unenforceable, the same shall not affect, in any respect whatsoever,
the validity of any other provision of this Agreement.

15. PARAGRAPHS AND OTHER HEADINGS

Paragraphs and other headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretations of this Agreement.

16. NOTICE

Any notice or demand required or permitted to be given under this
Agreement shall be made in writing and shall be deemed effective upon the
personal delivery thereof if delivered or, if

<PAGE>

mailed, FORTY-EIGHT (48) hours after having been deposited in the United
States mail, postage prepaid, and addressed, in the case of the Company, to
the attention of the Board of Directors at the Company's then principal place
of business, presently 2209 West 1st Street, Tempe, Arizona 85281 and, in the
case of Executive, to 55 PEBBLE DRIVE, SOUTHINGTON, CONNECTICUT 06489. Either
party may change the address to which such notices are to be addressed to it
by giving the other party notice in the manner herein set forth.

17. RIGHT OF EMPLOYMENT

Nothing stated or implied by this Agreement shall prevent the Company
from terminating the Service of Executive at any time nor prevent Executive
from voluntarily terminating Service at any time.

18. WITHHOLDING TAXES AND OTHER DEDUCTIONS

To the extent required by law, the Company shall withhold from any
payments due Executive under this Agreement any applicable federal, state or
local taxes and such other deductions as are prescribed by law or Company
policy.

19. APPLICABLE LAW

To the full extent controllable by stipulation of the Company and
Executive, this Amendment shall be interpreted and enforced under Arizona law.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
by its duly authorized representative(s) and Executive has affixed his
signature as of the date first written above.

EXECUTIVE COMPANY

/s/ Richard T. Fedor GAMETECH INTERNATIONAL, INC.
- -------------------------
RICHARD T. FEDOR
BY: /s/ Richard T. Fedor
-----------------------------------
CHAIRMAN, AND CEO

BY: /s/ Gary R. Held
-----------------------------------
GARY R. HELD (BOARD MEMBER)

BY: /s/ Clarence H. Thiesen
-----------------------------------
CLARENCE H. THIESEN (BOARD MEMBER)

<PAGE>

Exhibit 10.12

GAMETECH INTERNATIONAL, INC.

AMENDED
EMPLOYMENT
AGREEMENT

This AMENDED EMPLOYMENT AGREEMENT ("Agreement") is made and entered into
at Tempe, Arizona on this 1st day of September, 1997 by and between GameTech
International Inc., a Delaware corporation ("GTI" or the "Company"), and
CLARENCE H. THIESEN ("Executive").

Whereas:

a. The Company and Executive have entered into that previous Executive
Employment Agreement dated August 14, 1997 whereby Executive was
employed as the CHIEF FINANCIAL OFFICER of the Company.

b. The Company and Executive desire to amend the Executive Employment
Agreement, and;

c. The Company and Executive wish pursuant to this Agreement to set
forth their full and complete understandings in respect to the
above-mentioned relationship, replacing any and all previous
understandings and agreements.

NOW, THEREFORE, in consideration of the provisions hereinafter
described, Company and Executive agree as follows:

1. DUTIES OF EXECUTIVE

During the term of this Agreement, Executive shall be employed by the
Company as its VICE PRESIDENT - FINANCE and in that capacity shall perform all
functions and duties consistent with such position on behalf of the Company in
an efficient, trustworthy and professional manner, as reasonably required by
the Board of Directors of the Company or the Board of Directors governing any
successor entity to the Company (the "Board").

Notwithstanding the above, Executive shall be entitled to reasonable
absences for administrative meetings and to pursue other outside activities.
Executive also shall be permitted to serve as a member of the Board of
Directors of other organizations, subject to approval by the Board, on a case
by case basis. Such approval shall be granted if it can be reasonably
demonstrated that such service does not involve a competitor of the Company or
its Enterprises and does not materially interfere with effective performance of
Executive's duties under this Agreement.

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<PAGE>

2. TERM OF AGREEMENT

Unless terminated sooner in accordance with the provisions of this
Agreement, the Company shall employ Executive and Executive accepts such
employment under the conditions set forth herein for a ONE (1) year term (the
"Term") beginning on the effective date of this Agreement and ending upon the
close of business on AUGUST 31, 1998. Notwithstanding the foregoing, if this
Agreement is not terminated in accordance with the provisions herein on or
before the expiration of its initial Term, such Term shall continue, and the
Agreement shall continue in force for successive ONE (1) year periods unless,
at least NINETY (90) days prior to the expiration of the initial Term of the
Agreement, or NINETY (90) days prior to the expiration of any subsequent
ONE (1) year Term, either Executive or the Company gives the other party written
notice of its intent to terminate the Agreement at the end of such Term.

3. DEFINITIONS

For purposes of this Agreement, the following terms shall have the
meanings set forth in this Paragraph 3:

c. "CAUSE" shall mean (i) Executive's conviction for any felony
involving moral turpitude; or (ii) any conduct by Executive which
is materially injurious to the Company or its Enterprises. (Such
cause for conduct shall exist if Executive is guilty of dishonesty,
gross neglect of duty hereunder, or other act or omission which
impairs Company's ability to conduct its ordinary business in its
usual manner.) Such cause will be determined upon a meeting of the
Company's Board of Directors.

d. "CHANGE OF CONTROL" shall mean any of the following events: (i) the
Company consolidates with, or merges with or into, another entity
or sells, assigns, conveys, transfers, leases or otherwise disposes
of all or substantially all of the Company's assets to any entity,
or any entity consolidates with, or merges with or into, the Company
and the Company is not the surviving Corporation; (ii) the
liquidation or dissolution of the Company; (iii) during any
consecutive two year period, individuals who at the beginning of
such period constituted the Board (together with any new directors
whose election by such Board or whose nomination for election by

2
<PAGE>

the stockholders of the Company was approved by a vote of the
majority of the directors then still in office who were either
directors at the beginning of such period or whose election or
nomination was previously so approved) cease for any reason to
constitute a majority of the Board then in office; or (iv) any
person or group (as such terms are defined in Section 13(d) and
14(d) under the Securities Exchange Act of 1934 (the "Exchange
Act")) is or becomes the beneficial owner (as defined in Rules
13(d)-3 and 13(d)-5 under the Exchange Act, except that a person
will be deemed to have beneficial ownership of all securities that
such person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time) directly
or indirectly of more than 30% of the total voting power entitled
to vote in the election of the Board; PROVIDED, however, that such
person or group shall not include any person or group that is the
beneficial owner of more than 5% of the total voting power as of
the date of this Agreement.

e. "COMPENSATION COMMITTEE" means the Compensation Committee of the
Board of Directors.

f. "CONSTRUCTIVE TERMINATION" shall mean Executive's voluntary
Termination of Service within twelve (12) months following a Change
of Control or within ninety (90) days following the occurrence of
one or more of the following events, except if such event is
approved in writing by Executive prior to its occurrence:

(i) A failure by the Company to abide by any part of this
Agreement that is not remedied within thirty (30) business
days after receiving written notification by Executive of such
failure;

(ii) A material reduction in Executive's title or responsibilities.

(iii) Relocation of Executive's primary place of work to an area
other than the location of the Company's principal executive
offices.

g. "DISABILITY" shall be deemed to have occurred if Executive makes
application for or is otherwise eligible for disability benefits
under any Company-sponsored long-term disability program covering
Executive, and Executive qualifies for such benefits. In the
absence of a Company-sponsored long-term disability program covering
Executive, Executive shall be presumed to be totally and
permanently disabled if so determined by the Company's Board
following the Board's review of two independent medical opinions
satisfactory to the Board certifying that Executive will be
permanently unable to perform his normal duties as a result of a
physical or mental

3
<PAGE>

condition.

h. "ENTERPRISE" shall mean any joint venture, business pursuant to a
joint operating agreement, or other alliance or affiliated business
of the Company, including but not limited to The Satellite Bingo
Network, LLC.

i. "EXECUTIVE'S SPOUSE" shall mean Executive's spouse upon the
execution of this Agreement, except as otherwise designated herein.
(All spousal pension benefits under this Agreement shall be
non-transferable should Executive remarry.)

j. "FISCAL YEAR" shall mean the twelve-month period beginning
November 1, unless the Company, with the approval of the Internal
Revenue Service, shall establish a different fiscal year.

k. "LONG-TERM INCENTIVE PLAN" shall mean any stock option plan or any
other form of equity (real or phantom) or other long-term incentive
plan introduced by the Company.

l. "SERVICE" shall mean Executive's full-time or substantially
full-time employment with the Company, or any affiliated
organization, including any leave of absence approved by the Board.

m. "TERMINATION OF SERVICE" shall mean Executive's termination of
Service for any reason whatsoever, including death.

