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TABLE OF CONTENTS
BALLY TECHNOLOGIES, INC. INDEX TO FINANCIAL INFORMATION

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

ý	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 2013
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                           to                            

Commission File Number 001-31558

BALLY TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)

NEVADA
(State or other jurisdiction of
incorporation or organization) 88-0104066
(I.R.S. Employer
Identification No.)

6601 S. Bermuda Rd. Las Vegas, Nevada 89119
(Address of principal executive offices)

(702) 584-7700
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each Exchange on which registered
Common Stock, $0.10 par value per share	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:
None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ý Yes    o No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. o Yes    ý No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ý Yes    o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ý Yes    o No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act). (Check one):

ý Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes    ý No

The aggregate market value of the common stock, $0.10 par value, held by non-affiliates of the registrant, computed based on the closing sale price as of December 31, 2012 of $44.71 per share as reported by the New York Stock Exchange, was approximately $1,799,000,000.

According to the records of the registrant's registrar and transfer agent, the number of shares of the registrant's common stock outstanding as of August 20, 2013 was 38,890,000, which does not include 26,474,000 shares held in treasury.

Documents Incorporated by Reference:    Portions of the registrant's Definitive Proxy Statement to be filed with the Securities and Exchange Commission no later than 120 days after the end of the registrant's fiscal year ended June 30, 2013, are incorporated by reference in Part III of this Annual Report on Form 10-K.

TABLE OF CONTENTS

		Page
PART I
Item 1.	Business	1
Item 1A.	Risk Factors	17
Item 1B.	Unresolved Staff Comments	30
Item 2.	Properties	30
Item 3.	Legal Proceedings	31
Item 4.	Mine Safety Disclosures	31
PART II
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	32
Item 6.	Selected Financial Data	35
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	37
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	55
Item 8.	Financial Statements and Supplementary Data	56
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	56
Item 9A.	Controls and Procedures	56
Item 9B.	Other Information	57
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	58
Item 11.	Executive Compensation	58
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	58
Item 13.	Certain Relationships and Related Transactions, and Director Independence	58
Item 14.	Principal Accounting Fees and Services	58
PART IV
Item 15.	Exhibits and Financial Statement Schedules	59

BALLY TECHNOLOGIES, INC.
FORM 10-K
Year Ended June 30, 2013

Forward Looking Statements

Certain statements made or incorporated by reference in this Annual Report on Form 10-K, in our other filings with the Securities and Exchange Commission ("SEC"), in our press releases and in statements made by or with the approval of authorized personnel constitute "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and are subject to the safe harbor created thereby. Forward looking statements reflect our intent, belief or current expectations with respect to, among other things, future events and financial trends affecting us. Forward looking statements are typically identified by words such as "believes," "estimates," "expects," "anticipates," "plans," "should," "would" and similar expressions.

Although we believe the expectations reflected in any forward looking statements are reasonable, readers are cautioned that forward looking statements involve known and unknown risks and uncertainties, are not guarantees of future performance and that actual results, performance or achievements may differ materially from any future results, performance or achievements expressed or implied by such forward looking statements. These differences can arise as a result of a number of risks, including those described in Item 1A, Risk Factors.

Forward looking statements in this Annual Report on Form 10-K speak only as of the date hereof, and forward looking statements in documents incorporated by reference speak only as of the date of those documents. Unless otherwise required by law, we undertake no obligation to publicly update or revise these forward looking statements, whether as a result of new information, future events or otherwise. In light of these risks and uncertainties, we cannot ensure that the forward looking statements contained in this Annual Report on Form 10-K will, in fact, transpire.

Unless the context requires otherwise, the terms "Bally," the "Company," "we" and "our" as used in this Annual Report on Form 10-K refer to Bally Technologies, Inc. and its subsidiaries.

PART I

ITEM 1.    BUSINESS

General

Bally Technologies, Inc. is a diversified global gaming company that designs, manufactures, operates, and distributes advanced technology-based gaming devices, systems, server-based solutions, custom mobile applications, and interactive applications. Our innovations and technology solutions allow our customers to more effectively manage their operations using our wide range of marketing, data management and analysis, accounting, player tracking, security, and other software applications and tools. We also provide hardware, including spinning-reel and video gaming devices, specialty gaming devices, and wide-area progressive ("WAP") systems. We support customers that include traditional land-based, riverboat, and Native American casinos, video lottery and central determination markets.

We were founded in Chicago, Illinois in 1932 as Bally Manufacturing Corp. The Company was incorporated in Nevada on September 30, 1968, under the name Advanced Patent Technologies. Following two other name changes, we became Alliance Gaming Corporation on December 19, 1994, and on March 6, 2006, we changed our name to Bally Technologies, Inc. Our principal executive offices are located at 6601 South Bermuda Road, Las Vegas, Nevada 89119; telephone (702) 584-7700. Our website is www.BallyTech.com. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and all amendments to those filings are available on

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our website, free of charge, as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC.

Company and Product Overview

We derive our revenue from the following:

	Year Ended June 30,
	2013				2012				2011
	(dollars in millions)
Gaming Equipment	$	339.8	34	%	$	310.7	35	%	$	246.6	33	%
Gaming Operations		405.0	41	%		357.4	41	%		318.6	42	%
Systems		252.2	25	%		211.7	24	%		193.0	25	%
	$	997.0	100	%	$	879.8	100	%	$	758.2	100	%

• Gaming Equipment	—	Sale of gaming devices and related equipment, parts and conversion kits;
• Gaming Operations	—	Operation of linked progressive systems, video lottery and centrally determined systems, and the rental of gaming devices and content; and
• Systems	—	Sale and support of specialized systems-based software, hardware and interactive products and related recurring maintenance revenue.

Our gaming equipment, gaming operations, and systems product lines have increasingly converged with the proliferation of high-speed networks. Key innovation drivers in our industry are Ethernet-based gaming floors, downloadable and server-based games and applications, and open protocols and common industry standards in game and system development, such as Gaming Standard Association ("GSA") protocols. Players benefit from these advances by gaining more exciting experiences, better communication from casino owners, and superior customer service from gaming operators. Our customers benefit through operational efficiencies that can increase their profits and streamline their operations as well as new ways to drive excitement and play on the casino floor through the ability to do systems-based floor-wide promotions and slot tournaments.

The Bally Innovation Lab leads initiatives for new and emerging technologies. This research and development ("R&D") lab focuses on emerging technologies to produce our new products and enhanced features. Its mission is to accelerate the commercial deployment of the most cutting-edge, technology-based gaming devices, content, and systems on the market.

We focus on the convergence of games and systems in five key ways:

•

Backward compatibility.  The majority of our latest systems, as well as and network-and server-based solutions, are designed to work on most existing gaming devices.

•

Pro Series™ cabinets with ALPHA 2™ technology.  Our newest cabinets feature a library of game content, a support network, and server-based applications.

•

iVIEW™ and iVIEW Display Manager ("DM")™.  In-game picture-in-picture style technology supports an array of network and server-based applications designed to add excitement and interactivity on the gaming floor.

•

Elite Bonusing Suite™.  A library of systems-based bonusing applications for use on the iVIEW and iVIEW DM in-game player-user-interface, offers similar game content and some of the same play mechanics utilized by our gaming-device content, but for floor-wide, secondary bonusing events.

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•

Bally Command Center™.  This powerful, server-based solution lets users download game content, iVIEW DM content and events, and peripheral updates at the touch of a button, dramatically increasing operating efficiency and enabling gaming operators to respond rapidly to the current business environment.

A gaming device consists of three elements:

•

Cabinet hardware—the outside presentation cabinetry that houses the operating system and content software. This is how players interact with games.

•

Operating system, or platform—a set of software programs inside the gaming cabinet hardware that regulate how the game application software programs utilize the hardware. It acts as an intermediary between application programs, the content, and the hardware.

•

Content—individual game titles and features. Content drives the gaming experience for players.

Gaming devices are differentiated by a number of factors, such as game theme and layout, play mechanics, cabinet style, pay table, betting denomination, and minimum/maximum betting amount. We believe that the key to gaining market share is coupling superior customer service with leading-edge gaming cabinet hardware, content, and networks that offer high entertainment value and key operational advantages.

Game Cabinet Hardware

Our commitment to being a leader in technology is evident in our game cabinet hardware. Substantial efforts in product development, including internal, customer and end-player testing, has produced a variety of cabinet styles that house innovative features and layouts in both spinning-reel and video formats. The goal of our hardware development efforts is to maximize player appeal, product reliability, component commonality, and ease of maintenance. To that end, we dedicate hardware development resources to innovations in cabinet style, technical capability, controller circuit board design and programming, as well as user-interface devices such as card readers, keypads, button decks, and displays. We created a modular, extendible hardware and software architecture to help developers achieve greater efficiency, functionality and reliability. Development cycles can range from a few months for minor revisions, to more than a year for major design changes.

Pro Series Cabinets

We introduced the Pro Series cabinets, our latest generation design, in June 2010. Prior to the introduction of the Pro Series we marketed our cabinets under our ALPHA Elite™ brand. The Pro Series is currently available in upright, slant, spinning-reel, Curve, V32, V22/32, V22/42, and the soon to be released Pro Wave with a unique 40-inch curved touchscreen monitor. They come with groundbreaking features such as the touch-screen, iDeck™, which replaces a standard button deck; custom, four-speaker high-definition ("HD") surround-sound stereo, designed to cut through noisy casino environments and target sound to the player; exterior lighting and a super candle light crowning the game, both synchronized to game play; a shared single entry for currency, tickets, and cash-outs; a 15-inch Pro Series digital topper with game-synchronized LCD video display; and vertically opening doors that make it easier to service games without interrupting adjacent games. We can configure the top-box in Pro Series cabinets in a variety of ways including with upright wheel, as a hammerhead with an oversized 32-inch cinematic display, using the commanding digital ladder 32-inch HD video display, and the soon to be released 42-inch vertical display.

The Pro Curve Upright, which emulates a spinning-reel cabinet, but is actually a video slot machine with a curved LCD display, features a breakthrough video-reel technology. A 20-inch LCD display, curved just like physical reels, delivers a realistic spinning-reel experience in a video slot. The reels

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look, feel, and play like traditional reels, but are actually video screens, and are an ideal solution for video-only jurisdictions that want to offer their customers a traditional spinning-reel experience.

Game Platform

Each gaming device requires a game platform to manage the device hardware and deliver the game content. Changes in technology, consumer demand, capacity, security, and regulations, among other factors, drive innovations in game play. We update our game platforms and the related computer systems to keep pace with the ever-increasing complexity of current game-play requirements.

We currently support two gaming platforms; the ALPHA and the ALPHA 2. Launched in June 2010, the ALPHA 2 builds on the success, and reliability of the original ALPHA platform. ALPHA and ALPHA 2 were designed to support industry protocols, as well as various kinds of game bonuses and multi-denomination, multi-game and multi-pay table game configurations. It can operate with stand-alone, local, and wide-area progressive products.

The ALPHA 2 platform incorporated all the attributes of ALPHA, which featured a layered architecture and modular design, allowing for adaptability and simplified requirement changes, while adding significantly faster and richer features, such as an INTEL® Core™ 2 processor; four gigabytes of dual-channel memory; Realtek™ HD audio; and leading video technology. This powerful platform enables dramatic new levels of interactivity, visual quality, and performance. The result is a more compelling gaming experience for players, including three-dimensional ("3D") graphics and animations. ALPHA 2 supports both existing and new game content, as well as network and server-based applications. It is operable with the Bally Command Center, discussed in detail below, which enables downloadable access to our game content via a central server. While transitioning to ALPHA 2 as our standard game platform for the majority of our game cabinets, we will continue to support the ALPHA platform.

