International Lottery and Totalizator Systems

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International Guild of Hospitality & Restaurant Managers

International Lottery and Totalizator Systems, Inc. (OTC BB:ITSI.OB)

2131 Faraday Avenue
Carlsbad, CA 92008

Phone: (760) 931-4000
Fax: (760) 931-1789
Email: mktg@ilts.com
Employees (last reported count): 64

International Lottery & Totalizator Systems, Inc. (ILTS), incorporated in 1978, designs, manufactures, sells, manages, supports and services computerized wagering systems and terminals for the global online lottery and pari-mutuel racing industries. It also provides facilities management services to organizations authorized to conduct online lotteries. The Company's technology can be used in other transaction-processing applications such as keno gaming and for toll turnpike systems utilizing automated ticket printer/readers. Its wagering systems include the Datamark and Intelimark family of point-of-sale (POS) terminals, a central computer installation that is comprised of HP/Compaq computer hardware and a commercially available operating system used in conjunction with the Company's DataTrak application software, as well as the required communication network to interface the terminals to the central computer installation.

The POS, proprietary components of ILTS' systems are the Datamark and Intelimark family of ticketing terminals. These terminals are compact, reliable, microprocessor-based units that scan marksense slips or interpret operator-input data in order to produce a ticket receipt to be retained by the customer. The Company sells the Datamark and/or Intelimark terminals separately or as part of a turnkey wagering application system or it will modify a terminal's features or configurations and central system software to meet specific customer requirements. The DataTrak central system, which controls the overall lottery operation, and the Datamark and Intelimark family of terminals can be sold separately. The DataTrak system can be sold as a stand-alone system that will interface to third-party lottery terminals. Likewise, the Company's Datamark and Intelimark terminals can be sold separately to interface to a third-party lottery/tote central system.

The Company has developed several models of terminals to meet the varied requirements of different wagering applications. All are personal computer (PC) compatible, Intel microprocessor-based and have a compact, lightweight design for countertop operation. The terminals are approximately 12-inches deep, 12-inches wide, 10-inches high, weigh approximately 27 pounds and are accompanied by a built-in or external display and keyboards.

The Datamark models utilize a patented, compact, single-ticket path that allows the terminal to print and read from both sides of the same ticket without operator intervention. The terminal utilizes quick, quiet thermal printing that does not require an inked cartridge or ribbon as do impact, dot matrix printers. The terminals use either pre-cut, thermal-coated tickets or thermal-coated, roll-stock tickets or both. Some models will sequentially read and print up to 50 tickets entered at one time through the use of a bulk-feed option.

The Datamark terminal is best suited for application in the racing industry and is capable of issuing tickets for standard betting, as well as for any pool wagers being used in pari-mutuel wagering. The terminals are designed to facilitate multiple bets on one ticket and multiple selections for each bet. To process a wagering transaction, the bettor marks selections on a pre-printed playslip, which is then read optically by the terminal, the amount wagered is calculated and the bet details printed on the back of the same ticket. Because the betting selections are prepared by the bettor away from the pari-mutuel clerk's window, total transaction time is reduced, efficiency of the operation is improved and the bettor obtains more privacy in the betting transaction.

The Intelimark terminal has been designed in concert with Seiko-Epson Corporation, a provider of POS terminals. The Intelimark can be configured for both tote and lottery applications. ILTS is a registered value-added reseller (VAR) of POS terminal equipment manufactured by Epson America, Inc. For the tote market, the Intelimark is configured with a custom designed integrated reader/printer mechanism. A variant of the Datamark mechanism is used to meet the requirements of racing applications. In the case of lottery applications, the reader/printer is designed to use a commercially available optical mark sense reader and roll-stock thermal printer. Both configurations can be offered with touch-screen color super video graphics adapter (SVGA) display or integral keyboard or both, depending on customer requirements. All configurations have been developed to provide a cost-competitive terminal for the customer. Both the lottery and horseracing applications that utilize the touch screen make use of the Company's graphical user interface for the placement of wagers. This interface greatly simplifies and reduces the time required to place a bet.

The nucleus of each wagering system is the central computer that receives information from ticket-issuing terminals, accumulates wagering data, calculates odds and payouts and provides a means of database management in order to distribute information and allow generation of management reports. In cooperation with the customer, the Company designs the configuration of the central computer installation to provide the required games, fault-tolerant operation, high throughput and security. The entire application is called DataTrak. The DataTrak system has been developed by ILTS to make use of commercially available software operating systems and software programs to facilitate modification at a much lower cost to the customer than in the past, where proprietary software limited the customer's ability to perform changes to the system.

Each central computer installation typically includes a client-server computer configuration that uses Alpha computers manufactured by HP/Compaq. ILTS is a registered VAR of HP/Compaq computer equipment. Certain of the Company's customers use software in their pari-mutuel systems that are proprietary to ILTS.

The DataTrak's transaction processing module was originally developed by the Hong Kong Jockey Club (HKJC). The Company has made significant modifications and enhancements to the HKJC software. Chief among them is the migration of the system to a client-server architecture using HP/Compaq computer hardware, the incorporation of relational database software and the utilization of a Windows operating system for management information and control. These modifications and enhancements provide scalability to the system so that each customer's requirements can be met in a cost-effective way, the configuration can be changed easily as required and the customer is able to process data within a familiar software user interface environment.

ILTS has also added numerous new features to the base software including instant ticket validation and player registration. The system has the following characteristics: rapid processing; storage and retrieval of transaction data in high volumes and in multiple applications; the ability to down-line load or to reprogram the wagering terminals from the central computer installation via the communications network; a high degree of security and redundancy to guard against unauthorized access and tampering and to ensure fault tolerant operation without data loss, and a comprehensive management information and control system.

The Company's principal competition includes Gtech Holdings Corporation, International Game Technology, Scientific Games, Essnet, Wincor-Nixdorf, KEBA, GesmbH & Co., ETI and Spielo.

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The data included within the Financial section is solely for information and does not construe a recommendation and/or endorsement by IGHRM or its members to invest funds with any of the companies listed. You are strongly advised to obtain professional advice with qualified individuals or corporations for any investments of funds.

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