4. EXECUTIVE'S RIGHTS WHILE EMPLOYED BY THE COMPANY

a. BASE SALARY

Beginning on the effective date of this Agreement during the Term,
the minimum Annual Base Salary payable to Executive shall be
ONE-HUNDRED AND THIRTY THOUSAND DOLLARS ($130,000.00). Such Base
Salary shall be paid in equal bi-monthly installments on the
Company's normal payroll dates. Executive's Base Salary shall be
reviewed annually by the Compensation Committee if any, otherwise by
the Board, and may be increased but not decreased from time to time
based on prevailing market conditions, performance of the Executive
and other considerations.

b. ANNUAL BONUS

All fiscal year bonus amounts will be determined by and awarded in
the sole discretion of the Compensation Committee if any, otherwise
by the Board commensurate with Executive's performance and the

<PAGE>

overall performance of the Company, or pursuant to a plan which may
be adopted by the Company making payment of bonuses contingent upon
achievement of goals and objectives set by the Board for the fiscal
period.

c. LONG-TERM INCENTIVES

Executive shall participate in any Long-Term Incentive Plan that
may be designed specifically for Executive or provided to other
executives of the Company during the Term. (Grants to Executive
under such Long-Term Incentive Plan shall be no less favorable to
Executive in amount and other key design features, including
vesting restrictions, with any other plans provided to any other
executive at the Company.)

d. FRINGE BENEFITS AND OTHER

The Company shall provide Executive with the following:

(i) Such benefits and perquisites, including but not limited to
disability income, deferred compensation or any form of
savings or retirement plan, and an automobile allowance as
may from time to time be provided to other executives of the
Company. Such benefits and perquisites shall exclude fees paid
for Board or Board Committee service, which are hereby
included in Executive's Base Salary. Benefits and perquisites
shall be provided at the same proportional cost to Executive
as that paid by other executives of the Company who
participate in such programs;

(ii) Reasonable vacation each year during the Term not less than
THIRTY (30) days. Executive is allowed to accrue a maximum of
SIXTY (60) full days of unused vacation/sick leave time. Said
vacation shall not reduce Executive's compensation under this
Agreement;

(iii) Payment of premiums on professional liability insurance for
Executive;

(iv) Payment of dues for such professional societies and
associations of which Executive is a member that benefit the
Company;

(v) Nothing in this Agreement shall be construed as limiting or
restricting any benefit to executive under any pension,
profit-sharing or similar retirement plan, or under any group
life or group health or accident or other plan of the Company,
for the benefit of its employees generally or a group of them,
now or hereafter in existence.

5
<PAGE>

(vi) It shall be at the Board's discretion to grant any other
fringe benefits to Executive.

5. EXECUTIVE'S RIGHTS UPON TERMINATION OF SERVICE

a. FOR REASON OF VOLUNTARY RESIGNATION CONSTITUTING CONSTRUCTIVE
TERMINATION OR TERMINATION BY THE COMPANY WITHOUT CAUSE

In the event of Executive's Termination of Service for reason of (i)
voluntary resignation by Executive constituting Constructive
Termination, (ii) Executive's Termination of Service by the Company
without Cause or (iii) Executive's Termination of Service for any
reason except those specifically described in paragraphs 5.b through
5.f herein, Executive (or if Executive dies while while benefits
remain due under this Agreement, Executive's beneficiaries as
designated in accordance with the provisions of Paragraph 9 herein)
shall be entitled to receive the following upon such Termination of
Service:

(i) Payment immediately upon Executive's Termination of Service of
any previously unpaid Base Salary and any Bonus granted and
previously unpaid or the pro-rata portion of any Bonus earned by
Executive pursuant to any plan (if necessary, the Company may pay
such Bonus when all bonuses for that Fiscal Year are calculated
and paid) through the date of Executive's Termination of Service;

(ii) Immediate vesting of any stock options or other rights
previously provided to Executive under any Company Long-Term
Incentive Plan; and

(iii) Payment of a lump sum amount equal to ONE (1) year of
Executive's Base Salary.

In the event of a Change of Control, Executive shall be also be
entitled to the protections outlined in Paragraph 7 herein.

b. FOR REASONS OF EXPIRATION OF THE TERM OF THIS AGREEMENT

<PAGE>

pursuant to any plan (if necessary, the Company may pay such Bonus
when all bonuses for that Fiscal Year are calculated and paid)
through the date of Executive's Termination of Service;

(ii) Immediate vesting of any stock options or other rights previously
provided to Executive under any Company Long-Term Incentive Plan;

(iii) Payment of any Disability or other benefits provided to
Executive by the Company in accordance with the terms and
conditions of such benefits and this Agreement.

(iv) Payment of a lump sum amount equal to ONE (1) year of
Executive's Annual Base Salary

c. FOR REASON OF DISABILITY

In the Event of Executive's Termination of Service for reason of
Disability, Executive (or if Executive dies while benefits remain
due under this Agreement, Executive's beneficiaries as designated in
accordance with the provisions of Paragraph 9 hereof) shall be
entitled to receive the following upon such Termination of Service:

(i) Payment immediately upon Executive's Termination of Service of
any previously unpaid Base Salary and any Bonus granted and
previously unpaid or the pro-rata portion of any Bonus earned by
Executive pursuant to any plan (if necessary, the Company may pay
such Bonus when all bonuses for that Fiscal Year are calculated
and paid) through the date of Executive's Termination of Service;

(ii) Immediate vesting of any stock options or other rights
previously provided to Executive under any Company Long-Term
Incentive Plan;

(iii) Payment of any Disability or other benefits provided to
Executive by the Company in accordance with the terms and
conditions of such benefits and this Agreement;

(iv) Payment of a lump sum amount equal to the remaining Term of
Executive's Base Salary.

d. FOR REASON OF DEATH

In the Event of Executive's Termination of Service for Reason of
Death, Executive's beneficiaries as designated in accordance with
the provisions of

7
<PAGE>

Paragraph 9 hereof shall be entitled to receive the following upon
such Termination of Service:

(i) Payment immediately upon Executive's Termination of Service of
any previously unpaid Base Salary and any Bonus granted and
previously unpaid or the pro-rata portion of any Bonus earned
by executive pursuant to any plan (if necessary, the Company
may pay such Bonus when all bonuses for that Fiscal Year are
calculated and paid) through the date of Executive's
Termination of Service;

(ii) Immediate vesting of any stock options or other rights
previously provided to Executive under any Company Long-Term
Incentive Plan;

(iii) Payment of any other benefits provided by the Company in
accordance with the terms and conditions of such benefits and
this Agreement.

(iv) Payment of a lump sum amount equal to the remaining Term of
executive's Base Salary. (Payment to be made to Executive's
Estate.)

e. FOR REASON OF VOLUNTARY RESIGNATION NOT CONSTITUTING CONSTRUCTIVE
TERMINATION

(i) Payment immediately upon Executive's Termination of Service of
any previously unpaid Base Salary and any Bonus granted and
previously unpaid or the pro-rata portion of any Bonus earned
by executive pursuant to any plan (if necessary, the Company
may pay such Bonus when all bonuses for that Fiscal Year are
calculated and paid) through the date of Executive's
Termination of Service;

(ii) Performance of Company obligations with respect to Executive's
exercise of any stock options or other rights previously
granted to Executive under any Company Long-Term Incentive Plan
provided such options or other rights have vested as of the
date of the termination of Executive's service in accordance
with any agreement between the Company and Executive covering
such options or other rights;

8
<PAGE>

(iii) Payment of any Disability or other benefits provided to
Executive by the Company in accordance with the terms and
conditions of such benefits and this Agreement.

f. FOR REASON OF CAUSE

In the Event of Executive's Termination of Service for reason of
Cause, the Company's obligations to Executive shall be limited to:

(i) Payment immediately upon Executive's Termination of Service of
any previously unpaid Base Salary;

(ii) Performance of Company obligations with respect to Executive's
exercise of any stock options or other rights previously
granted to Executive under any Company Long-Term Incentive Plan
provided such options or other rights have vested as of the
date of the termination of executive's service in accordance
with any agreement between the Company and Executive covering
such options or other rights.

6. MITIGATION AND OFFSET REQUIREMENTS

Executive shall not be required to mitigate the amount of any benefit
provided for in this Agreement by actively seeking alternative
employment during the period in which such benefits are paid. In
addition, except as provided for in Paragraph 8 hereof, Executive shall
not be required to offset any such benefits provided for in this
Agreement by amounts earned as a result of Executive's employment or
self-employment during the period in which Executive is entitled to
receive such benefits.

7. ADDITIONAL RIGHTS UPON A CHANGE OF CONTROL

In addition to executive's rights to effect a Constructive Termination
of Service within TWELVE (12) months upon a Change of Control, the Term
of this Agreement shall be automatically extended through the close of
business TWELVE (12) months following the effective date of any Change
of Control.

8. BREACH OF CONFIDENTIALITY OR ENTERING INTO A DIRECT COMPETITION

a. DURING THE AGREEMENT PERIOD

During the agreement period in which this Agreement remains in force
and while Executive is entitled to receive any benefits under this
Agreement, Executive shall not, without prior written consent of the
Board or pursuant to and consistent with the order of any court,
legislative body or regulatory agency, (a) engage directly or
indirectly (including by way of example only, as a principal, partner,
venturer, employee or agent) nor have any direct or indirect interest,
in any business which competes with

<PAGE>

the Company or its Enterprises in any material way, (b) disclose to
any third party, either directly or indirectly, any non-public
information regarding the Company's or its Enterprises' business,
customers, financial condition, strategies or operations the
disclosure of which could possibly harm the Company or its Enterprises
in any material way. Clause (a) above shall not apply to any
investment by Executive in the stock of a publicly-traded corporation,
provided such investment constitutes less than five percent (5%) of
such corporation's voting shares.

In the event that, Executive violates clauses (a) or (b) above,
Executive's rights to any benefits under this Agreement shall
immediately terminate.

b. UPON TERMINATION OF AGREEMENT

It is understood and agreed that the nature of the methods employed in
Company's business are such that Executive will be placed in a close
business and personal relationship with the customers of Company.
Thus, for a period of ONE (1) year immediately following the
termination of Executive's employment (or retirement by Executive),
for any reason whatsoever, so long as Company continues to carry on
the same or similar business, said Executive shall not, for any reason
whatsoever, directly or indirectly, for him or on behalf of, or in
conjunction with, any other person, persons, company, partnership,
corporation or business entity:

(i) call upon, divert, influence or solicit or attempt to call upon,
divert, influence or solicit any customer or customers of
Company;

(ii) divulge the names and addresses or any information concerning any
customer of Company;

(iii) own, manage, operate, control, be employed by, participate in or
be connected in any manner with the ownership, management,
operation or control of the same, similar, or related line of
business as that carried on by Company within a radius of
TWENTY-FIVE (25) miles from any then existing or proposed office
of Company; and

(iv) make any public statement or announcement, or permit anyone else
to make any public statement or announcement that Executive was
formerly employed by or connected with Company.