Game Development and Game Content

We have decades of experience developing entertainment content for gaming operators, video lottery, and central-determination markets around the globe. Our game content features original themes, licensed themes using well-known brands, and adaptations of well-known Bally brands such as Cash Spin™, Hot Shot®, Quick Hit™, and Blazing 7s™ that can be found on most casino floors in North America and in many international markets. We have deployed our game content across wide-area progressive, local-area, and near-area progressive slots, spinning-reel and video gaming devices, specialty gaming devices, and multi-suite games. Our game-development teams cover the globe, with centers in Arizona, California, Nevada, Australia, and India. This diversification enables us to meet the demands of the markets in which we do business and develop market-specific game content.

The software development process for new game content, including graphics development, is continuous and requires a significant commitment of human resources. Creativity in software development is a key element in the market success and player appeal of our game content and gaming devices. Innovations in our development process and game design are generated internally and with the support of customers, and third parties, many of whom have entered into strategic relationships with us. Additionally, we have partnered with several internationally known brands, such as NASCAR, Pawn Stars, Michael Jackson, GREASE, Betty Boop, and the Playboy franchise.

We continue to add more entertaining, interactive, and complex play mechanics to our games, including features such as locking hot zone, free games with additional multipliers, rolling wilds, memory pay, multi-level progressives, free games, bonus bets, bonus spins, stacked wilds, mystery progressives, locked symbol bonuses, second-chance features, asset giveaways, multi-player, community play, U-Spin™ player interaction, random bonus features, and the new arcade-like play mechanic which enables players to touch and roll balls on the game screen in our new SKEE-BALL® video slot.

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Our game developers are also focused on developing highly interactive content for the iDeck touch-screen button deck, making it another interactive channel and display on the gaming device. The iDeck content is often synchronized with game play, adding even more entertainment and interaction to the player experience.

Game Parts and Conversion Kits

Our gaming device customers typically purchase replacement parts, upgrades, game conversion kits, and other products from us to keep the devices in good working order and enhance their underlying performance. Certain equipment within gaming devices, such as video monitors, bill validators, logic boards, and printers, may also be replaced as a result of wear and tear or new technology offerings by our suppliers. These sales may also include game conversion kits that provide our customers the opportunity to offer a new game theme or variant on the existing product without the necessity of purchasing a new gaming device. Our Pro Series cabinets, with their all-digital displays and iDeck digital, configurable touch-screen button deck, make game conversions easy and cost-effective for casino operators as they do not have to change the button configuration or replace game glass.

Maintenance, Trade, and Resale Market

We generally offer a 90-day parts, labor, and performance warranty/guarantee for new gaming devices. We provide several after-sale services to our customers, including customer education programs, a 24-hour customer service telephone hotline, a website for technical support, field service-support programs, and spare parts programs. Our historical warranty expense as a percentage of revenues has been less than 1 percent.

From time to time, we also sell used gaming devices, including products made by us as well as those produced by our competitors. Generally, we acquire used devices as trade-ins toward the purchase of new gaming devices. While there is a small secondary market for used devices in the U.S., they are typically resold in international markets where new device purchases may be too costly. Where appropriate, we incur costs to recondition used devices for resale or we may elect to destroy and recycle materials whenever possible.

Gaming Operations

We understand that each customer has its own particular needs based on its business and market. Through our Gaming Operations, we offer gaming operators a wide range of rental (also known as participation or recurring revenue) options for our gaming devices and content. Operating gaming devices under a rental arrangement often requires us to invest significant capital in manufacturing the gaming device and related equipment, purchasing signs and seating, and, in certain cases, acquiring intellectual property rights. These rental devices are available as linked progressive systems, rental and daily-fee games, video lottery systems, and centrally determined systems.

Linked Progressive Systems

We offer our customers gaming devices featuring a common jackpot or prize award that can be linked (within a casino, in a local-area network, or among multiple casinos within a market or jurisdiction) in a wide-area network. We typically offer progressive gaming devices to customers under a daily-fee arrangement based on a percentage of the money wagered on the participating gaming devices. In many cases, we use a portion of these revenues to fund the ultimate payment of the jackpot awards. We market our linked progressive systems under titles such as 1,000,000 Degrees™, Golden Pharaoh™, Betty Boop's Love Meter™, Money Vault™, Instant Fortune™, Ultimate Tower of Power™, and Quarter Million$s Tower of Power™. In fiscal year 2012, we introduced our new Cash Connection™ WAP and continue to add identifiable brands as well as in-house brands to the Cash Connection WAP, inclusive

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of Michael Jackson King of Pop™, NASCAR®, Betty Boop's Fortune Teller™, GREASE™, Hot Shot Progressive Dual Wheel™ and Cash Spin Jackpot™. As of June 30, 2013, we had a total of 2,463 linked progressive systems.

Rental and Daily-Fee Games

We offer a variety of non-linked games and content on a rental basis for either a fixed daily fee or a fee based on the percentage of the net win generated by the gaming device. Many of the games we market and offer under WAP are also made available on a flat-fee near-area progressives ("NAP") included in this category. This category includes both gaming devices in which we retain ownership and charge a daily fee for the use of the gaming device, and gaming devices our customers purchase which are classified as game sales revenue. Gaming devices in which we retain ownership and charge a daily fee include rental and maintenance of the gaming device and licensing of the game content. For gaming devices our customers purchase, we provide the game content under a usage-fee arrangement that results in a lower daily-fee than leasing the entire gaming device. We market our rental and daily-fee games under titles including Money Talks™, Money Wheel™, Vegas Hits Roadtrip™, Cash Spin, Hot Spin™, Vegas Hits™, Cash Wizard™, Cash Wizard Tiki Magic, Ultimate Tower of Power, Hot Shot Progressive Cash Wheel™, Fireball™, 77777 Jackpot™, Reel Money™, Hot Shot Progressive®, Quick Hit Platinum™, Reel Winners™, Hee Haw®^, and Monte Carlo™, among others. As of June 30, 2013, we had a total installed base of rental and daily fee games of 14,855 units.

Video Lottery Systems

We offer video and spinning-reel devices that can operate either as stand-alone devices or as units that interact with (or can be monitored by) a central system maintained by government agencies. The financial model for this market requires us to build, deploy, and maintain the devices, along with providing the related equipment in return for a share of the net win generated by the device for a contractually fixed period of time.

Through a competitive bidding process, we, and prior to our acquisition thereof in March 2004, Sierra Design Group ("SDG"), were each awarded approximately 25 percent of the initial New York State Lottery ("NYSL") terminals to be installed at horseracing facilities throughout the state. As of June 30, 2013, we earned recurring revenue from our installed base of 8,908 video lottery devices and 646 electronic table games operated by NYSL. We also earn recurring revenues from 1,236 video lottery devices deployed at horseracing and other gaming facilities under agreements with the Delaware State Lottery Commission, 1,175 video lottery devices and 81 electronic table games deployed at Maryland State Lottery Commission locations, and 527 video lottery devices located in Italy.

Centrally Determined Systems

We offer video and spinning-reel devices that connect to a central server, which determines the outcome of the games. These systems primarily operate in Native American casinos in Washington, Oklahoma, and Florida, as well as Mexico. In some of these jurisdictions, our customers purchase our gaming devices and we classify the purchases as game sales revenues. In other jurisdictions, our customers rent the gaming device and we classify the rental payments as gaming operations revenues. In each case, for the use of our central determination software, we receive either a fixed daily fee or a percentage of the net win generated by the devices connected to the system. As of June 30, 2013, the total installed base of gaming devices connected to our centrally determined systems totaled 35,284. The installed base of centrally determined systems has declined over the past two fiscal years as certain customers have upgraded these systems to utilize more sophisticated player tracking, bonus and marketing applications, and are now covered under systems maintenance.

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In December 2005, we began selling centrally determined gaming devices in Mexico. In that market, we sell gaming devices for an upfront fee, and classify the purchases as game sales revenues. We also derive a daily fee equal to a percentage of the net win for providing a system network, gaming content, and monitoring, maintenance and consulting. As of June 30, 2013, 8,829 of the total installed base of gaming devices connected to our centrally determined systems were deployed in Mexico. Included in the total installed base of centrally determined games in Mexico are 5,510 iVIEW in-game player-communication units installed in non-Bally games, in which we charge a system connection fee. The total installed base of centrally determined games noted above includes the iVIEW units in Mexico.

System Solutions

We offer core, industry-leading slot, casino and table management systems (collectively, "casino management systems") that help our customers improve communication with players, add excitement to the gaming floor, and enhance operating efficiencies through greater automation, reporting, and business intelligence. Our comprehensive suite of cutting-edge technology solutions provides gaming operations of every size with a wide range of marketing, data management and analysis, accounting, player tracking, security, and other software applications and tools to more effectively manage their operations. We also provide technologies to deploy a networked, server-based gaming environment, complete with a command center solution for centralized management and control.

Our systems have evolved in recent years as we have taken significant steps to improve our casino management systems offerings, releasing a powerful new platform re-engineered to game-changing technology levels. This new core system platform provides gaming operators with easy-to-use graphical interfaces; vertical and horizontal scalability; state-of-the-art distributed architectures; and support for multiple languages and currencies.

Today, there are more than 350 casinos that have installed Version 11 and Version 12 of our new core system platform. The improvements in our core systems platforms resulted in a reliable and scalable foundation of slot, casino and table management systems. This solid, world-class core infrastructure and a unified strategic product roadmap have enabled us to implement new and innovative solutions for marketing, bonusing, and server-based gaming. We offer several innovative products on our new system platform including new bonusing applications within our Elite Bonusing Suite; predictive analytics within our Bally Business Intelligence™; and intelligent way-finding within Bally CoolSign®.

Over the past several years, gaming content and systems applications have merged into a single gaming-floor network architecture. In response, the functionality of our systems has evolved from basic automation of manual activities to highly integrated applications. Using our systems, gaming operators gain useful features such as active, real-time monitoring tools for gaming devices, tools to collect and manage customer data, security to protect against theft and data loss, the ability to track and reward players, and marketing programs to enhance the gaming experience.

As the gaming industry continues to evolve, some operators have embraced new server-based and high-speed network technology. Many have opened new operations that employ high-speed Ethernet connections on their floors, and many others are upgrading to high-speed networks. We partner with our customers to help them add network and server-based solutions to their existing systems, whether on a floor-wide basis, in smaller sections of the floor, or on selected banks of games. Once installed, these solutions increase efficiency and labor savings. More importantly, they provide operators with new and more efficient ways to communicate with their players. By marketing at the point-of-play and delivering floor-wide tournaments, bonusing events, and second-way-to-win games, operators increase their return on investment and create even more excitement for players across the gaming floor.

We believe we are the only provider in the industry that offers such a wide selection of technology platform options to its customers. There are more than 450,000 gaming connections to our Systems at more than 650 locations around the world.

