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Lottomatica reports results

PROVIDENCE, Rhode Island – (PRESS RELEASE) -- The Board of Directors of Lottomatica S.p.A., chaired by Mr. Lorenzo Pellicioli, approved today the consolidated accounts of Lottomatica Group for 2006, which include 12 months of Lottomatica Italian operations and four months of GTECH operations. The Board of Directors also approved the financial statements of Lottomatica S.p.A. and will submit to the Annual General Meeting for approval. The Board further recommended a proposed dividend, and scheduled an ordinary and extraordinary shareholders' meeting for April 23, 2007.

"Our 2006 results were very positive, and we are encouraged by the continuous strong development of the Italian instants market," said W. Bruce Turner, CEO of Lottomatica Group. "We are clearly seeing the benefits of the merger and beginning to leverage Lottomatica's operational expertise in several areas including privatization plans and operator markets around the world. We are also utilizing our GTECH subsidiary's operational expertise to supplement growth across the Italian platform as we look to provide a broader array of technology, content, and distribution products within our Italian world showcase. Our confidence in 2007 and beyond remains high, and we are excited about the long-term growth prospects of the business."

"We delivered another strong year of performance in 2006," said Marco Sala, Managing Director of Lottomatica Italian Operations. "For our Italian operations, total Lottery wagers grew 19 percent year-over-year, and we experienced continued growth in the Commercial Services segment. With our recent sports betting award, we look forward to launching and developing our Italian sports betting business."

Lottomatica Group Full-Year Results

Lottomatica Group Consolidated

Income Statements (M Euros) December 31, 2006 December 31, 2005

Revenues 938.9 582.8

EBITDA 361.2 264.0

Adjusted EBITDA 408.6 --

EBITDA % 38% 45%

Adjusted EBITDA % 44% --

EBIT 218.9 212.3

EBIT % 23% 36% Net Income 0.8 114.2

Note: 2006 Results include 12 months of Lottomatica stand-alone operations and four months of GTECH operations since the acquisition took place on August 29, 2006; 2005 reflects 12 months of Lottomatica stand-alone operations.

Revenues for 2006 totaled 938.9 million euros including approximately 289.3 million euros from four months of GTECH operations. Overall, revenues grew 61.1% year-over-year, while revenue from Lottomatica's Italian operations grew 11.5% year-over-year.

EBITDA was 361.2 million euros, up 36.8% over the 12 months of 2005. EBITDA adjusted for transaction and other costs would have been approximately 409 million euros. EBIT was 218.9 million euros, and EBIT as adjusted for transaction costs and purchase price amortization for the GTECH acquisition, and other costs, would have been 304 million euros.

Net Income was 0.8 million euros for the 12 months ended December 31, 2006. Included in Net Income was approximately 131 million euros (after tax) of transaction and other costs.

Lottomatica Italy - Operating Results and Business Highlights

The Italian operations enjoyed substantial revenue growth in the 12 months of 2006, both in the Lottery and the Commercial Services businesses.

Revenues grew approximately 11.5% to 649.6 million euros in 2006, from 582.8 million euros in 2005.

Lottery wagers grew approximately 19% to 10.6 billion euros in 2006, from 8.9 billion euros for the same period last year, as strong Instants lottery performance more than offset the slight decrease in Lotto.

Lotto game wagers reached 6.6 billion euros in 2006, a drop of 9.9% against 7.3 billion euros in 2005, and Lotto revenues were 406.1 million euros, compared to 432.4 million euros in 2005.

The strong performance of instant tickets, including traditional lotteries, resulted in sales of approximately 4.0 billion euros, compared to sales of approximately 1.5 billion euros in 2005. The number of Scratch & Win tickets sold equaled 1.6 billion, compared to 795 million in the same period last year. The price point grew to approximately 2.4 euros, mainly driven by the success of the 5 euro ticket "Miliardario" launched in September 2005. Revenues for the Instant and Traditional Lotteries business totaled 138.7 million euros compared with 54.9 million euros for 2005. In January 2007, the new 10 euro instant lottery ticket was launched and has been well received by players.

Revenues from Commercial Services improved by 15.7% over last year, driven primarily by an increase in the number of cellular phone top-ups that were processed.

EBITDA for Lottomatica Italian operations was 278.0 million euros, and as adjusted for transaction and other costs, would have been approximately 298 million euros.