The covenants set forth herein shall not include any period(s) of violation
of any covenant or any period(s) of time required for litigation to enforce
any covenant. If the provisions set forth are determined to be too broad
to be enforceable at law, then the area and/or length of time shall be
reduced to such area and time and that shall be enforceable.

10
<PAGE>

9. DESIGNATION OF BENEFICIARIES

Executive shall have the right at any time to designate any person(s)
or trust(s) as beneficiaries to whom any benefits payable under this Agreement
shall be made in the event of Executive's death prior to the distribution of all
benefits due Executive under this Agreement. Each beneficiary designation shall
be effective only when filed in writing with the Company during Executive's
lifetime. If Executive designates more than one beneficiary, distributions of
cash payments shall be made in equal proportions to each beneficiary unless
otherwise provided for in Executive's beneficiary designation.

The filing of a new beneficiary designation shall cancel all
designations previously filed. Any finalized marriage or divorce (other than
common law marriage) of Executive subsequent to the date of filing a beneficiary
designation shall revoke such designation unless (a) in the case of divorce, the
previous spouse was not designated as beneficiary, and (b) in the case of
marriage, Executive's new spouse had previously been designated as beneficiary.
Executive's Spouse shall join in any designation of a beneficiary other than
Executive's Spouse.

If Executive fails to designate a beneficiary as provided for above,
or if the beneficiary designation is revoked by marriage, divorce or otherwise
without execution of a new designation, or if the beneficiary designated by
Executive dies prior to distribution of the benefits due Executive under this
Agreement, the Board of Directors of the Company shall direct the distribution
of any benefits due under this Agreement to Executive's estate.

10. SUCCESSORS

Except as provided for in Paragraph 9 above, the rights and duties of
a party hereunder shall not be assignable by that party PROVIDED, HOWEVER, that
this Agreement shall be binding upon and shall inure to the benefit of any
successor of the Company, and any such successor shall be deemed substituted for
the Company under the terms of this Agreement. The term successor as used
herein shall include any person, firm, corporation or other business entity
which at any time, by merger, purchase or otherwise, acquires substantially all
of the assets or business of the Company.

11. ATTORNEYS' FEES

a. SUBSEQUENT TO ANY CHANGE OF CONTROL

Subsequent to any Change of Control, in any action at law or in equity
brought by either party hereto to enforce any of the provisions or
rights under this Agreement, the Company, in addition to bearing its
own expenses, shall pay to Executive all costs, expenses and
reasonable attorneys' fees incurred therein by Executive (including
without limitation such costs, expenses and fees on any appeals), and
if Executive shall recover judgment in any such action or proceeding,
such costs, expenses and attorneys' fees shall be included as part of
such judgment.

b. PRIOR TO ANY CHANGE OF CONTROL

Prior to any Change of Control, in any action at law or in equity to
enforce any of the

11
<PAGE>

provisions or rights under this Agreement, the unsuccessful party to
such litigation, as determined by the Court in a final judgment or
decree, shall pay the successful party or parties all costs, expenses
and reasonable attorneys' fees incurred therein by such party or
parties (including without limitation such costs, expenses and fees on
any appeals), and if such successful party or parties shall recover
judgment in such action or proceeding, such costs, expenses and
attorneys' fees shall be included as part of such judgment.

Notwithstanding the foregoing provisions, in no event prior to a
Change of Control shall the successful party or parties be entitled to
recover an amount from the unsuccessful party or parties for costs, expenses
and attorneys' fees that exceeds the costs, expenses and attorneys' fees
incurred by the unsuccessful party in connection with the action or
proceeding.

12. ARBITRATION

Company and Executive agree with each other that any claim of
Executive arising out of or relating to this Agreement or the breach of this
Agreement or Executive's employment by Company, including, without
limitation, any claim for compensation due, wrongful termination and any
claim alleging discrimination or harassment in any form shall be resolved by
binding arbitration, except for claims in which injunctive relief is sought
and obtained. The arbitration shall be administered by the American
Arbitration Association under its Commercial Arbitration Rules at the
American Arbitration Association Office nearest Executive's place of
employment. The award entered by the arbitrator shall be final and binding
in all respects and judgment thereon may be entered in any Court having
jurisdiction.

13. ENTIRE AGREEMENT

With respect to the matters specified herein, this Agreement
contains the entire agreement between the Company and Executive and
supersedes all prior written agreements, understandings and commitments
between the Company and Executive. No amendments to this Agreement may be
made except through a written document signed by the Executive and approved
in writing by the Company's Board.

14. VALIDITY

In the event that any provision of this Agreement is held to be
invalid, void or unenforceable, the same shall not affect, in any respect
whatsoever, the validity of any other provision of this Agreement.

15. PARAGRAPHS AND OTHER HEADINGS

Paragraphs and other headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretations of this Agreement.

16. NOTICE

Any notice or demand required or permitted to be given under this
Agreement shall be made in writing and shall be deemed effective upon the
personal delivery thereof if delivered or, if

12
<PAGE>

mailed, forty-eight (48) hours after having been deposited in the United States
mail, postage prepaid, and addressed, in the case of the Company, to the
attention of the Board of Directors at the Company's then principal place of
business, presently 2209 West 1st Street, Tempe, Arizona 85281 and, in the case
of Executive, to P.O. Box #1990, Zephyr Cove, Nevada 89448. Either party may
change the address to which such notices are to be addressed to it by giving the
other party notice in the manner herein set forth.

17. RIGHT OF EMPLOYMENT

Nothing stated or implied by this Agreement shall prevent the
Company from terminating the Service of Executive at any time nor prevent
Executive from voluntarily terminating Service at any time.

18. WITHHOLDING TAXES AND OTHER DEDUCTIONS

19. APPLICABLE LAW

To the full extent controllable by stipulation of the Company and
Executive, this Amendment shall be interpreted and enforced under Arizona law.

IN WITNESS WHEROF, the Company has caused this Agreement to be
executed by its duly authorized representative(s) and Executive has affixed
his signature as of the date first written above.

EXECUTIVE COMPANY

/s/ Clarence H. Thiesen
- ----------------------- GAMETECH INTERNATIONAL, INC.
CLARENCE H. THIESEN
BY: /s/ Richard T. Fedor
------------------------
NAME: Richard T. Fedor
----------------------
TITLE: Chairman & CEO
---------------------

<PAGE>
EXHIBIT 10.13

GAMETECH INTERNATIONAL, INC.

AMENDED
EMPLOYMENT
AGREEMENT

This AMENDED EMPLOYMENT AGREEMENT ("Agreement") is made and entered into
at Tempe, Arizona on this 1st day of October, 1997 by and between GameTech
International Inc., a Delaware corporation ("GTI" or the "Company"), and Gary
R. Held ("Executive").

Whereas:

a. The Company and Executive have entered into that previous Executive
Employment Agreement dated August 14, 1997 whereby Executive was
employed as the Vice President - Sales and Marketing of the Company.

b. The Company and Executive desire to amend the Executive Employment
Agreement, and;

c. The Company and Executive wish pursuant to this Agreement to set
forth their full and complete understandings in respect to the
above-mentioned employment relationship, replacing any and all
previous understandings and agreements.

NOW, THEREFORE, in consideration of the provisions hereinafter
described, Company and Executive agree as follows:

1. DUTIES OF EXECUTIVE

During the term of this Agreement, Executive shall be employed by the
Company as its Vice President - Sales and Marketing and in that capacity
shall perform all functions and duties consistent with such position on
behalf of the Company in an efficient, trustworthy and professional manner,
as reasonably required by the Board of Directors of the Company or the Board
of Directors governing any successor entity to the Company (the "Board").

Notwithstanding the above, Executive shall be entitled to reasonable
absences for administrative meetings and to pursue other outside activities.
Executive also shall be permitted to serve as a member of the Board of
Directors of their organizations, subject to approval by the Board, on a
case by case basis. Such approval shall be granted if it can be reasonably
demonstrated that such service does not involve a competitor of the Company
or its Enterprises and does not materially interfere with effective
performance of Executive's duties under this Agreement.

<PAGE>

2. TERM OF AGREEMENT

Unless terminated sooner in accordance with the provisions of this
Agreement, the Company shall employ Executive and Executive accepts such
employment under the conditions set forth herein for a two (2) year term (the
"Term") beginning on the effective date of this Agreement and ending upon the
close of business on September 30, 1999. Notwithstanding the foregoing, if
this Agreement is not terminated in accordance with the provisions herein on
or before the expiration of its initial Term, such Term shall continue, and
the Agreement shall continue in force for successive two (2) year periods
unless, at least ninety (90) days prior to the expiration of the initial Term
of the Agreement, or ninety (90) days prior to the expiration of any
subsequent two (2) year Term, either Executive or the Company gives the other
party written notice of its intent to terminate the Agreement at the end of
such Term.