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Our Systems business comprises three key facets:

•

Hardware, including our iVIEW and iVIEW Display Manager (DM) player-user-interface devices and specialized system-based products. Over the last two fiscal years, hardware sales have accounted for approximately 30 percent of Systems revenue;

•

Software and services, including licenses of our core systems and suite of player tracking, bonusing, and marketing applications and customized system solutions. Over the last two fiscal years, sales of software and services accounted for approximately 34 percent of Systems revenue;

•

Maintenance, providing access to future enhancements or upgrades to the system software for a fee based on a percent of the license fee. Over the last two fiscal years, ongoing maintenance fees accounted for approximately 36 percent of Systems revenue.

Casino Management Systems

The various system-based hardware and software products in our casino management systems offer gaming operators many benefits including: player-loyalty solutions that are comparable to frequent guest programs found in other leisure and retail industries; database marketing and table-game accounting solutions including the calculation of all revenue and expense-related items; and cage and credit accountability for all extensions of cage and credit cash balancing functions. We designed and deployed these systems in both domestic and international markets so that they would be and adaptable to foreign languages and currencies.

Our solutions, which support GSA protocols, operate on common platforms such as Windows ®, AS/400 (iSeries®), Linux, and UNIX. By supporting these platforms, we allow our customers to choose a technology solution that meets their existing or future infrastructure requirements.

We design our slot-management systems with features for handling slot monitoring, accounting, and operations, as well as bonusing, sweepstakes, promotions, cashless transfer, ticketing, jackpots, promotional coupons, redemptions, and soft count. Our TableView real-time table-rating and player-tracking solution takes automated management of table-game activities directly to the casino pit with a high-tech touch screen.

The Bally Business Intelligence applications, which span across all our casino management systems, bring state-of-the-art data analytics to a gaming operator's key executive and marketing-management teams. Executive dashboards, slot floor data, and transaction visualization, empower gaming operators to analyze customer activity and make quick decisions about products, floor layouts, and marketing programs that can significantly enhance revenue and profits.

iVIEW Player-Communication Network

Our server-based iVIEW network serves as a way to communicate with players directly at the point-of-play. This network allows gaming operators to present messages in a split or full screen format on the main game display of any touch-screen- equipped gaming device without interrupting traditional game play. We created picture-in-picture-style technology, using an LCD screen and accompanying hardware and software that reside in the gaming device, for the iVIEW DM player-user-interface (also operating on the iVIEW network).

Our iVIEW network also works with our Bally Command Center for server-based download of content, our Elite Bonusing Suite of floor-wide bonusing applications, our Bally CoolSign media management solution, and other new technologies under development. iVIEW and iVIEW DM work on almost any manufacturers' gaming devices that have a touch screen and are backward and forward compatible, so they protect operators' invested capital.

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The iVIEW DM solution, with all its capabilities, is especially effective for marketing to players at the point of play. This picture-in-picture-style technology facilitates enhanced communication and customer-service functions such as beverage service, floor mapping, and real-time perishable promotions without interrupting game play. iVIEW DM can also be used to create excitement on the casino floor with floor-wide bonusing events; game-in-games; second-chance-to-win games; floor-wide slot tournaments; interactive virtual racing events; time-based promotions; targeted, customized player messaging; and bonuses on birthdays, anniversaries and holidays. iVIEW and iVIEW DM can even work in conjunction with the casino's player data to offer customized content based on gender, age, and provide player preferences.

We can implement iVIEW DM across entire gaming floors, in smaller sections of floors, or bank-by-bank based on casino operator preference and capital budgets.

Elite Bonusing Suite

The Elite Bonusing Suite gives our customers a way to reward their patrons right at the point-of-play via the iVIEW network. This technology retains current players, attracts new ones, and increases player value. Bonusing applications on the Elite Bonusing Suite server allow operators to tailor and automate promotions using server-based applications such as Virtual Racing™, DM Tournaments™, U-Spin Bonusing™, Power Winners™, Dynamic Random Bonusing™, Video Poker Bonusing™, iVIEW Messaging™, Flex Rewards™, and Lucky Match Bonusing™.

Bally CoolSign Media Management Solution

We believe Bally CoolSign is the gaming industry's leading gaming-centric media-management tool that enables gaming promotions and/or gaming information, triggered through any of our products, to be displayed onto any digital display in the casino resort or the casino enterprise. Through digital signage that integrates with lighting and sound systems, CoolSign adds excitement to the casino floor and across the casino resort, even extending to compatible outdoor displays.

Casinos that offer the iVIEW, iVIEW DM, and CoolSign products often use these products in concert to create powerful, floor-wide virtual-racing, slot tournaments, and player-bonusing events so their patrons can fully experience the action and excitement not only on the gaming device, but on large media displays throughout the casino resort.

Bally Command Center

Our server-based command center enables gaming operators to download marketing content on iVIEW and iVIEW DM displays. They can also configure gaming device pay tables and game play options, deliver new game content and game libraries, and perform updates of game firmware such as ticket printers and bill acceptors in a matter of minutes via a central server, rather than having to implement updates on each device.

Systems-Delivered Floor-Wide Player Engagement and Bonusing Events

Casino operators consistently face the challenge of coming up with creative ways to attract and retain players, generate additional revenue, and increase retention rates. To overcome these challenges, casinos are using technology to change the player experience in their properties by communicating marketing promotions and special events to players directly on the game screen across banks of games, in sections of the casino, and even across the floor.

Using a combination of our iVIEW DM picture-in-picture player-user-interface and the Elite Bonusing Suite innovations, casino are creating exciting tournaments and special promotional events on demand to enhance the player experience and to build player loyalty. Casinos are enhancing the player

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experience using community floor-wide events through the Elite Bonusing Suite's Virtual Racing application to promote excitement and participation across the casino floor. Using the DM Tournaments' application, casinos are staging their tournaments as group or individual start events, and converting their games to regular-play mode in a matter of minutes. This flexibility allows operators to identify what machines will be placed in tournament mode and instead of physically having tournament machines on standby, any bank of machines or any individual machine on the gaming floor can become a tournament game almost instantaneously.

This backward-compatible player-centric bonusing technology supports multiple manufacturers' games with a touch-screen display. As a result, all players across properties can now have the same game experience no matter which manufacturer's machine they are playing. Beginning in fiscal year 2012, we partnered with casino operators hosting several Elite Bonusing Suite floor-wide player engagement and bonusing events. Each of these events not only increased return-on-investment and property exposure, but they also generated large crowds of players and helped to build and attain player loyalty without interrupting game play.

Interactive Solutions

Bally Interactive encompasses our mobile and online initiatives and related product offerings that provide operators a variety of solutions designed to help develop, deploy, and manage their interactive presence, or enhance their existing presence if already in place. By offering mobile and online play-for-free and wager-based gaming products, we expect to integrate our cross-platform solutions with core casino patron, slot-management, and business-intelligence systems. This "single view of the player" will give casino operators enterprise-wide analytics and the ability to employ multi-channel promotions and bonusing to patrons on the casino floor, at home, or on the move.

Online

Our online solutions are designed to enable casino operators the ability to offer players a complete online gaming experience through our iGaming Platform and Remote Gaming Server—whether it be play-for-free or wager-based gaming products on computers or mobile devices. Our open, cloud-based iGaming Platform enables operators to choose "best-in-class" poker, slot, table, and other gaming content from various providers. This content is delivered via our Remote Gaming Server, allowing access to the entire library of games and one-time integration. Our Remote Gaming Server in Europe is currently operating on 8 portals and 16 sites. We were the first in the United States to be awarded an online gaming license in the State of Nevada in June 2012 and have also received numerous online gaming licenses in other domestic and foreign jurisdictions.

Mobile

We offer or have created mobile apps and mobile websites for dozens of casinos around the world. Our apps are designed as casino "concierge" apps, providing operators the opportunity to attract new players, enhance their patrons' casino resort visit, and sell more to them via their phones or mobile tablets. Apps can include popular casino games, player's club sign-up and account information, hyper-targeted offers, show previews, room and restaurant bookings, feedback surveys, menus, interactive maps, and many other features. Utilizing our cloud-based mobile technology platform, casinos can manage their entire portfolio of mobile websites and native apps for iPhone®, iPad®, Android™ phone, Android™ tablet, BlackBerry®, and other devices from a single content management system.

Research and Development

Our R&D activities are directed toward the development of world-class games and systems technologies, continually evolving our product line. In addition, we devote R&D resources to

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researching future technologies and products. Due to our customer-centric nature, we also focus on custom development of applications and solutions for gaming operators. Often, these solutions become part of our general product portfolio.

Our R&D is far-reaching in scope, with major centers in Las Vegas and Reno, Nevada, and Bangalore and Chennai, India; and smaller centers in Nice, France and throughout North America. Various business groups across the globe execute our R&D initiatives, and we believe this decentralized approach enables us to more easily recruit and retain top talent to develop games and systems specific to each market. We centrally manage key cross-business group product initiatives to prioritize and align our R&D activities across these teams. In addition, we may augment our R&D initiatives through third-party development agreements with outside companies, or by entering into agreements with companies that have similar areas of focus.

Our total expenditures for R&D were $111.1 million, $96.2 million, and $88.1 million during the years ended June 30, 2013, 2012 and 2011, respectively, and has remained relatively consistent as a percentage of revenues during such periods. Our R&D expenditures over this three-year period reflect our corporate focus on our technology assets, the expansion of technical resources, and the competitive landscape that requires continuous development of future generations of gaming products and systems.

Sales and Marketing

Our direct sales force consists of approximately 60 employees located in multiple offices, primarily in North America. To a lesser extent, we also employ an independent distributor network to distribute our products. The agreements we have with distributors generally specify minimum purchases and provide that we may terminate the relationship if certain performance standards are not met.

We sell gaming devices throughout our fiscal year, and contracts may be for anything from a small quantity of units to several thousand. We conduct one-on-one meetings with our customers to demonstrate our products at their locations, host customers at private demonstrations in our offices or at offsite venues, and participate in a number of trade shows and conferences domestically and internationally each year. In certain cases, we respond to competitive requests for proposal from private and public entities seeking to purchase gaming equipment.

For casino enterprise system sales, we give our customers the option of signing separate hardware and software maintenance agreements at the time of sale. Typically, these agreements are for one-year terms and automatically renew unless canceled in writing by either party. After an initial warranty period, usually 90 days, we invoice customers monthly for hardware and software maintenance fees that provide for, among other things, repair or replacement of malfunctioning hardware, software version upgrades, and on-call support for software.

Often, the sale of enterprise systems is a long process, at times extending beyond one year. A potential systems customer usually will conduct a formal evaluation and selection of a vendor. The level of sales available to us at any time can vary materially due to a number of factors, including the capital budgets of our customers, availability of new product modules, timing associated with regulatory approvals, and the success and features contained in the products sold by our competitors. The price paid for a full system also can vary materially from customer to customer depending on factors, such as the size of the gaming operation and the complexity and number of functions contained in the system specified.

Global Marketing

Our global marketing program is designed to support our sales team providing branding, public relations, promotions, product marketing, and extensive market-research activities.

We build brand awareness and generate demand through our own direct marketing as well as co-marketing programs with our casino customers. We direct market through print, e-mail, and

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web-based advertising, as well as media relations, industry trade shows, conferences, and events, and gaming industry and player/consumer communications. We primarily target business audiences focusing on heightened awareness of and demand for our games and systems solutions.

We currently have 24 dedicated marketing team members, who conduct casino-operator and player research, and provide pre and post-product launch support, as well as corporate marketing support in the areas of internal and external communications, community relations, marketing events, international marketing, and graphic design. Over the past several years we have significantly increased our use of focus groups to support product development. These focus groups are an important tool for acquiring feedback on new and not-yet-released products before they are broadly released to the market; they allow us to make customer-driven improvements to products before we invest in widespread product releases.