In December 2006, Lottomatica was awarded 1,144 licenses for sports betting and 500 licenses for horseracing by the Italian government. Lottomatica is currently the leading operator in the sports betting "shop in shop" segment in Italy, with primary concentration in the main Italian towns, with approximately 45% share of rights.

GTECH Operating Results and Business Highlights

Revenue contribution for the four months of GTECH operations was 289.3 million euros, with approximately 252.4 million euros from the Lottery segment, 20.8 million euros from Gaming Solutions, and approximately 16.1 million euros from Commercial Services.

EBITDA from GTECH operations was approximately 83.2 million euros, and excluding transaction and other costs, would have been approximately 111 million euros.

In 2006, GTECH acquired three new online lottery customers, and made significant strategic progress in its Gaming Solutions business.

GTECH signed a seven-year agreement with the North Carolina Lottery and is providing a fully-integrated online and instant ticket lottery system, lottery terminals, a wireless communications network, ITVMs (Instant Ticket Vending Machines), and ongoing services, including management of the warehousing and distribution of instant tickets. A seven-year integrated services agreement was received from the Virginia Lottery to provide a new online lottery central system, new terminals, a new wireless communications network and ongoing services.

In addition, GTECH entered into an agreement with Supreme Gaming LLC to become the provider of an online lottery system, products, and ongoing services in Guatemala for 15 years.

GTECH successfully defended lottery contracts in Oregon and Singapore, and received extensions in Kentucky, Minnesota, Beijing, and Trinidad & Tobago.

On the Gaming Solutions front, GTECH received a contract to install a new video central system for Manitoba Lotteries Corporation. In addition, GTECH launched the largest gaming central system in the state of Pennsylvania. Lottomatica continues to move forward with the necessary commercial gaming licensing activity required to close the pending acquisition of Atronic International, the largest privately-held global provider of gaming equipment. Closing is expected by December 31, 2007, once all necessary regulatory activity is complete.

Other Business Developments

The New York Lottery recently awarded GTECH a three-year contract extension to continue operating the Lottery's online/instants system and providing ongoing services through February 2010. GTECH expects to receive in excess of 150 million euros over the three-year period.

GTECH also completed the previously-announced acquisition of substantially all of the assets of Creative Games International, Inc. (CGI), a leading provider of instant lottery tickets for the global lottery industry and a wholly-owned subsidiary of Canadian Bank Note Company Ltd.

The Camelot consortium, in which GTECH is a major technology supplier, recently submitted a bid for the next license to operate the National Lottery in the U.K. A decision by the National Lottery is expected in June 2007.

Consolidated Cash Flow and Net Financial Position

Lottomatica Group closed the year with a Net Financial Position of 2.5 billion euros, with Cash and Equivalents of approximately 396.6 million euros at the end of period. During 2006, Lottomatica paid out 119.4 million euros in dividends.

Consolidated Shareholders' Equity

Consolidated shareholders' equity totaled 1.9 billion euros.

Other Information

The 2006 financial statements approved by the Board of Directors of Lottomatica S.p.A. will be submitted for approval at the shareholders' meeting scheduled for April 23, 2007. At this meeting, the Board of Directors will also propose a dividend distribution of 0.79 euros to shareholders. If approved at the meeting, the dividend will be paid in May 2007, by means of the existing liquid assets of the Company, with an ex-dividend date of May 21, 2007, payable on May 24, 2007.

Finally, the Board of Directors resolved to propose to the Meeting a new stock option plan for 2007 - 2015, reserved for Lottomatica and its subsidiaries' employees.

Lottomatica S.p.A.

Parent company, Lottomatica S.p.A., had total revenues of 488.8 million euros in 2006, compared with 490.0 million euros in 2005. Net Income was 2.3 million euros, compared with 94.9 million euros as of December 31, 2005.

Lottomatica is one of the world's largest commercial lottery operators and a market leader in the Italian gaming industry. GTECH is a leading gaming technology and services company, providing innovative technology, creative content, and superior service delivery. GTECH and Lottomatica together create a fully integrated lottery operator and gaming technology solutions provider - a combined company with worldwide scale, considerable financial strength, and industry-leading customer solutions. Lottomatica is majority owned by the De Agostini Group, a century-old publishing, media, and financial services company. Lottomatica is publicly traded on the Italian Stock Exchange (LTO), and in 2006, had more than 1.6 billion euros in revenues and 6,000 employees in over 50 countries when combined with GTECH.

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