3. DEFINITIONS

For purposes of this Agreement, the following terms shall have the
meanings set forth in this Paragraph 3:

a. "ANNUAL BASE SALARY" or "BASE SALARY" shall mean the annual base
salary rate in effect for Executive from time to time during the Term
of this Agreement in accordance with the provisions of Paragraph 4.a.
of this Agreement.

b. "ANNUAL BONUS" or "BONUS" shall mean a cash payment available
annually (or otherwise provided for in this document) to Executive in
addition to Base Salary as determined in accordance with Paragraph 4.b.
of this Agreement.

c. "CAUSE" shall mean (i) Executive's conviction for any felony
involving moral turpitude; or (ii) any conduct by Executive which is
materially injurious to the Company or its Enterprises. (Such cause
for conduct shall exist if Executive is guilty of dishonesty, gross
neglect of duty hereunder, or other act or omission which impairs
Company's ability to conduct its ordinary business in its usual
manner.) Such cause will be determined upon a meeting of the
Company's Board of Directors.

d. "CHANGE OF CONTROL" shall mean any of the following events: (i) the
Company consolidates with, or merges with or into, another entity or
sells, assigns, conveys, transfers, leases or otherwise disposes of
all or substantially all of the Company's assets to any entity, or
any entity consolidates with, or merges with or into, the Company and
the Company is not the surviving Corporation; (ii) the liquidation or
dissolution of the Company; (iii) during any consecutive two year
period, individuals who at the beginning of such period constituted
the Board (together with any new

<PAGE>

directors whose election by such Board or whose nomination for
election by the stockholders of the Company was approved by a vote of
the majority of the directors then still in office who were either
directors at the beginning of such period or whose election or
nomination was previously so approved) cease for any reason to
constitute a majority of the Board then in office; or (iv) any person
or group (as such terms are defined in Section 13(d) and 14(d) under
the Securities Exchange Act of 1934 (the "Exchange Act")) is or
becomes the beneficial owner (as defined in Rules 13(d)-3 and 13(d)-5
under the Exchange Act, except that a person will be deemed to have
beneficial ownership of all securities that such person has the right
to acquire, whether such right is exercisable immediately or only
after the passage of time) directly or indirectly of more than 30% of
the total voting power entitled to vote in the election of the Board;
PROVIDED, however, that such person or group shall not include any
person or group that is the beneficial owner of more than 5% of the
total voting power as of the date of this Agreement.

e. "COMPENSATION COMMITTEE" means the Compensation Committee of the Board
of Directors.

f. "CONSTRUCTIVE TERMINATION" shall mean Executive's voluntary
Termination of Service within twelve (12) months following a Change
of Control or within ninety (90) days following the occurrence of one
or more of the following events, except if such event is approved in
writing by Executive prior to its occurrence:

(i) A failure by the Company to abide by any part of this Agreement
that is not remedied within thirty (30) business days after
receiving written notification by Executive of such failure;

(ii) A material reduction in Executive's title or responsibilities.

(iii) Relocation of Executive's primary place of work to an area
other than the location of the Company's principal executive
offices.

g. "DISABILITY" shall be deemed to have occurred if Executive makes
application for or is otherwise eligible for disability benefits under
any Company-sponsored long-term disability program covering Executive,
and Executive qualifies for such benefits. In the absence of a
Company-sponsored long-term disability program covering Executive,
Executive shall be presumed to be totally and permanently disabled if
so determined by the Company's Board following the Board's review of two
independent medical opinions satisfactory to the Board certifying that
Executive will be permanently

<PAGE>

unable to perform his normal duties as a result of a physical or
mental condition.

h. "ENTERPRISE" shall mean any joint venture, business pursuant to a
joint operating agreement, or other alliance or affiliated business of
the Company, including but not limited to The Satellite Bingo Network,
LLC.

i. "EXECUTIVE'S SPOUSE" shall mean Executive's spouse upon the execution
of this Agreement, except as otherwise designated herein. (All spousal
pension benefits under this Agreement shall be non-transferable
should Executive remarry.)

j. "FISCAL YEAR" shall mean the twelve-month period beginning November 1,
unless the Company, with the approval of the Internal Revenue Service,
shall establish a different fiscal year.

k. "LONG-TERM INCENTIVE PLAN" shall mean any stock option plan or any
other form of equity (real or phantom) or other long-term incentive
plan introduced by the Company.

l. "SERVICE" shall mean Executive's full-time or substantially full-time
employment with the Company, or any affiliated organization, including
any leave of absence approved by the Board.

m. "TERMINATION OF SERVICE" shall mean Executive's termination of Service
for any reason whatsoever, including death.

4. EXECUTIVE'S RIGHTS WHILE EMPLOYED BY THE COMPANY

a. BASE SALARY

Beginning on the effective date of this Agreement during the Term, the
minimum Annual Base Salary payable to Executive shall be ONE-HUNDRED
AND THIRTY-SIX THOUSAND DOLLARS ($136,000.00). Such Base Salary shall
be paid in equal bi-monthly installments on the Company's normal
payroll dates. Executive's Base Salary shall be reviewed annually by
the Compensation Committee if any, otherwise by the Board, and may be
increased but not decreased from time to time based on prevailing
market conditions, performance of the Executive and other
considerations.

b. ANNUAL BONUS

All fiscal year bonus amounts will be determined by and awarded in the
sole discretion of the Compensation Committee if any, otherwise

4
<PAGE>

by the Board commensurate with Executive's performance and the overall
performance of the Company; or pursuant to a plan which may be adopted
by the Company making payment of bonuses contingent upon achievement
of goals and objectives set by the Board for the fiscal period.

c. LONG-TERM INCENTIVES

Executive shall participate in any Long-Term Incentive Plan that may
be designed specifically for Executive or provided to other executives
of the Company during the Term. (Grants to Executive under such Long-
Term Incentive Plan shall be no less favorable to Executive in amount
and other key design features, including vesting restriction, with any
other plans provided to any other executive at the Company.)

d. FRINGE BENEFITS AND OTHER

The Company shall provide Executive with the following:

(i) Such benefits and perquisites, including but not limited to
disability income, deferred compensation or any form of
savings or retirement plan, and an automobile allowance as
may from time to time be provided to other executives of the
Company. Such benefits and perquisites shall exclude fees
paid for Board or Board Committee service, which are hereby
included in Executive's Base Salary. Benefits and
perquisites shall be provided at the same proportional cost
to Executive as that paid by other executives of the Company
who participate in such programs;

(ii) Reasonable vacation/sick leave each year during the Term not
less than THIRTY (30) days. Executive is allowed to accrue a
maximum of SIXTY (60) full days of unused vacation/sick
leave time. Said vacation/sick leave shall not reduce
Executive's compensation under this Agreement;

(iii) Payment of premiums on professional liability insurance for
Executive;

(iv) Payment of dues for such professional societies and
associations of which Executive is a member that benefit the
Company;

(v) Nothing in this Agreement shall be construed as limiting or
restricting any benefit to Executive under any pension,
profit-sharing or similar retirement plan, or under any
group life or group health or accident or other plan of the
Company, for the benefit of its employees generally or a
group of them, now or hereafter in existence.

5
<PAGE>

(vi) It shall be at the Board's discretion to grant any other
fringe benefits to Executive.

5. EXECUTIVE'S RIGHTS UPON TERMINATION OF SERVICE

a. FOR REASON OF VOLUNTARY RESIGNATION CONSTITUTING CONSTRUCTIVE
TERMINATION OR TERMINATION BY THE COMPANY WITHOUT CAUSE

In the event of Executive's Termination of Service for reason of (i)
voluntary resignation by Executive constituting Constructive
Termination, (ii) Executive's Termination of Service by the Company
without Cause or (iii) Executive's Termination or Service for any
reason except those specifically described in paragraphs 5.b through
5.f herein, Executive (or if Executive dies while benefits remain due
under this Agreement, Executive's beneficiaries as designated in
accordance with the provisions of Paragraph 9 herein) shall be
entitled to receive the following upon such Termination of Service:

(i) Payment immediately upon Executive's Termination of Service
of any previously unpaid Base Salary and any Bonus granted
and previously unpaid or the pro-rata portion of any Bonus
earned by Executive pursuant to any plan (if necessary, the
Company may pay such Bonus when all bonuses for that Fiscal
Year are calculated and paid) through the date of
Executive's Termination of Service;

(ii) Immediate vesting of any stock options or other rights
previously provided to Executive under any Company Long-Term
Incentive Plan; and

(iii) Pay of a lump sum amount equal to TWO (2) years of
Executive's Base Salary.

In the event of a Change of Control, Executive shall also be entitled
to the protections outlined in Paragraph 7 herein.

b. FOR REASON OF EXPIRATION OF THE TERM OF THIS AGREEMENT

(i) Payment immediately upon Executive's Termination of Service
of any previously unpaid Base Salary and any Bonus granted
and previously

<PAGE>

unpaid or the pro-rata portion of any Bonus earned by
Executive pursuant to any plan (if necessary, the Company may
pay such Bonus when all bonuses for that Fiscal Year are
calculated and paid through the date of Executive's
Termination of Service;

(ii) Immediate vesting of any stock options or other rights
previously provided to Executive under any Company Long-Term
Incentive Plan;

(iii) Payment of any Disability or other benefits provided to
Executive by the Company in accordance with the terms and
conditions of such benefits and this Agreement;

(iv) Payment of a lump sum amount equal to ONE(1) year of Executive's
Annual Base Salary;

c. FOR REASON OF DISABILITY

In the Event of Executive's Termination of Service for reason of
Disability, Executive (or if Executive dies while benefits remain due
under this Agreement, Executive's beneficiaries as designated in
accordance with the provisions of Paragraph 9 hereof) shall be
entitled to receive the following upon such Termination of Service:

(i) Payment immediately upon Executive's Termination of Service of
any previously unpaid Base Salary and any Bonus granted and
previously unpaid or the pro-rata portion of any Bonus earned
by Executive pursuant to any plan (if necessary, the Company
may pay such Bonus when all bonuses for that Fiscal Year are
calculated and paid) through the date of Executive's
Termination of Service;

(ii) Immediate vesting of any stock options or other rights
previously provided to Executive under any Company Long-Term
Incentive Plan;

(iii) Payment of any Disability or other benefits provided to
Executive by the Company in accordance with the terms and
conditions of such benefits and this Agreement;

(iv) Payment of a lump sum amount equal to the remaining Term of
Executive's Base Salary.

d. FOR REASON OF DEATH

In the Event of Executive's Termination of Service for Reason of
Death,

7
<PAGE>

Executive's beneficiaries as designated in accordance with the
provisions of Paragraph 9 hereof shall be entitled to receive the
following upon such Termination of Service:

(i) Payment immediately upon Executive's Termination of Service of
any previously unpaid Base Salary and any Bonus granted and
previously unpaid or the pro-rata portion of any Bonus earned by
Executive pursuant to any plan (if necessary, the Company may
pay such Bonus when all bonuses for that Fiscal Year are
calculated and paid) through the date of Executive's Termination
of Service;

(ii) Immediate vesting of any stock options or other rights
previously provided to Executive under any Company Long-Term
Incentive Plan;

(iii) Payment of any other benefits provided by the Company in
accordance with the terms and conditions of such benefits and
this Agreement.