Discontinued Operations

The Rainbow Casino, located in Vicksburg, Mississippi, began operations in July 1994. On June 8, 2010, we sold the Rainbow Casino for approximately $80.0 million in an all-cash transaction.

Product Markets

We believe that the total base of installed gaming devices in North America is approximately 987,000 units, with approximately 887,000 units in the U.S. alone. This total includes land-based, riverboat, and Native American casinos, as well as video lottery markets. Replacement of existing units, new casino openings or expansions, and the legalization of gaming in new markets are primary drivers of new sales opportunities for gaming devices in the U.S. and Canada. The gaming industry also continues to expand in international markets. Currently, our primary international markets are Europe, Latin America, South America, Mexico, and Asia-Pacific. We regularly evaluate opportunities to expand our business into additional international markets, examining the risks involved such as those described in Item 1A, Risk Factors.

We distribute our gaming devices through direct sales efforts and a small number of distribution arrangements. Staff conducts our international business primarily from offices in Amsterdam, Netherlands for customers in Europe; Puerto Rico for customers in the Caribbean and Latin America; Buenos Aires, Argentina for customers in South America; Mexico City for customers in Mexico; Macau, China for customers in Asia-Pacific; Sydney, Australia for customers in Australia and New Zealand; and Boksburg, South Africa for customers in South Africa.

The primary markets for casino enterprise systems are the U.S. and, to a lesser extent, Canada, South America, Europe, the Pacific Rim and the Caribbean/Latin America, but new international markets are constantly emerging. New casino openings, expansions, upgrades of existing facilities, and the competitive replacement of other systems overseas are increasing the market for casino enterprise systems across the globe. We also generate new system sales through the introduction of innovative hardware and software products. In many cases, domestic regulations require the implementation of a system as part of a customer's operational requirements; yet, international markets have only recently begun the full implementation of such systems. We believe, as these markets mature and grow more competitive, the use of systems will become more common.

Competition and Product Demand

The demand for gaming devices, content, and systems varies depending on the level of new construction and renovation of casinos as well as market and legislative conditions that might generate the need for new and replacement equipment and product innovation. For the year ended June 30, 2013, our 10 largest customers, including customers with multiple casino properties, accounted for approximately 25% of gaming device sales.

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Regulatory requirements in each applicable jurisdiction drive the demand for casino enterprise systems, as do gaming operators' needs to properly track device and player activity, and to establish and compile individual device and player profitability and other demographic information to stay competitive. These capabilities enable casinos to develop or enhance marketing strategies. As more and more gaming operators move to high-speed networked floors, we expect the demand for new systems technologies to increase. Customers will replace older systems with new network and server-based systems solutions that enable activities such as centralized management and floor-wide events and tournaments on each gaming device. We derive revenues for casino enterprise systems from selling products to new and existing customers. For the year ended June 30, 2013, the 10 largest casino enterprise system customers, that include certain multi-site operators, accounted for approximately 47% of systems revenues, with the largest customer accounting for 9% of these revenues.

We compete with a number of domestic and international businesses in the geographic markets where we operate. Our ability to compete effectively depends on a number of factors including our product quality and depth, pricing, financing terms, regulatory approvals, the successful development and protection of intellectual property, and the success of our distribution, sales and service levels.

In the gaming device market, our competitors currently include Ainsworth Game Technology Ltd., Aristocrat Leisure Limited ("Aristocrat"), Aruze Gaming America, Inc., GTECH Holdings Corporation ("GTECH"), International Game Technology ("IGT"), Konami Co. Ltd. ("Konami"), Multimedia Games, Inc. ("MGAM"), Novomatic AG, Recreativos Franco, S.A., Unidesa Gaming and Systems, and WMS Industries, Inc. ("WMS").

The competition for casino enterprise systems is also significant. Product feature and functionality, accuracy, reliability, service level and pricing are among the factors that determine how successful providers are in selling their systems. Our principal competition in casino enterprise systems currently includes Aristocrat, IGT, Konami and several smaller providers in the international market. Competition is intense in this market due to the number of providers and the limited number of casinos and jurisdictions in which they operate.

Global Headquarters, Technology Campuses, Manufacturing and Assembly Operations

Global Headquarters

Our global headquarters is located in Las Vegas, Nevada at 6601 South Bermuda Road. Our approximately150,000 square foot facility is used for corporate administrative functions as well as to accommodate the design, assembly and distribution of gaming equipment and casino management systems' hardware and to meet product design demands and varying levels of volume requirements.

Las Vegas and Reno Technology Campus

We lease an additional 36,000 square feet of office space next door to our global headquarters facility in Las Vegas for a Technology Campus for our game development, advanced development, and project management teams. In addition, we lease approximately 83,000 square feet in Reno, Nevada, which provides a larger campus-style environment that accommodates the growth of our game development, system development, product management, and administrative functions in northern Nevada.

Bally Innovation Lab

Our global Innovation Lab is located in Pleasanton, California, a major suburb of San Francisco. This allows us to draw from the significant high-tech talent that resides in the Silicon Valley. In our Innovation Lab, a team of employees focus on researching and developing new gaming technologies, products, and the rapidly growing area of server-based systems gaming. The Innovation Lab capitalizes

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on our R&D talent across the globe and is dedicated to developing, testing, and deploying the newest technology.

Manufacturing and Assembly

Our assembly operations have common hardware components that provide greater flexibility in our assembly operations where each product family can be produced by an expanded set of assembly lines with fewer internal product differences and more streamlined testing.

We generally buy raw material inventory to build our gaming devices when we receive firm orders from our customers. To the extent possible, we also forecast the demand for our products to develop more efficient supply chains with our vendors. We create specifications and design nearly all of the major assemblies that are incorporated into our gaming devices.

We believe our primary offices and related facilities in Las Vegas, as well as process improvement initiatives implemented during the last few fiscal years, will enable us to increase production without adding significant floor space.

Patent, Copyright and Trade Secret Protection

We have been a long-standing participant in the development of intellectual property in our industry. While we do not believe that any single patent or series of patents or other intellectual property is crucial to our business, we use a combination of patents, copyrights, trade secrets, trademarks and proprietary information to maintain and enhance our competitive position, protect our products, and defend against litigious competitors. We have been granted over 475 patents related to games and systems, most of which are unexpired, and have approximately 600 patent applications pending in the United States as well as in many foreign countries. The expiration dates of these patents vary and are based on their filing and issuances dates. We intend to continue to actively file for patent protection, where such filings are commercially reasonable, within and outside the United States. We also seek protection for a large number of our products by registering hundreds of trademarks in the United States and various foreign countries. Under permission or license agreements with third parties, we also sell products covered by independently filed copyrights and trademarks. Typically, these contracts require us to pay royalties to the licensing party. Royalty expenses are included in cost of gaming and systems in our consolidated financial statements.

Employees and Labor Relations

As of June 30, 2013, we and our subsidiaries employed approximately 3,443 individuals worldwide. The large majority of our employees are not represented by a labor union, and we believe that our current relations with our employees are satisfactory.

Financial Information

The other financial information that is required to be included in this Item 1, Business is set forth in Item 6, Selected Financial Data with respect to our revenues, profits and losses, and assets, and in Note 13 to the consolidated financial statements, Segment and Geographical Information with respect to domestic and foreign revenues and assets.

Gaming Regulations and Licensing

The manufacture and distribution of gaming devices and systems are subject to extensive federal, state, local, and foreign regulation. Although the laws vary from jurisdiction to jurisdiction, the regulatory structure and the requirements of the State of Nevada, as described below, are typical of the types of statutory and regulatory schemes to which the Company is subject. Such laws, rules, and regulations

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generally concern the responsibility, financial stability and character of the Company and our officers, directors, major stockholders and key personnel. Many jurisdictions require gaming devices, systems and other products we manufacture to be tested and approved before being distributed. We have obtained all licenses necessary to manufacture, distribute and, where permitted, operate gaming devices in the jurisdictions in which we do business. We manufacture our products in the state of Nevada.

Nevada

Our business is subject to the Nevada Gaming Control Act and the regulations promulgated thereunder (the "Nevada Act") and various local ordinances and regulations. We are subject to the licensing and regulatory control of the Nevada State Gaming Control Board (the "Nevada Board"), the Nevada Gaming Commission (the "Nevada Commission"), and various county and city regulatory agencies, all of which are collectively referred to as the "Nevada Gaming Authorities."

Nevada gaming law is based on policies concerning (i) the prevention of unsavory and unsuitable persons from having any involvement with gaming; (ii) the establishment and maintenance of responsible accounting practices; (iii) the maintenance of effective control over the financial practices of licensees, including the establishment of minimum procedures for internal fiscal affairs and the safeguarding of assets and revenues, providing reliable record-keeping and requiring the filing of periodic reports with the Nevada Gaming Authorities; (iv) the prevention of cheating and fraudulent practices; and (v) providing a source of state and local revenues through taxation and licensing fees. A change in, or non-compliance with, such laws, regulations, and procedures could have an adverse effect on our business.

Each of our subsidiaries that manufactures, distributes, or operates gaming devices in Nevada, or the entities that own such subsidiaries (collectively, the "licensed subsidiaries"), are licensed or found suitable (which is comparable to licensing) by the Nevada Gaming Authorities. The licenses require periodic renewals and payments of fees and taxes and are not transferable. We are registered with the Nevada Commission as a publicly traded corporation and have been found suitable to own the licensed subsidiaries.

Only licensed manufacturers and distributors may manufacture or distribute gaming devices and cashless wagering systems in Nevada. All gaming devices manufactured for use or play in Nevada or for distribution out of Nevada must be approved by the Nevada Commission before they are distributed or exposed for play. Before associated equipment (as defined in the Nevada Act) can be distributed in Nevada, it must be administratively approved by Nevada Board chairman.

In December, 2011, the Nevada Gaming Commission adopted regulations implementing the Nevada Act's provisions authorizing interactive (online) gaming. The nation's first regulatory scheme for such activity provides that only licensed manufacturers of interactive gaming systems and licensed interactive gaming service providers may offer interactive gaming systems and related services to Nevada licensed interactive gaming service operators. On June 21, 2012, the Nevada Gaming Commission approved the application of our subsidiary Bally Gaming, Inc., for such licenses.

The Nevada Gaming Authorities may require any individual who has a material relationship or involvement with us or our licensed subsidiaries, including officers, directors, and key employees, to be found suitable or licensed. The Nevada Gaming Authorities may deny an application for licensing or finding of suitability for any cause they deem reasonable.

The Nevada Gaming Authorities may require us to sever all relationships with anyone who is found unsuitable or who refuses to file appropriate applications.

We and our licensed subsidiaries are required to submit detailed financial and operating reports to the Nevada Commission. Substantially all material loans, leases, sales of securities, and similar financing transactions must be reported to and in some cases approved by the Nevada Commission.

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If the Nevada Commission determined that we had violated the Nevada Act, our licenses could be limited, conditioned, suspended, or revoked. In addition, we could be subject to substantial fines for each separate violation. Any such disciplinary action could, and revocation of any gaming license would, materially adversely affect our operations.

The Nevada Gaming Authorities may require the holder of any of our equity or debt securities to file applications, be investigated, and be found suitable by the Nevada Commission. The applicant must pay all costs of investigation.

