GTECH signs a one-year contract with Caixa, the administrator of the National Lottery in Brazil

GTECH signs deal with Brazil lottery operator

GTECH Holdings Corporation, represented by its wholly-owned subsidiary, GTECH Brazil, has signed a new one-year contract with Caixa, the administrator of the National Lottery in Brazil. The deal came into force on May 15, 2005 and lets the USA-based informational technology giant continue operating lottery and financial transaction processing systems for Brazilian lottery.

Under the current agreement, the Brazilian gambling enterprise may extend GTECH's contract beyond the expiration date of May 14, 2006. In return for the new contract, GTECH has agreed to reduce the rate of approximately 12 percent from the previous contract pricing.

"GTECH has reached an agreement with Caixa that will support their migration path to a new business model," said GTECH President and CEO W. Bruce Turner. "We will continue to work closely with Caixa and its vendors in order to assist in a seamless transition and gradual exit by GTECH."

With the help of new agreement, GTECH expects to raise revenues of about US$105 million to $120 million from the Caixa contract during fiscal 2006, including the recovery of withholding payments from fiscal 2005. With respect to the new contract, the Company expects to generate approximately US$80 million to $85 million in service revenue over the contract term, which essentially runs from the second quarter of fiscal 2006 through the end of the first quarter of fiscal 2007.