(iv) Payment of a lump sum amount equal to the remaining Term
of Executive's Base Salary. (Payment to be made to Executive's
Estate.)

e. FOR REASON OF VOLUNTARY RESIGNATION NOT CONSTITUTING
CONSTRUCTIVE TERMINATION

In the Event of Executive's Termination of Service for reason
of voluntary resignation by Executive not constituting Constructive
Termination, Executive shall be entitled to receive the following upon
such Termination of Service:

(i) Payment immediately upon Executive's Termination of Service of
any previously unpaid Base Salary and any Bonus granted and
previously unpaid or the pro-rata portion of any Bonus earned by
Executive pursuant to any plan (if necessary, the Company may
pay such Bonus when all bonuses for that Fiscal Year are
calculated and paid) through the date of Executive's Termination
of Service.

(ii) Performance of Company obligations with respect to Executive's
exercise of any stock options or other rights previously granted
to Executive under any Company Long-Term Incentive Plan provided
such options or other rights have vested as of the date of the
termination of Executive's service in accordance with any
agreement between the Company and Executive covering such
options or other rights;

8
<PAGE>

(iii) Payment of any Disability or other benefits provided to
Executive by the Company in accordance with the terms and
conditions of such benefits and this Agreement.

f. FOR REASON OF CAUSE

In the Event of Executive's Termination of Service for reason
of Cause, the Company's obligations to Executive shall be limited to:

(i) Payment immediately upon Executive's Termination of
Service of any previously unpaid Base Salary;

(ii) Performance of Company obligations with respect to
Executive's exercise of any stock options or other rights
previously granted to Executive under any Company Long-Term
Incentive Plan provided such options or other rights have
vested as of the date of the termination of executive's
service in accordance with any agreement between the Company
and Executive covering such options or other rights.

6. MITIGATION AND OFFSET REQUIREMENTS

Executive shall not be required to mitigate the amount of any benefit
provided for in this Agreement by actively seeking alternative
employment during the period in which such benefits are paid. In
addition, except as provided for in Paragraph 8 hereof, Executive shall
not be required to offset any such benefits provided for in this
Agreement by amounts earned as a result of Executive's employment or
self-employment during the period in which Executive is entitled to
receive such benefits.

7. ADDITIONAL RIGHTS UPON A CHANGE OF CONTROL

In addition to Executive's rights to effect a Constructive Termination
of Service within TWELVE(12) months upon a Change of Control, the Term
of this Agreement shall be automatically extended through the close of
business TWENTY-FOUR(24) months following the effective date of any
Change of Control.

8. BREACH OF CONFIDENTIALITY OR ENTERING INTO A DIRECT COMPETITION

a. DURING THE AGREEMENT PERIOD

During the period in which this Agreement remains in force and
while Executive is entitled to receive any benefits under this
Agreement, Executive shall not, without prior written consent of
the Board or pursuant to and consistent with the order of any
court, legislative body or regulatory agency (a) engage directly or
indirectly (including by way of example only, as a principal,
partner, venturer, employee or agent) nor have any direct interest,
in any business which competes with

9
<PAGE>

the Company or its Enterprises in any material way, (b) disclose to any
third party, either directly or indirectly, any non-public information
regarding the Company's or its Enterprises' business, customers,
financial condition, strategies or operations the disclosure of which
could possibly harm the company or it Enterprises in any material way.
Clause (a) above shall not apply to any investment by Executive in the
stock of a publicly-traded corporation, provided such investment
constitutes less than five percent (5%) of such corporation's voting
shares.

In the event that, Executive violates clauses (a) or (b) above,
Executive's rights to any benefits under this Agreement shall immediately
terminate.

b. UPON TERMINATION OF AGREEMENT

It is understood and agreed that the nature of the methods employed in
Company's business are such that Executive will be placed in a close
business and personal relationship with the customers of Company. Thus,
for a period of TWO (2) years immediately following the termination of
Executive's employment (or retirement by Executive), for any reason
whatsoever, so long as Company continues to carry on the same or similar
business, said Executive shall not, for any reason whatsoever, directly
or indirectly, for him or on behalf of, or in conjunction with, any other
person, persons, company, partnership, corporation or business entity:

(i) call upon, divert, influence or solicit or attempt to call upon,
divert, influence or solicit any customer or customers of Company;

(ii) divulge the names and addresses or any information concerning any
customer of Company;

(iv) make any public statement or announcement, or permit anyone else to
make any public statement or announcement that Executive was formerly
employed by or connected with Company.

The covenants set forth herein shall not include any period(s) of
violation of any covenant or any periods(s) of time required for
litigation to enforce any covenant. If the provisions set forth are
determined to be too broad to be enforceable at law, then the area and/or
length of time shall be reduced to such area and time and that shall be
enforceable.

10
<PAGE>

9. DESIGNATION OF BENEFICIARIES

Executive shall have the right at any time to designate any person(s)
or trust(s) as beneficiaries to whom any benefits payable under this
Agreement shall be made in the event of Executive's death prior to the
distribution of all benefits due Executive under this Agreement. Each
beneficiary designation shall be effective only when filed in writing with
the Company during Executive's lifetime. If Executive designates more than
one beneficiary, distributions of cash payments shall be made in equal
proportions to each beneficiary unless otherwise provided for in Executive's
beneficiary designation.

If Executive fails to designate a beneficiary as provided for above,
or if the beneficiary designation is revoked by marriage, divorce or
otherwise without execution of a new designation, or if the beneficiary
designated by Executive dies prior to distribution of the benefits due
Executive under this Agreement, the Board of Directors of the Company shall
direct the distribution of any benefits due under this Agreement to
Executive's estate.

10. SUCCESSORS

Except as provided for in Paragraph 9 above, the rights and duties of
a party hereunder shall not be assignable by that party PROVIDED, HOWEVER,
that this Agreement shall be binding upon and shall inure to the benefit of
any successor of the Company, and any such successor shall be deemed
substituted for the Company under the terms of this Agreement. The term
successor as used herein shall include any person, firm, corporation or other
business entity which at any time, by merger, purchase or otherwise, acquires
substantially all of the assets or business of the Company.

11. ATTORNEYS' FEES

a. SUBSEQUENT TO ANY CHANGE OF CONTROL

Subsequent to any Change of Control, in any action at law or in equity
brought by either party hereto to enforce any of the provisions or
rights under this Agreement, the Company, in addition to bearing its
own expenses, shall pay to Executive all costs, expenses and
reasonable attorneys' fees incurred therein by Executive (including
without limitation such costs, expenses and fees on any appeals), and
if Executive shall recover judgment in any such action or proceeding,
such costs, expenses and attorneys' fees shall be included as part of
such judgement.

b. PRIOR TO ANY CHANGE OF CONTROL

Prior to any Change of Control, in any action at law or in equity to
enforce any of the

11
<PAGE>

provisions or rights under this Agreement, the unsuccessful party to
such litigation, as determined by the Court in final judgment or
decree, shall pay the successful party or parties all costs, expenses
and reasonable attorneys' fees incurred therein by such party or
parties (including without limitation such costs, expenses and fees on
any appeals), and if such successful party or parties shall recover
judgment in such action or proceeding, such costs, expenses and
attorneys' fees shall be included as part of such judgment.

Notwithstanding the foregoing provisions, in no event prior to a
Change of Control shall the successful party or parties be entitled to
recover an amount from the unsuccessful party or parties for costs, expenses
and attorneys' fees that exceeds the costs, expenses and attorneys' fees
incurred by the unsuccessful party in connection with the action or
proceeding.

12. ARBITRATION

Company and Executive agree with each other that any claim of
Executive arising out of or relating to this Agreement or the breach of this
Agreement or Executive's employment by Company, including, without
limitation, any claim for compensation due, wrongful termination and any
claim alleging discimination or harassment in any form shall be resolved by
binding arbitration, except for claims in which injunctive relief is sought
and obtained. The arbitration shall be administered by the American
Arbitration Association under its Commercial Arbitration Rules at the
American Arbitration Association Office nearest Executive's place of
employment. The award entered by the arbitrator shall be final and binding in
all respects and judgment thereon may be entered in any Court having
jurisdiction.

13. ENTIRE AGREEMENT

14. VALIDITY

In the event that any provision of this Agreement is held to be
invalid, void or unenforcible, the same shall not affect, in any respect
whatsoever, the validity of any other provision of this Agreement.

15. PARAGRAPHS AND OTHER HEADINGS

Paragraphs and other headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretations of this Agreement.

16. NOTICE

Any notice or demand required or permitted to be given under this
Agreement shall be made in writing and shall be deemed effective upon the
personal delivery thereof if delivered or, if

12
<PAGE>

mailed, FORTY-EIGHT (48) hours after having been deposited in the United
States mail, postage prepaid, and addressed, in the case of the Company, to
the attention of the Board of Directors at the Company's then principal place
of business, presently 2209 West 1st Street, Tempe, Arizona 85281 and, in the
case of Executive, to 10129 N. 119th PLACE, SCOTTSDALE, ARIZONA 85259. Either
party may change the address to which such notices are to be addressed to it
by giving the other party notice in the manner herein set forth.

17. RIGHT OF EMPLOYMENT

Nothing stated or implied by this Agreement shall prevent the Company
from terminating the Service of Executive at any time nor prevent Executive
from voluntarily terminating Service at any time.

18. WITHHOLDING TAXES AND OTHER DEDUCTIONS

19. APPLICABLE LAW

To the full extent controllable by stipulation of the Company and
Executive, this Amendment shall be interpreted and enforced under Arizona law.

IN WITNESS WHEROF, the Company has caused this Agreement to be
executed by its duly authorized representative(s) and Executive has affixed
his signature as of the date first written above.