The Nevada Act requires any person who acquires more than 5 percent of any class of our voting securities to report the acquisition to the Nevada Commission. The Nevada Act requires that beneficial owners of more than 10 percent of any class of our voting securities apply to the Nevada Commission for a finding of suitability within thirty days after the chairman of the Nevada Board mails written notice requiring such filing, in which case the applicant must pay all costs of investigation. Under certain circumstances, an "institutional investor," as defined in the Nevada Act, that acquires more than 10 percent but not more than 25 percent of a class of our voting securities may apply to the Nevada Commission for a waiver of finding of suitability if the institutional investor holds the securities for investment purposes only, as defined in the Nevada Act. Any person who fails to apply for a finding of suitability or a license within thirty days after being ordered to do so by the Nevada Commission or the chairman of the Nevada Board may be found unsuitable. The same result would occur to a record owner if the record owner, after request, fails to identify the beneficial owner. Any stockholder found unsuitable and who holds, directly or indirectly, any beneficial ownership of our voting securities beyond such period of time as may be prescribed by the Nevada Commission may be guilty of a criminal offense. We are subject to disciplinary action if, after we receive notice that a person is unsuitable to be a stockholder or to have any other relationship with us or our subsidiaries, we (i) pay that person any dividend or interest; (ii) allow the exercise of any voting right; (iii) pay remuneration to that person; or (iv) fail to pursue all lawful efforts to require such unsuitable person to relinquish the voting securities, including, if necessary, the immediate purchase of the securities for cash at fair market value.

In March 2013, the Nevada Commission granted us prior approval to make public offerings of our securities for a period of three years, subject to certain conditions ("Shelf Approval"). The Shelf Approval is not a finding, recommendation, or approval by the Nevada Commission as to the accuracy or inaccuracy of the prospectus or the investment merits of the securities offered. Any contrary representation is unlawful.

Changes in control of us through merger, consolidation, stock or asset acquisitions, management or consulting agreements, or any act or conduct whereby a person or entity acquires control, may not occur without prior Nevada Commission approval. The Nevada Commission has regulations to ameliorate the potentially adverse effects of corporate acquisitions opposed by management, repurchases of voting securities, and corporate defense tactics affecting Nevada gaming licensees. Approvals are required from the Nevada Commission before a registered corporation can make exceptional repurchases of voting securities and before a corporate acquisition opposed by management can be consummated. The Nevada Act also requires prior approval of a plan of recapitalization proposed by our board of directors in response to a tender offer made directly to our stockholders for the purpose of acquiring control of us.

License fees and taxes are payable to the State of Nevada and to the counties and municipalities in which the licensees operate.

We are required to deposit with the Nevada Board and thereafter maintain a revolving fund to pay the expenses of investigation by the Nevada Board of our participation in certain gaming activities outside Nevada. We are also required to comply with certain reporting requirements and are subject to disciplinary action if we violate any gaming laws of the foreign jurisdiction pertaining to the foreign

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gaming operation, fail to conduct the foreign gaming operations to the standards required of Nevada gaming operations, engage in activities that are harmful to Nevada or its ability to collect gaming taxes and fees, or employ a person in the foreign operations who has been denied a license or finding of suitability in Nevada.

Native American Gaming

Gaming operations on Native American lands are governed by tribal and federal law and tribal-state compacts. The Federal Indian Gaming Regulatory Act of 1988 (the "Act") created a framework for the various responsibilities of the tribal, state, and federal authorities over tribal gaming operations. The Act is subject to interpretation and enforcement by the National Indian Gaming Commission, which has the authority to issue regulations and to otherwise regulate tribal gaming activities. Most tribes, in the exercise of their sovereignty, have also established tribal gaming commissions or agencies that regulate gaming operations on their tribal lands. Compacts between tribes and states also may impose conditions and requirements on tribal gaming operations. We are required to comply with all such sources of law, which may impose different requirements with respect to licensing, product approvals, and operations.

ITEM 1A.    RISK FACTORS

Our business and investing in our common stock involves risk. Prospective investors should carefully consider the following risks and uncertainties and other information contained in this Annual Report on Form 10-K, including our financial statements and the notes to those statements, before making an investment decision. We have identified the following important risks and uncertainties that could cause actual results to differ materially from those projected in any forward looking statements we may make from time to time.

Risks Related to Our Business

Our success in the gaming industry depends in large part on our ability to manage and frequently introduce innovative products on a timely basis. If we fail to keep pace with rapid innovations in new technologies or product design and deployment, our business could be adversely affected.

Our success is dependent on our ability to develop and sell new products that are attractive to casino operators and other gaming enterprises and their customers, for both land-based and online gaming operations. Furthermore, if our land-based or online gaming content does not meet or sustain revenue and profitability expectations, they may be replaced by our competitors' products or removed altogether or we may experience a reduction in fees generated from our arrangements. Therefore, our success depends upon our ability to continue to design, manage and frequently market and update technologically sophisticated land-based and online products that meet our customers' needs regarding ease of use and adaptability, and that are unique and entertaining such that they achieve high levels of player appeal and sustainability. If our competitors develop new game content and technologically innovative products and we fail to keep pace or we are otherwise unable to obtain, maintain or manage the level of complexities arising from new gaming technologies, whether land-based or online, our business could be adversely affected. Further, our land-based products could suffer a loss of floor space to table games or other more technologically advanced games.

The demands of our customers and the preferences of the end players are continually changing. There is constant pressure to develop and market new game content and technologically innovative products. Our revenues are dependent on the earning power and life span of our games. We therefore face increased pressure to design and deploy new and successful game content to maintain our revenue and remain competitive. The success of newly introduced technology and products, such as our Pro Series cabinets and ALPHA 2 platform, our iView Display Manager and our mobile and online gaming

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platform, is dependent on customer and end player acceptance as well as the reliability and performance of our products. Our customers will generally only accept a new product if we can show that it is likely to produce more revenue and net wins than our existing products and our competitors' products. While we feel we have been successful at developing new and innovative products, our ability to do so could be adversely affected by:

•

a decline in the popularity of our gaming products with end players;

•

a decision by our customers to reduce the number of gaming devices on their gaming floor;

•

a decision by our customers or the gaming industry in general to cut back on purchases of new gaming devices or to cancel or return previous orders, content, or systems in anticipation of newer technologies;

•

an inability to roll out new game content, services or systems, whether land-based or online, on schedule due to delays in regulatory product approval in the applicable jurisdictions; and

•

an increase in the popularity of our competitors' games.

We have invested and intend to continue to invest significant resources in research and development efforts. We invest heavily in a number of areas including product engineering development for game and system-based hardware, software and game content. If a new product does not gain market acceptance, our business could be adversely affected. Most directly, if a product is unsuccessful we could incur losses and also be required to increase our inventory obsolescence charges. There is no assurance that our investments in research and development will lead to successful new technologies or timely new products. If a new product does not achieve market acceptance, we may not recover our development, regulatory approval and promotion costs.

Further, our newer products are generally technologically more sophisticated than those we have produced in the past and we must continually refine our production capabilities to meet the needs of our product innovation. If we cannot adapt our manufacturing infrastructure to meet the needs of our product innovations, if we are unable to make upgrades to our production capacity in a timely manner, or if we commit significant resources to upgrades for products that are ultimately unsuccessful, our business could be adversely affected. In addition, because of the sophistication of our newer products and the resources committed to their development, they are generally more expensive to produce. If the increase in the average selling price of these new products is not proportionate to the increase in production cost, in each case as compared to our prior products or, if the average cost of production does not go down over time, whether by reason of long-term customer acceptance, our ability to find greater efficiencies in the manufacturing process as we refine our production capabilities or a general decrease in the cost of the technology, our margins will suffer.

Consumer spending on leisure activities is affected by changes in the economy and consumer tastes, as well as other factors that are difficult to predict and beyond our control. Decreases in consumer spending adversely affecting the gaming industry could harm our business, and unfavorable economic conditions have impacted and could continue to negatively impact the play levels of our participation games and purchases of our sale games.

The demand for entertainment and leisure activities tends to be highly sensitive to consumers' disposable incomes, and thus can be affected by changes in the economy and consumer tastes, both of which are difficult to predict and beyond our control. Unfavorable changes in general economic conditions, including recession, economic slowdown, sustained high levels of unemployment, and higher fuel or other transportation costs, may reduce disposable income of casino patrons or result in fewer patrons visiting casinos, whether land-based or online. As a result, we cannot ensure that demand for our products or services will remain constant. Continued or renewed adverse developments affecting economies throughout the world, including a general tightening of the availability of credit, decreased

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liquidity in many financial markets, increasing interest rates, increasing energy costs, acts of war or terrorism, transportation disruptions, natural disasters, declining consumer confidence, sustained high levels of unemployment or significant declines in stock markets, as well as concerns regarding epidemics and the spread of contagious diseases, could lead to a further reduction in discretionary spending on leisure activities such as gambling. Any significant or prolonged decrease in consumer spending on leisure activities could greatly affect the gaming industry, causing some or all of our customers to decrease spending or ultimately declare bankruptcy, each of which would adversely affect our business. If we experience a significant unexpected decrease in demand for our products, we could incur losses and also be required to increase our inventory obsolescence charges.

Our failure to collect outstanding accounts receivable or the deterioration of the financial condition of our customers could negatively impact our business. Development financing loans could adversely impact liquidity or cause us to incur loan losses. We have, and may continue, to incur additional provision for bad debt related to credit concerns on certain receivables.

We have offered extended payment terms to certain customers, including those in foreign jurisdictions. As a result, the collection of accounts receivable has become a matter of greater significance. While we believe the increased level of credit offered to customers has allowed us to grow our business, both domestically and internationally, it has also required direct, additional focus of and involvement by management. A decline in the relative health of the gaming industry, whether as a result of a general economic downturn or otherwise, and the difficulty or inability of our customers to obtain capital to finance their ongoing operations and purchase our products and services could adversely affect our revenues and collection of our outstanding receivables. Further, and especially due to the current downturn in the economy, some of our customers may not pay accounts receivable when due, whether as a result of financial difficulties, bankruptcy or otherwise, or because of assertion of sovereign immunity, or other defenses, resulting in increased write-offs for us. In addition, extended payment term arrangements are more prevalent with our customers in foreign jurisdictions which can implicate additional variables not present in our domestic transactions, and there is greater risk that those amounts will not be collected.

We have also provided financing for expansion or construction of gaming locations and other business purposes, including amongst other things, to assist customers with upfront payments to obtain gaming licenses abroad. These financing activities subject us to increased credit risk in certain regions, which could be exacerbated by unfavorable economic conditions or other political or economic instability in those regions. In addition, the repayment of these loans by the customer are contingent upon their operating performance which may be affected by delays in regulatory approval, as well as delays in the construction and opening of the individual gaming locations. Without the operation of gaming activities our customers may not be able to repay these loans. For example, we loaned a significant amount to an undercapitalized customer in Italy with limited operations to allow it to make advance payments necessary to obtain gaming licenses. If the customer does not otherwise commence gaming activities it will not be able to repay the loan. Finally, any repayments by these customers may also be affected by disputes that may arise from time to time between us and the customer in question. We have in the past and may in the future incur losses on these types of investments and loans. We monitor our investments and financing activities to assess impairment on a quarterly basis. Our results of operations, liquidity, or financial position may be negatively impacted if we are unable to collect on loans or profit from our investments.

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The gaming industry is intensely competitive. We face competition from a number of companies, some of whom have greater resources, and if we are unable to compete effectively or expand into new markets, our business could be negatively impacted.