EXECUTIVE COMPANY

/s/ Gary R. Held GAMETECH INTERNATIONAL, INC.
- ---------------------
GARY R. HELD

BY: /s/ Richard T. Fedor
--------------------------

NAME: Richard T. Fedor
------------------------

TITLE: Chairman & CEO
-----------------------

<PAGE>

GAMETECH INTERNATIONAL, INC.

AMENDED
EMPLOYMENT
AGREEMENT

Whereas:

A. The Company and Executive have entered into that previous Executive
Employment Agreement dated August 14, 1997 whereby Executive was
employed as the PRESIDENT AND CHIEF OPERATING OFFICER of the Company.

B. The Company and Executive desire to amend the Executive Employment
Agreement, and;

C. The Company and Executive wish pursuant to this Agreement to set
forth their full and complete understandings in respect to the
above-mentioned employment relationship, replacing any and all previous
understandings and agreements, with the exception of the terms and
conditions stated in the Offer Sheet formally executed by GameTech
and Executive on March 4, 1997. Said Offer Sheet is herein attached
as Exhibit "A".

NOW, THEREFORE, in consideration of the provisions hereinafter
described, Company and Executive agree as follows:

1. DUTIES OF EXECUTIVE

During the term of this Agreement, Executive shall be employed by the
Company as its PRESIDENT AND CHIEF OPERATING OFFICER and in that capacity
shall perform all functions and duties consistent with such position on
behalf of the Company in an efficient, trustworthy and professional manner,
as reasonably required by the Board of Directors of the Company or the Board
of Directors governing any successor entity to the Company (the "Board").

<PAGE>

2. TERM OF AGREEMENT

3. DEFINITIONS

For purposes of this Agreement, the following terms shall have the
meanings set forth in this Paragraph 3:

A. "ANNUAL BASE SALARY" or "BASE SALARY" shall mean the annual base
salary rate in effect for Executive from time to time during the Term
of this Agreement in accordance with the provisions of Paragraph 4.a.
of this Agreement.

B. "ANNUAL BONUS" or "BONUS" shall mean a cash payment available
annually (or as otherwise provided for in this document) to Executive
in addition to Base Salary as determined in accordance with Paragraph
4.b. of this Agreement.

C. "CAUSE" shall mean (i) Executive's conviction for any felony
involving moral turpitude; or (ii) any conduct by Executive which is
materially injurious to the Company or its Enterprises. (Such cause
for conduct shall exist if Executive is guilty of dishonesty, gross
neglect of duty hereunder, or other act or omission which impairs
Company's ability to conduct its ordinary business in its usual
manner.) Such cause will be determined upon a meeting of the
Company's Board of Directors.

D. "CHANGE OF CONTROL" shall mean any of the following events: (i) the
Company consolidates with, or merges with or into, another entity or
sells, assigns, conveys, transfers, leases or otherwise disposes of
all or substantially all of the Company's assets to any entity, or any
entity consolidates with, or merges with or into, the Company and
the Company is not the surviving Corporation; (ii) the liquidation or
dissolution of the

<PAGE>

Company; (iii) during any consecutive two year period, individuals
who at the beginning of such period constituted the Board (together
with any new directors whose election by such Board or whose nomination
for election by the stockholders of the Company was approved by a
vote of the majority of the directors then still in office who were
either directors at the beginning of such period or whose election or
nomination was previously so approved) cease for any reason to
constitute a majority of the Board then in office; or (iv) any person
or group (as such terms are defined in Section 13(d) and 14(d) under the
Securities Exchange Act of 1934 (the "Exchange Act")) is or becomes
the beneficial owner (as defined in Rules 13(d)-3 and 13(d)-5 under
the Exchange Act, except that a person will be deemed to have
beneficial ownership of all securities that such person has the right
to acquire, whether such right is exercisable immediately or only
after the passage of time) directly or indirectly of more than 30% of
the total voting power entitled to vote in the election of the Board;
PROVIDED, however, that such person or group shall not include any
person or group that is the beneficial owner of more than 5% of the
total voting power as of the date of this Agreement.

E. "COMPENSATION COMMITTEE" means the Compensation Committee of the
Board of Directors.

F. "CONSTRUCTIVE TERMINATION" shall mean Executive's voluntary
Termination of Service within twelve (12) months following a Change of
Control or within ninety (90) days following the occurrence of one or
more of the following events, except if such event is approved in
writing by Executive prior to its occurrence:

(i) A failure by the Company to abide by any part of this Agreement
that is not remedied within thirty (30) business days after
receiving written notification by Executive of such failure;

(ii) A material reduction in Executive's title or responsibilities.

(iii) Relocation of Executive's primary place or work to an area
other than the location of the Company's principal executive
offices.

G. "DISABILITY" shall be deemed to have occurred if Executive makes
application for or is otherwise eligible for disability benefits
under any Company-sponsored long-term disability program covering
Executive, and Executive qualifies for such benefits. In the absence
of a Company-sponsored long-term disability program covering
Executive, Executive shall be presumed to be totally and permanently
disabled if so determined by the Company's Board

3
<PAGE>

following the Board's review of two independent medical opinions
satisfactory to the Board certifying that Executive will be permanently
unable to perform his normal duties as a result of a physical or mental
condition.

j. "FISCAL YEAR" shall mean the twelve-month period beginning November 1,
unless the Company, with the approval of the Internal Revenue Service,
shall establish a different fiscal year.

k. "LONG-TERM INCENTIVE PLAN" shall mean any stock option plan or any other
form of equity (real or phantom) or other long-term incentive plan
introduced by the Company.

l. "SERVICE" shall mean Executive's full-time or substantially full-time
employment with the Company, or any affiliated organization, including any
leave of absence approved by the Board.

m. "TERMINATION OF SERVICE" shall mean Executive's termination of Service for
any reason whatsoever, including death.

4. EXECUTIVE'S RIGHTS WHILE EMPLOYED BY THE COMPANY

a. BASE SALARY

Beginning on the effective date of this Agreement during the Term, the
minimum Annual Base Salary payable to Executive shall be ONE-HUNDRED AND
THIRTY THOUSAND DOLLARS ($130,000). Such Base Salary shall be paid in
equal bi-monthly installments on the Company's normal payroll dates.
Executive's Base Salary shall be reviewed annually by the Compensation
Committee if any, otherwise by the Board, and may be increased but not
decreased from time to time based on prevailing market conditions,
performance of the Executive and other considerations.

b. ANNUAL BONUS

<PAGE>

All fiscal year bonus amounts will be determined by and awarded in the
sole discretion of the Compensation Committee if any, otherwise by the
Board and commences with Executive's performance and the overall
performance of the Company, or pursuant to a Plan which may be adopted
by the Company making payment of bonuses contingent upon achievement of
goals and objectives set by the Board for the fiscal period.

c. LONG-TERM INCENTIVES

Executive shall participate in any Long-Term Incentive Plan that may be
designed specifically for Executive or provided to other executives of
the Company during the Term. (Grants to Executive under such Long-Term
Incentive Plan shall be no less favorable to Executive in amount and other
key design features, including vesting restrictions, with any other plans
provided to any other executive at the Company.)

d. FRINGE BENEFITS AND OTHER

The Company shall provide Executive with the following:

(i) Such benefits and perquisites, including but not limited to
disability income, deferred compensation or any form of savings or
retirement plan, and an automobile allowance as may from time to
time be provided to other executives of the Company. Such benefits
and perquisites shall exclude fees paid for Board or Board Committee
service, which are hereby included in Executive's Base Salary.
Benefits and perquisites shall be provided at the same proportional
cost to Executive as that paid by other executives of the Company
who participate in such programs;

(ii) Reasonable vacation/sick leave each year during the Term not less
than TWENTY-EIGHT (28) days. Executive is allowed to accrue a
maximum of SIXTY (60) full days of unused vacation/sick leave time.
Said vacation/sick leave shall not reduce Executive's compensation
under this Agreement;

(iii) Payment of premiums on professional liability insurance for
Executive;

(iv) Payment of dues for such professional societies and associations
of which Executive is a member that benefit the Company;

<PAGE>

other plan of the Company, for the benefit of its employees
generally or a group of them, now or hereafter in existence

(vi) It shall be at the Board's discretion to grant any other fringe
benefits to Executive.

5. EXECUTIVE'S RIGHTS UPON TERMINATION OF SERVICE

a. FOR REASON OF VOLUNTARY RESIGNATION CONSTITUTING CONSTRUCTIVE
TERMINATION BY THE COMPANY WITHOUT CAUSE

In the event of Executive's Termination of Service for reason of (i)
voluntary resignation by Executive constituting Constructive Termination,
(ii) Executive's Termination of Service by the Company without Cause or
(iii) Executive's Termination of Service for any reason except those
specifically described in paragraphs 5.b through 5.f herein, Executive
(or if Executive dies while benefits remain due under this Agreement,
Executive's beneficiaries as designated in accordance with the provisions
of Paragraph 9 herein) shall be entitled to receive the following upon
such Termination of Service:

(i) Payment immediately upon Executive's Termination of Service of
any previously unpaid Base Salary and any Bonus granted and
previously unpaid or the pro-rata portion of any Bonus earned by
Executive pursuant to any plan (if necessary, the Company may pay
such Bonus when all bonuses for that Fiscal Year are calculated
and paid) through the date of Executive's Termination of Service;

(ii) Immediate vesting of any stock options or other rights
previously provided to Executive under any Company Long-Term
Incentive Plan; and

(iii) Payment of a lump sum amount equal to TWO (2) years of
Executive's Base Salary.

In the event of a Change of Control, Executive shall be also entitled
to the protections outlined in Paragraph 7 herein.

b. FOR REASON OF EXPIRATION OF THE TERM OF THIS AGREEMENT

In the event of Executive's Termination of Service for reason of
expiration of the Term of this Agreement pursuant to Paragraph 2 thereof,
Executive (or if Executive dies while benefits remain due under this
Agreement, Executive's beneficiaries as designated in accordance with the
provisions of Paragraph 9 thereof) shall be entitled to receive the
following upon such Termination of Service:

<PAGE>

(i) Payment immediately upon Executive's Termination of
Service of any previously unpaid Base Salary and any Bonus
granted and previously unpaid or the pro-rata portion of
any Bonus earned by Executive pursuant to any plan (if
necessary, the Company may pay such Bonus when all bonuses
for that Fiscal Year are calculated and paid) through the
date of Executive's Termination of Service;

(ii) Immediate vesting of any stock options or other rights
previously provided to Executive under any Company
Long-Term Incentive Plan;

(iii) Payment of any Disability or other benefits provided to
Executive by the Company in accordance with the terms and
conditions of such benefits and this Agreement.

(iv) Payment of a lump sum amount equal to ONE(1) year of
Executive's Annual Base Salary.

c. FOR REASON OF DISABILITY

(i) Payment immediately upon Executive's Termination of
Service of any previously unpaid Base Salary and any Bonus
granted and previously unpaid or the pro-rata portion of
any Bonus earned by Executive pursuant to any plan (if
necessary, the Company may pay such Bonus when all bonuses
for that Fiscal Year are calculated and paid) through the
date of Executive's Termination of Service;

(ii) Immediate of vesting of any stock options or other rights
previously provided to Executive under any Company
Long-Term Incentive Plan;

(iii) Payment of any Disability or other benefits provided to
Executive by the Company in accordance with the terms and
conditions of such benefits and this Agreement;

(iv) Payment of a lump sum amount equal to the remaining Term
of Executive's Base Salary.

7
<PAGE>

d. FOR REASON OF DEATH

In the Event of Executive's Termination of Service of Reason of
Death. Executive's beneficiaries as designated in accordance with
the provisions of Paragraph 9 hereof shall be entitled to receive
the following upon such Termination of Service:

(ii) Immediate vesting of any stock options or other rights
previously provided to Executive under any Company
Long-Term Incentive Plan;

(iii) Payment of any other benefits provided by the Company in
accordance with the terms and conditions of such benefits
and this Agreement.

(iv) Payment of a lump sum amount equal to the remaining Term
of Executive's Base Salary. (Payment to be made to
Executive's Estate.)

e. FOR REASON OF VOLUNTARY RESIGNATION NOT CONSTITUTING CONSTRUCTIVE
TERMINATION

(i) Payment immediately upon Executive's Termination of
Service of any previously unpaid Base Salary and any Bonus
granted and previously unpaid or the pro-rata portion of
any Bonus earned by Executive pursuant to any plan (if
necessary, the Company may pay such Bonus when all bonuses
for that Fiscal Year are calculated and paid) through the
date of Executive's Termination of Service.

8
<PAGE>

between the Company and Executive covering such options or
other rights.

(iii) Payment of any Disability or other benefits provided to
Executive by the Company in accordance with the terms and
conditions of such benefits and this Agreement.

f. FOR REASON OF CAUSE

In the Event of Executive's Termination of Service for reason of
Cause, the Company's obligations to executive shall be limited to:

(i) Payment immediately upon Executive's Termination of
Service of any previously unpaid Base Salary;

(ii) Performance of Company obligations with respect to
Executive's exercise of any stock options or other rights
previously granted to Executive under any Company
Long-Term Incentive Plan provided such options or other
rights have vested as of the date of the termination of
executive's service in accordance with any agreement
between the Company and Executive covering such options or
other rights.

6. MITIGATION AND OFFSET REQUIREMENTS

Executive shall not be required to mitigate the amount of any
benefit provided for in this agreement by actively seeking
alternative employment during the period in which such benefits are
paid. In addition, except as provided for in Paragraph 8 hereof,
Executive shall not be required to offset any such benefits
provided for in this Agreement by amounts earned as a result of
Executive's employment or self-employment during the period in
which Executive is entitled to receive such benefits.

7. ADDITIONAL RIGHTS UPON A CHANGE OF CONTROL

8. BREACH OF CONFIDENTIALITY OR ENTERING INTO A DIRECT COMPETITION

a. DURING THE AGREEMENT PERIOD

<PAGE>

court, legislative body or regulatory agency, (a) engage directly or
indirectly (including by way of example only, as a principal, partner,
venturer, employee or agent) nor have any direct or indirect interest,
in any business which competes with the Company or its Enterprises in
any material way, (b) disclose to any third party, either directly or
indirectly, any non-public information regarding the Company's or its
Enterprises, business, customers, financial condition, strategies or
operations the disclosure of which could possibly harm the Company or
its Enterprises in any material way. Clause (a) above shall not apply
to any investment by Executive in the stock of a publicly-traded
corporation, provided such investment constitutes less than five percent
(5%) of such corporation's voting shares.

In the event that, Executive violates clauses (a) or (b) above, Executive's
rights to any benefits under this Agreement shall immediately terminate.

b. UPON TERMINATION OF AGREEMENT

It is understood and agreed that the nature of the methods employed in
Company's business are such that Executive will be placed in a close
business and personal relationship with the customers of Company. Thus,
for a period of TWO (2) years immediately following the termination of
Executive's employment (or retirement by Executive) for any reason
whatsoever, so long as Company continues to carry on the same or similar
business, said Executive shall not, for any reason whatsoever, directly
or indirectly, for him or on behalf of, or in conjunction with, any other
person, persons, company, partnership, corporation or business entity.

(i) call upon, divert, influence or solicit or attempt to call upon,
divert, influence or solicit any customer or customers of Company.

(ii) divulge the names and addresses or any information concerning any
customer of Company;

(iii) own, manage, operate, control, be employed by, participate in or be
connected in any manner with the ownership, management, operation
or control of the same, similar, or related line of business as that
carried on by Company within a radius of TWENTY-FIVE (25) miles from
any then existing or proposed office of Company; and

(iv) make any public statement or announcement, or permit anyone else to
make any public statement or announcement that Executive was
formerly employed by or connected with Company.

The covenants set forth herein shall not include any period(s) of violation
of any covenant or any period(s) of time required for litigation to enforce
any covenant. If the provisions set forth are determined to be too broad to be
enforceable at law, then the area and/or length of time shall be reduced to
such area and time as enforceable.

<PAGE>

9. DESIGNATION OF BENEFICIARIES

The filing of a new beneficiary designation shall cancel all designations
previously filed. Any finalized marriage or divorce (other than common law
marriage) of Executive subsequent to the date of filing a beneficiary
designation shall revoke such designation unless (a) in the case of divorce,
the previous spouse was not designated as beneficiary, and (b) in the case of
marriage, Executive's new spouse had previously been designated as
beneficiary. Executive's Spouse shall join in any designation of a
beneficiary other than Executive's Spouse.

10. SUCCESSORS

11. ATTORNEYS' FEES

a. SUBSEQUENT TO ANY CHANGE OF CONTROL

Subsequent to any Change of Control, in any action at law or in equity
brought by either party hereto to enforce any of the provisions or
rights under this Agreement, the Company, in addition to bearing its
own expenses, shall pay to Executive all costs, expenses and reasonable
attorneys' fees incurred therein by Executive (including without
limitation such costs, expenses and fees on any appeals), and if
Executive shall recover judgment in any such action or proceeding, such
costs, expenses and attorneys' fees shall be included as part of such
judgment.

b. PRIOR TO ANY CHANGE OF CONTROL

Prior to any Change of Control, in any action at law or in equity to
enforce any of the

<PAGE>

provisions or rights under this Agreement, the unsuccessful party to
such litigation, as determined by the Court in a final judgment or
decree, shall pay the successful party or parties all costs, expenses
and reasonable attorneys' fees incurred therein by such party or
parties (including without limitation such costs, expenses and fees on
any appeals), and if such successful party or parties shall recover
judgment in such action or proceeding, such costs, expenses and
attorneys' fees shall be included as part of such judgment.

12. ARBITRATION

Company and Executive agree with each other that any claim of Executive
arising out of or relating to this Agreement or the breach of this Agreement
or Executive's employment by Company, including, without limitation, any
claim for compensation due, wrongful termination and any claim alleging
discrimination or harassment in any form shall be resolved by binding
arbitration, except for claims in which injunctive relief is sought and
obtained. The arbitration shall be administered by the American Arbitration
Association under its Commercial Arbitration Rules at the American
Arbitration Association Office nearest Executive's place of employment. The
award entered by the arbitrator shall be final and binding in all respects
and judgment thereon may be entered in any Court having jurisdiction.

13. ENTIRE AGREEMENT

With respect to the matters specified herein, this Agreement contains
the entire agreement between the Company and Executive and supersedes (with
the exception of Exhibit "A" herein attached) all prior written agreements,
understandings and commitments between the Company and Executive. No
amendments to this Agreement may be made except through a written document
signed by the Executive and approved in writing by the Company's Board.

14. VALIDITY

In the event that any provision of this Agreement is held to be
invalid, void or unenforceable, the same shall not affect, in any respect
whatsoever, the validity of any other provision of this Agreement.

15. PARAGRAPHS AND OTHER HEADINGS

Paragraphs and other headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretations of this Agreement.

16. NOTICE

Any notice or demand required or permitted to be given under this
Agreement shall be made in writing and shall be deemed effective upon the
personal delivery thereof if delivered or, if

<PAGE>

mailed, FORTY-EIGHT (48) hours after having been deposited in the United
States mail, postage prepaid, and addressed, in the case of the Company, to
the attention of the Board of Directors at the Company's then principal place
of business, presently 2209 West 1st Street, Tempe, Arizona 85281 and, in the
case of Executive, to 4508 HABERSHAW ROAD, NW, ALBUQUERQUE, NEW MEXICO 87120.
Either party may change the address to which such notices are to be addressed
to it by giving the other party notice in the manner herein set forth.

17. RIGHT OF EMPLOYMENT

Nothing stated or implied by this Agreement shall prevent the Company
from terminating the Service of Executive at any time nor prevent Executive
from voluntarily terminating Service at any time.