Competition among wager-based gaming companies is intense and is primarily based on the amount of profit our products generate for our customers in relation to our competitors' products. Additionally, we compete on the basis of price and financing terms made available to customers, the appeal of game content and features to the end player, and the features and functionality of our hardware and software products. There are a number of established, well-financed companies producing both land-based and online gaming products and systems that compete with our products. Some competitors may have access to greater capital resources than we do and as a result may be better positioned to compete in the marketplace.

Competition in the gaming industry is intense due to the limited number of casino operators and other gaming enterprises and jurisdictions in which they operate. Price, accuracy, reliability, and product features and functions are among the factors affecting a provider's success in selling its products. Obtaining space and favorable placement on casino gaming floors is also a competitive factor in our industry and our competitors with larger installed bases of gaming devices may have an advantage in obtaining or retaining more favorable placement than our products. Consolidation among the casino operators and cutbacks in spending by some operators due to the downturn in the economy has increased the level of competition among providers significantly as the amount of capital spend from casino patrons has decreased.

Because of the level of competition we face, our success and profitability is dependent in part on our ability to successfully enter new markets as well as new channels of distribution, such as mobile and online gaming. However, because the rate of growth of gaming in North America has diminished and machine replacement is at historically low levels, the competition has only intensified. Any protracted slowdown in the establishment of new gaming jurisdictions or delays in the opening of new or expanded casinos and continued declines in, or low levels of demand for, machine replacements, or any ability of ours to successfully expand into new channels of distribution such as mobile and online gaming could further heighten the competition we face and adversely affect the demand for our products and our future profits.

Unfavorable political developments, weak foreign economies and other risks related to non-U.S. jurisdictions may hurt our financial condition and results of operations.

Our business is dependent on international markets for a portion of our revenues. As of June 30, 2013, we had approximately $111.6 million of net accounts and notes receivable (current and long-term), or approximately 36 percent of our total net accounts and notes receivable, from customers in foreign countries. We expect that receivables with respect to foreign sales will continue to account for a significant portion of our total accounts and notes receivable outstanding. Our business in these markets is subject to a variety of risks, including:

•

recessions in foreign economies;

•

expropriation, nationalization and limitation or restriction on repatriation of earnings(1);

•

currency exchange fluctuations;

•

reduced protection of intellectual property rights in some countries;

•

longer receivables collection periods and greater difficulty in collecting accounts receivable;

•

difficulties in managing foreign operations;

•

social, political and economic instability;

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•

unexpected changes in regulatory requirements;

•

ability to finance foreign operations;

•

changes in consumer tastes and trends;

•

tariffs and other trade barriers;

•

additional costs of compliance with international laws;

•

acts of war or terrorism; and

•

U.S. government requirements for export.

We also operate in a number of tribal jurisdictions with sovereign immunity that present risks we generally do not encounter in U.S. jurisdictions.

We may not be able to attract and retain the management or employees necessary to remain competitive in our industry.

The competition for qualified personnel in the gaming industry is intense. Our ability to continue to develop new technologies and create innovative products depends on our ability to recruit and retain talented employees. Our future success depends on the retention and continued contributions of our key management, finance, marketing, development and staff personnel, many of whom would be difficult or impossible to replace. Our success is also tied to our ability to recruit additional key personnel in the future. We may not be able to retain our current personnel or recruit any additional key personnel required. The loss of services of any of our personnel or our inability to recruit additional necessary key personnel could have a material adverse effect on our business, financial condition, results of operations and prospects.

Changes in ownership of any of our customers or consolidation within the gaming industry could affect our business.

We are heavily dependent on the gaming industry. A decline in demand for our products in the gaming industry could adversely affect our business. Demand for our products is driven primarily by the replacement of existing products as well as the expansion of existing casinos and the opening of new properties in existing and new jurisdictions as well as the opening of new channels of distribution, such as mobile and online gaming. Because a significant portion of our sales come from repeat customers, our business could be affected if one of our customers is sold to or merges with another entity that utilizes the products and services of one of our competitors or that reduces spending on our products or causes downward pricing pressures. Such consolidations could lead to order cancellations or negatively impact pricing and purchasing decisions or result in the removal of some or all of our products. Also, any fragmentation within the industry creating a number of smaller, independent operators with fewer resources could also adversely affect our business as these operators might cause a further slowdown in the replacement cycle for our products or otherwise adjust the number and frequency of orders they place with us to save money.

The gaming industry is heavily regulated, and regulatory changes may adversely impact our ability to operate or expand.

The manufacture and distribution of gaming devices, development of systems and the conduct of gaming operations, whether land-based or online, are subject to extensive federal, state, local and foreign regulation by various gaming authorities. Each of our games and systems hardware and software must be approved in each jurisdiction in which it is placed. Our ability to continue to operate

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in certain jurisdictions or our ability to expand into new jurisdictions or our ability to launch new product offerings could be adversely affected by:

•

delays in the adoption of or, changes to legislation to permit or expand gaming in new and existing jurisdictions;

•

unfavorable public referendums, such as referendums to increase taxes on gaming revenues;

•

unfavorable legislation affecting or directed at manufacturers or gaming operators;

•

adverse changes to and new interpretations of existing gaming regulations and findings of non-compliance with applicable gaming regulations;

•

delays in approvals from regulatory agencies;

•

a limitation, conditioning, suspension or revocation of any of our gaming licenses or approvals of our games or system hardware or software;

•

unfavorable determinations or challenges of suitability by gaming regulatory authorities with respect to our officers, directors, major stockholders or key personnel; and

•

the adoption of new laws and regulations, or the repeal or amendment of existing laws and regulations, including, but not limited to, internet gaming.

The enactment of unfavorable legislation or government efforts affecting or directed at manufacturers or gaming operators, whether land-based or online, such as referendums to increase gaming taxes or requirements to use local distributors, would likely have a negative impact on our operations.

Public opinion can also exert a significant influence over the regulation of the gaming industry. A negative shift in the public's perception of gaming could affect future legislation in individual jurisdictions. Among other things, such a shift could cause jurisdictions to abandon proposals to legalize gaming, thereby limiting the number of new jurisdictions into which we could expand. Negative public perception could also lead to new restrictions on or the prohibition of gaming in jurisdictions in which we currently operate.

Although the jurisdictions in which we operate vary in their specific requirements, virtually all jurisdictions, including those into which we may expand in the future, require licenses, permits, qualification documentation, including evidence of integrity and financial stability, and other forms of approval to engage in gaming operations or the manufacture and distribution of gaming devices. In addition, any license, permit or approval may be revoked, suspended or conditioned at any time. Some jurisdictions require gaming manufacturers to obtain regulatory approval before engaging in certain transactions, such as business combinations, reorganizations, borrowings, stock offerings and share repurchases. Our officers, directors, major stockholders, and key personnel are also subject to significant regulatory scrutiny. If regulatory authorities determine that any person is unsuitable to work in the gaming industry, we could be required to terminate our relationship with that person. To our knowledge, we and our key personnel have obtained, or applied for, all government licenses and approvals necessary to conduct our activities in the jurisdictions that we operate. However, there can be no assurance those licenses or approvals will be renewed in the future, or that new forms of approval necessary to operate will be granted.

Compliance with environmental, data privacy, health and safety laws and regulations, including new regulations requiring higher standards, may increase our costs, limit our ability to utilize our current supply chain, and force design changes to our products. These changes could reduce the net realizable value of our inventory, which would result in an immediate charge to our consolidated income statements. Non-compliance could negatively impact our operations and financial position as a result of fines, penalties, and the cost of mandated remediation or delays to our manufacturing.

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Our intellectual property protections may be insufficient to properly safeguard our technology.

The gaming industry is constantly employing new technologies in both new and existing markets. We rely on a combination of patent and other technical security measures to protect our products, and continue to apply for patents protecting such technologies. Notwithstanding these safeguards, our competitors may still be able to obtain our technology or imitate our products. Furthermore, others may independently develop products similar or superior to ours.

We also rely on trade secrets and proprietary know-how. We enter into confidentiality agreements with our employees and independent contractors regarding our trade secrets and proprietary information, but we cannot assure you that the obligation to maintain the confidentiality of our trade secrets or proprietary information will be honored. Despite various confidentiality agreements and other trade secret protections, our trade secrets and proprietary know-how could become known to, or independently developed by, competitors.

We may be subject to claims of intellectual property infringement or invalidity. Expenses incurred with respect to monitoring, protecting, and defending our intellectual property rights could adversely affect our business.

Competitors and others may infringe on our intellectual property rights, or may allege that we have infringed on theirs. Monitoring infringement and misappropriation of intellectual property can be difficult and expensive, and we may not be able to detect infringement or misappropriation of our proprietary rights. We may also incur significant litigation expenses protecting our intellectual property or defending our use of intellectual property, reducing our ability to fund product initiatives. These expenses could have an adverse effect on our future cash flows and results of operations. We have in the past and are currently subject to litigation regarding patent infringement which, if resolved adversely to us, could have a material impact on our business. If we are found to infringe on the rights of others we could be required to discontinue offering certain products or systems, to pay damages, or purchase a license to use the intellectual property in question from its owner. Litigation can also distract management from the day-to-day operations of the business. There can be no assurances that certain of our products, including those with currently pending patent applications, will not be determined to have infringed upon an existing third party patent.

The intellectual property rights of others may prevent us from developing new products or entering new markets.

The gaming industry is characterized by the rapid development of new technologies, which requires us to continuously introduce new products and expand into new markets that may be created. Therefore, our success depends in part on our ability to continually adapt our products and systems to incorporate new technologies and to expand into markets that may be created by new technologies. If technologies are protected by the intellectual property rights of others, including our competitors, we may be prevented from introducing products based on these technologies or expanding into markets created by these technologies. If the intellectual property rights of others prevent us from taking advantage of innovative technologies, our financial condition, operating results or prospects may be harmed.

In addition, our business is dependent in part on the intellectual property of third parties. For example, we license trademarks and other intellectual property from third parties for use in our gaming products. Our future success may depend upon our ability to obtain licenses to use new marks and our ability to retain or expand existing licenses for certain products. If we are not able to obtain new licenses or renew or expand existing licenses, we may be required to discontinue or limit our use of such products that use the licensed marks and our financial condition, operating results or prospects may be harmed.

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Our gaming products, particularly our wide area progressive networks, centrally determined systems and our mobile and online gaming platform, may experience losses due to technical difficulties or fraudulent activities.

Our success depends on our ability to avoid, detect, replicate and correct software and hardware errors and fraudulent manipulation of our products. All of our products are designed with security features to prevent fraudulent activity. However, we cannot guarantee that these features will effectively stop all fraudulent or subversive activities. If our security features do not prevent these types of activities, we could adversely be affected. To the extent any of our products experience errors or fraudulent manipulation, our customers may replace our products with those of our competitors. In addition, the occurrence of errors in, or fraudulent manipulation of, our products may give rise to claims for lost revenues and related litigation by our customers and may subject us to investigation or other action by gaming regulatory authorities, including shutting down our products, suspension or revocation of our gaming licenses or disciplinary action. Additionally, in the event of such issues with our products, substantial engineering and marketing resources may be diverted from other areas to rectify the problem.

Systems, network, telecommunications or other technological failures or cyber-attacks may disrupt our business and have an adverse effect on operations.