18. WITHHOLDING TAXES AND OTHER DEDUCTIONS

19. APPLICABLE LAW

To the full extent controllable by stipulation of the Company and
Executive, this Amendment shall be interpreted and enforced under Arizona law.

IN WITNESS WHEROF, the Company has caused this Agreement to be executed
by its duly authorized representative(s) and Executive has affixed his
signature as of the date first written above.

EXECUTIVE COMPANY

/s/ Conrad J. Granito, Jr. GAMETECH INTERNATIONAL, INC.
- --------------------------
CONRAD J. GRANITO, JR.

BY: /s/ Richard T. Fedor
--------------------
NAME: Richard T. Fedor
------------------
Title: Chairman & CEO
-----------------

13
<PAGE>

EXHIBIT A
---------

<PAGE>

[LETTERHEAD]

Mr. Conrad J. Granito Jr. March 4, 1997
4508 Habershaw Road NW
Albuquerque, New Mexico 87120

Dear Conrad:

Per our discussion the following is a summary of the offer GameTech is making
to you for the position of President & Chief Operating Officer.

- - Starting salary $130,000 per year with annual performance reviews based on
sales, profitability, new product introductions, new market penetration and
expense and cost controls. I will be working on a formalized bonus and
salary package for all the senior players this year.

- - After your 90 day probation period you will become a member of the Board
of Directors.

- - You will receive a total stock option grant of Two Hundred Thousand
(200,000) shares of stock at $1.00 per share. Your vesting will be as
follows:

100,000 shares upon completion of 12 months of full time service.
20,000 additional shares upon completion of 24 months of full time service.
30,000 additional shares upon completion of 36 months of full time service.
50,000 additional shares upon completion of 48 months of full time service.

- - All options will have a ten year life.

- - If GameTech is purchased by another company you will become immediately
vested in the above stock option grants.

- - Any cost in doing a public offering of GameTech stock will be the
responsibility of GameTech and will place no financial burden on you.

- - You will participate in the GameTech executive bonus program, incentive
stock option program and the company profit sharing program.

- - You will participate in the company's premium free medical, dental and
vision programs. However, this is subject to change depending upon future
cost impact to the company. You will participate in the same manner as all
other officers.

<PAGE>

In addition you may want to look at the Cobra medical cost to you and your
family for the next 18 months vs GameTech's cost. If yours is cheaper
GameTech will pick up the premiums.

- - GameTech will grant you an allowance up to $2,000 per month for temporary
living. This allowance will be for six months. If temporary living
arrangements are needed GameTech will look at renting something for you in
lieu of some of the allowance. This may have a favorable tax impact.

- - GameTech will grant you a $7,500 moving allowance.

- - GameTech will pay the airfare for two round trips per month up to a
maximum of six months to Albuquerque.

- - You will receive four weeks discretionary time off for vacation, sick
leave etc.

- - Upon completing your move to our designated corporate headquarters you
will be granted a $750 car allowance and a company gas credit card.

- - Upon completion of your 90 probationary period we will formalize a formal
contract/employment agreement.

Conrad, because of the importance of your current General Management position
to the Isleta Indian community and the significant legal issues you are
currently addressing at the Governor's level we will give you up to six months
to make this transition. However, during this time period we expect you to be
available for consultation and attendance at critical tactical and strategic
management meetings.

We at GameTech are looking forward to you joining our company and the
many opportunities we face. In addition, I will try and delay the strategic
discussion with BCM and Bingo King. I am looking forward in sharing our
vision for the future and working with you.

Best regards,

/s/ Richard T. Fedor 3-4-97 /s/ Conrad J. Granito Jr. 3-4-97
- ----------------------------- -----------------------------------
Richard T. Fedor Date Conrad J. Granito Jr. Date

<PAGE>

GAMETECH INTERNATIONAL, INC.
EXHIBIT 11.1-STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE

<TABLE>
<CAPTION>
Period from
inception
(April 18,
1994) through
October 31,
------------ ------------
Years ended October 31, Nine months ended July 31,
1994 1995 1996 1996 1997

<S> <C> <C> <C> <C> <C>
Primary:
Weighted average common - 4,420,646 5,117,517 5,110,986 4,299,686
shares outstanding during
the period
Shares related used to SAB
No. 83 1,346,614 1,346,614 1,346,614 1,346,614 1,346,614
---------------------------------------------------------------------------
Total shares used in primary net
income (loss) per share 1,346,614 5,767,260 6,464,131 6,457,600 5,640,300
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Net income (loss) $ (175,408) $ 592,260 $ 804,732 $ 422,019 $2,154,585
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Primary net income (loss) per
share $ (.13) $ .10 $ .12 $ .07 $ .38
Supplementary Primary:
Total primary shares from above 6,464,131 5,646,300
Shares necessary to repay debt
on a net proceeds basis 395,869 395,869
---------- ----------
Total shares used in supplementary
primary net income per share 6,860,000 6,042,163
---------- ----------
---------- ----------

Net income $ 804,732 $2,154,585
After-tax interest on debt to be
repaid with offering proceeds 75,206 123,998
---------- ----------
Supplementary primary net income $ 879,938 $2,278,583
---------- ----------
---------- ----------
Supplementary primary net income
per share $ .13 $ .38
---------- ----------

Fully Diluted:
Total primary shares from above 1,346,614 5,767,260 6,464,131 6,457,600 5,646,300
Incremental shares attributable
to conversion of notes payable
to officers on their original
dates of issue 936,275 1,348,066 1,424,723 1,348,785 1,444,212
---------------------------------------------------------------------------
Total shares used in fully diluted
net income (loss) per share 2,282,889 7,115,326 7,888,854 7,806,385 7,090,512
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Net income (loss) $ (175,408) $ 592,322 $ 804,732 $ 422,019 $2,154,585
After-tax interest on notes
payable to officers 59,881 117,006 96,975 69,096 82,438
---------------------------------------------------------------------------
Fully diluted net income (loss) $ (115,527) $ 709,328 $ 901,707 $ 491,115 $2,237,023
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Fully diluted net income (loss) $ (.05) $ .10 $ .11 $ .06 $ .32
---------------------------------------------------------------------------
---------------------------------------------------------------------------
per share(1)

SUPPLEMENTARY FULLY DILUTED:
Total fully diluted shares from 7,888,854 7,090,512
above
Share necessary to repay debt on 395,869 395,869
a net proceeds basis ---------- ----------
Total shares used in supplementary 8,284,723 7,486,381
fully diluted net income per ---------- ----------
share

Fully diluted net income from $ 901,707 $2,237,023
above
After-tax interest on debt to be
repaid with offering proceeds 75,206 123,998
---------- ----------
Supplementary fully diluted net
income $ 976,913 $2,361,021
---------- ----------
Supplementary fully diluted net
income per share $ .12 $ .32
---------- ----------
---------- ----------
</TABLE>

(1) The computed per share amount assuming full dilution for the 1994 period
is antidilutive; therefore the primary per share amount for this period
is also presented as the fully diluted amount on the face of the Statement
of Operations included elsewhere herein.

<PAGE>

EXHIBIT 23.1

CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

We consent to the reference to our firm under the captions "Selected Financial
Data" and "Experts" and to the use of our report dated September 12, 1997, in
Amendment No. 1 to the Registration Statement (Form S-1 No. 333-34967) and
related Prospectus of GameTech International, Inc. for the registration of
4,266,500 shares of its common stock.

We also consent to the incorporation by reference therein of our report dated
September 12, 1997 with respect to the financial statement schedule of GameTech
International, Inc. for the period from inception (April 18, 1994) through
October 31, 1994 and the years ended October 31, 1995 and 1996 included in
the Registration Statement (Form S-1 No. 333-34967) and related Prospectus of
GameTech International, Inc. for the registration of 4,266,500 shares of its
common stock.

ERNST & YOUNG LLP

Sacramento, California
October 16, 1997

<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEETS OF GAMETECH INTERNATIONAL, INC. AS OF OCTOBER 31, 1996 AND JULY 31, 1997
AND THE RELATED STATEMENTS OF OPERATIONS AND STOCKHOLDERS' EQUITY FOR FISCAL
YEAR ENDED OCTOBER 31, 1996 AND THE NINE, MONTHS ENDED JULY 31, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>

<S> <C> <C>
<PERIOD-TYPE> YEAR 9-MOS
<FISCAL-YEAR-END> OCT-31-1996 OCT-31-1997
<PERIOD-START> NOV-01-1995 NOV-01-1996
<PERIOD-END> OCT-31-1996 JUL-31-1997
<CASH> 166,119 214,682
<SECURITIES> 0 0
<RECEIVABLES> 648,356 1,284,147
<ALLOWANCES> 102,000 170,000
<INVENTORY> 0 0
<CURRENT-ASSETS> 1,021,669 2,429,704
<PP&E> 5,102,493 8,682,465
<DEPRECIATION> 808,156 1,716,697
<TOTAL-ASSETS> 5,710,370 9,922,198
<CURRENT-LIABILITIES> 2,407,163 3,025,572
<BONDS> 0 0
0 0
0 0
<COMMON> 5,182 4,450
<OTHER-SE> 1,780,156 3,263,019
<TOTAL-LIABILITY-AND-EQUITY> 5,710,370 9,922,178
<SALES> 0 0
<TOTAL-REVENUES> 5,364,017 8,891,615
<CGS> 0 0
<TOTAL-COSTS> 1,614,562 2,244,576
<OTHER-EXPENSES> 477,482 384,890
<LOSS-PROVISION> 78,196 95,000
<INTEREST-EXPENSE> 279,032 346,279
<INCOME-PRETAX> 1,368,949 590,585
<INCOME-TAX> 589,217 1,416,000
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 804,732 2,154,585
<EPS-PRIMARY> .12 .38
<EPS-DILUTED> .11 .32

</TABLE>