Any disruption in our network or telecommunications services could affect our ability to operate our gaming or financial systems, which would results in reduced revenues and customer down time. Our networks are susceptible to outages due to fire, flood, power loss, break-ins, cyber-attacks, network penetration, data privacy or security breaches, denial of service attacks and similar events. Despite our implementation of what we believe to be reasonable and adequate network security measures and data protections safeguards, our servers and computer resources are vulnerable to viruses, malicious software, hacking, break-ins or theft, third-party security breaches, employee error or malfeasance, and other potential compromises. Anyone that is able to circumvent our security measures could misappropriate confidential or proprietary information, including that of third parties, cause interruption in our operations, damage our computers or otherwise damage our reputation and business. Any of the foregoing matters related to unauthorized access to or tampering with our systems or networks in any such event could have a material adverse effect on our financial condition, operating results or prospects.

Our online gaming products are part of a new and evolving industry, which presents significant uncertainty and business risks.

Online gaming is a recent industry. The success of this industry and our online gaming products such as our mobile and online gaming platform will be affected by future developments in social networks, mobile platforms, regulatory developments, data privacy laws and regulations and other factors that we are unable to predict or control. Evolving laws and regulations regarding data privacy could adversely impact opportunities for growth in our online gaming products, and could result in additional compliance-related costs. This environment can make it difficult to plan and can provide opportunities for competitors to grow revenues at our expense. Consequently, our future revenues related to our online gaming products may be difficult to predict and we cannot provide any assurance that these products will gain market acceptance, that they will generate revenues at the rates we expect or will be successful in the long run. In addition, as we expand online product offerings, there may be unintended adverse effects on our existing games and systems business.

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Our credit agreement imposes significant restrictions. Failure to comply with these restrictions could result in the acceleration of a substantial portion of our debt, which we may not be able to repay or refinance.

Our credit agreement contains covenants that restrict our ability and certain of our subsidiaries to (among other things):

•

dispose of assets;

•

incur additional indebtedness and issue preferred stock;

•

pay dividends or make other distributions;

•

enter into certain acquisitions;

•

repurchase equity interests or subordinated indebtedness;

•

issue or sell equity interests of our subsidiaries; and

•

engage in mergers or consolidations or certain other transactions with subsidiaries and affiliates.

In addition, our credit agreement requires us to maintain compliance with certain financial ratios. Our ability to comply with such financial ratios, meet our debt service obligations, or reduce our total debt is dependent upon our future performance, which may be affected by events beyond our control. There can be no assurance that we will be able to comply with such restrictions and limitations, or that they will not adversely affect our ability to finance our future operations or capital needs or engage in other business activities that would otherwise be in our interest.

A breach of any of our covenants or our inability to comply with the required financial ratios under the credit agreement or under any replacement credit agreement could result in a default under such credit agreement. In the event of a default, the lenders could elect to declare all borrowings outstanding under such credit agreement, together with any accrued interest and other fees, to be due and payable, as well as require us to apply all available cash to repay the amounts. If we were unable to repay the indebtedness upon its acceleration, the lenders could proceed against the underlying collateral. There can be no assurance that our assets would be sufficient to repay the amount in full, that we would be able to borrow sufficient funds to refinance the indebtedness or that we would be able to obtain a waiver to cure the default.

Current borrowings, as well as potential future financings, may substantially increase our current indebtedness.

No assurance can be given that we will be able to generate the cash flows necessary to permit us to meet our fixed charges and payment obligations with respect to our debt. We could be required to incur additional indebtedness to meet these fixed charges and payment obligations. Incurring additional debt could:

•

adversely affect our ability to expand our business, market our products and make investments and capital expenditures;

•

adversely affect the cost and availability of funds from commercial lenders, debt financing transactions and other sources; and

•

create competitive disadvantages compared to other companies with lower debt levels.

Any inability to service our fixed charges and payment obligations, or the incurrence of additional debt, would have an adverse effect on our cash flows, results of operations and business generally.

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An inability to maintain sufficient liquidity could negatively affect expected levels of operations and new product development.

Future revenue may not be sufficient to meet operating, product development and other cash flow requirements. Sufficient funds to service our debt and maintain new product development efforts, and expected levels of operations may not be available. Additional capital, if and when needed by us, may not be available on terms acceptable to us. If we cannot obtain sufficient capital on acceptable terms when needed, we may not be able to carry out our planned product development efforts and level of operations.

Our reported results can be affected adversely by the implementation of new, or changes in the interpretation of existing, accounting principles or financial reporting requirements.

Our financial reporting complies with accounting principles generally accepted in the United States of America ("U.S. GAAP"), and U.S. GAAP is subject to change over time. If new rules, or interpretations of existing rules, require us to change our financial reporting (including the proposed lease accounting changes and the adoption of international financial reporting standards ("IFRS") in the United States), our reported results of operations and financial condition could be affected substantially, including requirements to restate historical financial reporting. As an example, the adoption of IFRS could affect many of our financial ratios and covenant compliance calculations under our credit agreement. We may or may not be successful in changing the original financial ratios based on U.S. GAAP with our lenders, and if successful, we may incur additional costs in updating our credit agreement for these new ratios.

As we introduce new products and transactions become increasingly complex, additional analysis and judgment is required to account for and recognize revenues in accordance with U.S. GAAP. Transactions may include multiple element arrangements and/or software components and applicable accounting principles could further change the timing of revenue recognition and could adversely affect our financial results for any given period. Fluctuations may occur in our deferred revenues and reflect our continued shift toward more multiple element contracts that include systems and software.

Changes in laws or regulations or the manner of their interpretation or enforcement could adversely impact our financial performance and restrict our ability to operate our business or execute our strategies.

New laws or regulations, or changes in existing laws or regulations or the manner of their interpretation or enforcement, could increase our cost of doing business and restrict our ability to operate our business or execute our strategies. This includes, among other things, the possible taxation under U.S. law of certain income from foreign operations, and compliance costs and enforcement under the Dodd-Frank Wall Street Reform and Consumer Protection Act. For example, under Section 1502 of the Dodd-Frank Act, the SEC has adopted additional disclosure requirements related to the source of certain "conflict minerals" for issuers for which such "conflict minerals" are necessary to the functionality or production of a product manufactured, or contracted to be manufactured, by that issuer. The metals covered by the proposed rules include tin, tantalum, tungsten and gold, commonly referred to as "3TG." Our suppliers may use some or all of these materials in their production processes. The rules, require us to conduct a reasonable country of origin inquiry to determine if we know or have reason to believe any of the minerals used in the production process may have originated from the Democratic Republic of the Congo or an adjoining country. If we are not able to determine the minerals did not originate from a covered country or conclude that there is no reason to believe that the minerals used in the production process may have originated in a covered country, we would be required to perform supply chain due diligence on members of our supply chain. Global supply chains can have multiple layers, thus the costs of complying with these new requirements could be substantial. These new requirements may also reduce the number of suppliers who provide conflict

26

free metals, and may affect our ability to obtain products in sufficient quantities or at competitive prices. Compliance costs and the unavailability of raw materials could have a material adverse effect on our results of operations.

Our financial results vary from quarter to quarter, which could negatively impact our business.

Various factors affect our quarterly operating results, some of which are not within our control. These factors include, among others:

•

the financial strength of the gaming industry;

•

consumers' willingness to spend money on leisure activities;

•

the timing and introduction of new products;

•

the mix of products sold;

•

the timing of significant orders from and shipments to or installations by customers;

•

product pricing and discounts;

•

the timing of acquisitions of other companies and businesses or dispositions; and

•

general economic conditions.

In certain sales of new gaming machines and the placement of participation gaming machines, we have offered free gaming machines and free conversions, while at the same time we continue to charge our customers for gaming machines and conversions upgrade kits. We cannot be sure that competitive pressure will not cause us to increase the number of free gaming machines and conversions we are expected to offer to our customers, which would decrease the revenue we expect to receive and reduce our gross profit.

Our gross margins are impacted in a given period by a number of different factors. For example, our gross margins would be adversely affected by both decreases to the average selling prices of our units or our average daily revenue from gaming operations. The introduction of new products can also impact gross margins. Increases to our costs of products sold, whether from higher material costs due to the fluctuating commodities markets, higher labor costs, increased freight charges reflecting escalating energy prices or the use of higher-priced technology in newer products, can also have a negative impact on gross margins. These and other factors are likely to cause our financial results to fluctuate from quarter to quarter. We believe that quarter-to-quarter comparisons of our results of operations may not be meaningful. In addition, such fluctuations could cause us to be unable to comply with the financial ratios in our credit agreement.

Business combinations and investments in intellectual properties or affiliates may not achieve the financial and strategic goals that were contemplated at the time of the transaction, which could materially affect our financial results.

We have invested, and may continue to invest, in strategic business combinations and acquisitions of important business technologies and intellectual property that we believe will expand our geographic reach, product lines, and/or customer base. Those combinations and acquisitions and any future such transactions may present difficulties in the assimilation of acquired operations, technologies and products, or may prove to be less valuable than the price we paid because of, among other things, a failure to realize anticipated benefits such as cost savings and revenue enhancements or because of the assumption of liabilities in an acquisition, including unforeseen or contingent liabilities in excess of the amounts estimated. In addition, acquisitions can divert management's attention from day-to-day operations and may include substantial transaction costs. We also may encounter difficulties applying our internal controls to an acquired business. Any of these events or circumstances may have an

27

adverse effect on our business by requiring us to, among other things, record substantial impairment charges on goodwill and other intangible assets, resulting in a negative impact on our operating results.

Moreover, as we continue to evaluate our business and assess our long-term strategic goals, we will also evaluate past and potential investments to determine how they will fit into our organizational structure. If an event or change occurs in affiliate relationships or agreements associated with business combinations, we may be required to reassess cash flows, recoverability, useful lives, and fair value measurements, which may result in material impairment charges.

Provisions of our articles of incorporation and bylaws, Nevada law, and the regulatory burdens attendant to ownership, could discourage or prevent a potential takeover of our Company that might otherwise result in our stockholders receiving a premium over the market price for our common stock.

Our articles of incorporation permit our Board of Directors to issue special shares from time to time, with such rights and preferences as they consider appropriate. Our Board of Directors could authorize the issuance of special shares with terms and conditions and under circumstances that could have an effect of discouraging a takeover or other transaction.

As a Nevada corporation, we are also subject to certain provisions of the Nevada General Corporation Law that have anti-takeover effects and may inhibit a non-negotiated merger or other business combination. These provisions are intended to encourage any person interested in acquiring us to negotiate with, and to obtain the approval of, our Board of Directors. Some of these provisions may discourage a future acquisition of the Company, including an acquisition in which the stockholders might otherwise receive a premium for their shares. As a result, stockholders who might desire to participate in such a transaction may not have the opportunity to do so.

Risks Related to Our Proposed Acquisition of SHFL entertainment, Inc. ("SHFL")

On July 16, 2013, we entered into a definitive agreement to acquire SHFL at a per share price of $23.25 in cash for total consideration of approximately $1.3 billion. The transaction is subject to approval by SHFL's shareholders, required regulatory and other approvals and customary closing conditions. We have obtained committed financing to complete the acquisition and the transaction is not subject to a financing contingency.

The obligations of both us and SHFL to consummate the merger are subject to a number of conditions, which, if not fulfilled, may result in termination of the merger agreement.

The merger agreement contains a number of customary closing conditions, including that certain representations and warranties be accurate, that certain covenants be fulfilled, that certain consents and regulatory approvals discussed below have been obtained, that there are no legal prohibitions against closing, that SHFL's stockholders have adopted the merger agreement, and certain other conditions. Many of the conditions are not within either our or SHFL's control and neither company can predict when or if these conditions will be satisfied. If any of these conditions are not satisfied or waived within a certain period of time, which may be extended under certain circumstances, it is possible that the merger will not be consummated in the expected time frame or that the merger agreement may be terminated.

The merger cannot be consummated before the receipt of consents and clearances from U.S. antitrust authorities and certain domestic and foreign regulatory authorities.

The merger cannot be consummated until all applicable waiting periods have expired or terminated under U.S. antitrust laws and various approvals, consents, or clearances are obtained from certain domestic and foreign regulatory entities regulating the gaming industry in certain jurisdictions in which we and SHFL operate. In deciding whether to grant antitrust or regulatory clearances, the relevant

28

authorities will consider the effect of the merger on competition within their relevant jurisdictions and other matters. The terms and conditions of approvals that are granted may impose requirements, limitations, costs, or restrictions on the conduct of business following the closing. There can be no assurance that regulators will not impose terms, conditions, requirements, limitations, costs, or restrictions that would delay the closing, impose additional material costs on or limit revenues, or limit some of the synergies and other benefits we anticipate following closing. In addition, we cannot provide any assurance that any such terms, conditions, requirements, limitations, costs, or restrictions will not result in a material delay in, or the abandonment of, the merger.

We may not successfully integrate SHFL's business operations after the merger and we may not achieve the perceived benefits of the merger.

The integration of SHFL's operations after the merger may be difficult, time consuming and costly. After completion of the merger, we must successfully integrate, among other things, the product and service offerings, product development, sales and marketing, research and development, administrative and customer service functions, and the management information systems of SHFL with ours. In addition, SHFL's internal control over financial reporting, disclosure controls and procedures and regularly compliance programs must be integrated with ours. We will also need to retain the management, key employees, customers, distributors, vendors and other business partners of both companies. It is possible that these integration efforts will not be completed as smoothly as planned or in a timely manner or, that we may not successfully integrate SHFL's operations at all. The integration process can significantly disrupt the businesses both ours and SHFL's day-to-day operations, even with proper planning and implementation. The failure to meet the challenges involved in successfully integrating SHFL's operations or otherwise to realize any of the anticipated benefits of the merger could seriously harm our results of operations.

We may not realize the anticipated benefits or synergies of the merger to the extent, or in the timeframe, anticipated, or at all. The anticipated benefits and synergies of the merger are based on projections and assumptions, not actual experience, and assume a successful integration, which is subject to, among other things, the matters discussed above. In addition, our ability to realize these benefits and synergies could be adversely impacted by practical or legal constraints or potential unknown liabilities, liabilities that are significantly larger than we currently anticipate or unforeseen increases in expenses. If we are not able to successfully integrate SHFL's business or if we do not achieve the perceived benefits of the merger as rapidly or to the extent anticipated by financial or industry analysts, we may be adversely affected.

We will have more indebtedness after the merger which will increase demands on our cash resources.

We anticipate incurring new indebtedness to complete the merger. Proceeds from the indebtedness will be used to fund the merger consideration paid to SHFL stockholders. In addition, we will be assuming or repaying certain outstanding SFHL debt. As a result, after the merger, we expect to have substantially more indebtedness than we currently do. This additional debt will increase demands on our cash resources by requiring us to dedicate a significantly larger portion of our cash flow from operations to make payments on our indebtedness, thereby reducing the availability thereof to fund working capital, capital expenditures and other investments and general corporate purposes. In addition, the increased levels of indebtedness could, among other things:

•

adversely affect our ability to further expand our business and market our products:

•

increase our vulnerability to general adverse economic and industry conditions;

•

adversely affect the cost and availability of funds from commercial lenders, debt financing transactions and other sources;

29

•

adversely affect our ability to pursue additional acquisitions and other strategic opportunities; and

•

place us at a competitive disadvantage compared to our competitors, some of who have lower debt levels.

We have incurred significant costs to date and there is no assurance that we will not incur significant additional costs associated with the merger.

We have incurred significant costs to date and expect to incur significant additional costs associated with the merger, including in respect of integrating the operations of SHFL, transaction fees and other costs related to the merger. These costs could also include those related to the severance agreements of SHFL employees which could be triggered by certain actions taken by us after the merger. We also face potential costs related to the redeployment or relocation of SHFL employees, reorganization or closure of facilities, relocation and disposition of excess equipment and other integration costs. We have not yet determined the amount of these costs. There can be no assurance that we will not incur additional material expenses in connection with the merger that are not contemplated at this time.

ITEM 1B.    UNRESOLVED STAFF COMMENTS

None.

ITEM 2.    PROPERTIES

The following sets forth information regarding our leased and owned properties. We believe our facilities are suitable for our needs and we have no future expansion plans that would make these properties inadequate. Each property is fully utilized. See Note 8 to the consolidated financial statements, Leases, for information as to our lease commitments with respect to the leased properties.

Global Headquarters and Manufacturing and Assembly Facility

We maintain our global headquarters and our primary manufacturing and assembly facilities in Las Vegas, Nevada in a facility with approximately 150,000 square feet that we own. The facility is used for corporate administrative functions as well as to accommodate the design, assembly and distribution of gaming equipment and casino management systems' hardware and to meet product design demands and varying levels of volume requirements. We also lease an additional 129,000 square feet of office, warehouse and other rental space in the general area of our main facility.

Las Vegas and Reno Technology Campus

We lease an additional 36,000 square feet of office space next door to our global headquarters facility in Las Vegas for a Technology Campus for our game development, advanced development, and project management teams. In addition, we lease approximately 83,000 square feet in Reno, Nevada, which provides a larger campus-style environment that accommodates the growth of our game development, system development, product management, and administrative functions in northern Nevada.

Innovation Lab

Our Global Innovation Lab is located in Pleasanton, California, a major suburb of San Francisco. We lease a facility with approximately 8,200 square feet that allows us to draw from the significant high-tech talent that resides in the Silicon Valley.

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Other Leased Facilities

India—We lease a total of approximately 128,000 square feet of office and R&D space in Bangalore and Chennai.

Netherlands—We lease a total of approximately 26,000 square feet of office, sales, service and warehouse space in Amsterdam and Diemen.

China—We lease approximately 28,000 square feet of office, sales, warehouse and other rental space in Macau.

South America—We lease a total of approximately 25,000 square feet of office and warehouse space in Buenos Aires, Argentina, Santiago, Chile, Bogota, Columbia, Lima, Peru and Montevideo, Uruguay.

In addition to the facilities described above, we maintain leased space in major gaming jurisdictions worldwide including a total of approximately 130,000 square feet of office, sales and service, R&D, warehouse and other rental space throughout the United States and Canada, and a total of approximately 36,000 square feet of office, sales and service, R&D and warehouse space in Australia, Europe, Mexico, Singapore and South Africa. These facilities are located in the cities listed below. Each property is fully utilized.

United States and Canada	Australia, Europe, Mexico, Singapore and South Africa
Scottsdale, Arizona	Sydney, Australia
Huntington Beach, California	Nice, France
Murrietta, California	Rheine, Germany
San Diego, California	Rome, Italy
Golden, Colorado	Sliema, Malta
Dover, Delaware	Mexico City, Mexico
Davie, Florida	Aukland, New Zealand
Tampa, Florida	Panama City, Panama
Kennesaw, Georgia	Singapore, Singapore
Lisle, Illinois	Johannesburg, South Africa
Biloxi, Mississippi	Chestergates, United Kingdom
Egg Harbor Township, New Jersey	Gibraltar, United Kingdom
Chester, New York
Oklahoma City, Oklahoma
Fife, Washington
Toronto, Canada
San Juan, Puerto Rico

ITEM 3.    LEGAL PROCEEDINGS

Bally has been named in and has brought lawsuits in the normal course of business. We do not expect the outcome of these suits to have a material effect on our financial position or results of operations. A description of certain of these matters is contained in Note 12 to the consolidated financial statements, Commitments and Contingencies, and is incorporated herein by reference.

ITEM 4.    MINE SAFETY DISCLOSURES

Not applicable.

31

PART II

ITEM 5.    MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock is listed on the New York Stock Exchange (the "NYSE") under the symbol "BYI". The following table sets forth the high and low closing bid price of our common stock as reported by the NYSE for the periods indicated.

	Price Range of Common Stock
	High		Low
Fiscal Year Ended June 30, 2013
1st Quarter	$	49.39	$	41.89
2nd Quarter		50.48		43.85
3rd Quarter		52.45		45.36
4th Quarter		57.30		47.33
Fiscal Year Ended June 30, 2012
1st Quarter	$	41.44	$	26.98
2nd Quarter		39.56		25.15
3rd Quarter		47.18		39.37
4th Quarter		48.55		44.27

As of August 20, 2013, we had approximately 3,764 holders of record of our common stock and the closing price on the NYSE was $71.68.

Dividend Policy

We have never declared or paid cash dividends on our common stock. Our credit agreement materially limits our ability to pay dividends on our common stock, as discussed in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 7 to the consolidated financial statements, Long-Term Debt. We intend to follow a policy of retaining earnings to finance the growth of our business and do not anticipate paying any cash dividends in the foreseeable future. The declaration and payment of future dividends on our common stock will be at the sole discretion of our Board of Directors and will depend on our profitability, the terms of our credit agreement and our financial condition, capital requirements, statutory and contractual restrictions, future prospects and other factors the Board of Directors deem relevant.

Share Repurchases

The Company's Board of Directors has historically approved a variety of share repurchase programs under which, subject to price and market conditions, purchases of shares could be made from time to time in the open market or in privately negotiated transactions using available cash.

On May 2, 2012, the Company's Board of Directors approved a new $150 million share-repurchase program, which replaced the Company's prior repurchase program under which there remained $56.6 million in unused capacity at such time. On October 24, 2012, the Company's Board of Directors approved a new $150 million share-repurchase program, which replaced the Company's prior repurchase program under which there remained $23.2 million in unused capacity at such time. On April 24, 2013, the Company's Board of Directors approved a new $300 million share repurchase program.

On April 24, 2013, the Company entered into an accelerated share repurchase agreement with J.P. Morgan Securities LLC ("JPMorgan") under which it paid JPMorgan $150.0 million and JPMorgan delivered 2.3 million shares of the Company's common stock on April 26, 2013, representing a

32

substantial majority of the shares expected to be repurchased under the agreement. Upon final settlement of the agreement, the Company may receive additional shares or pay additional cash or shares (at its option) based on a discount to the average of the daily volume weighted average price of the Company's common stock during the repurchase period. The agreement is subject to customary termination and adjustment provisions following the occurrence of specified events, including major corporate transactions such as announcements of mergers and acquisitions.

Our quarterly share repurchases under these plans, excluding treasury shares acquired in non-cash transactions related to forfeited stock awards and shares exchanged for options exercised, were as follows:

Period	Total Number of Shares (or Units) Purchased		Average Price Paid Per Share (or Unit)		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs		Maximum Number (or Approximate Dollar Value) of Shares (or Units) That May Be Purchased Under the Plans or Programs
April 1 - April 30, 2013		2,505,470	$	62.88		2,505,470	$	149,779,699
May 1 - May 31, 2013		—	$	—		—	$	149,779,699
June 1 - June 30, 2013		—	$	—		—	$	149,779,699
Total		2,505,470	$	62.88		2,505,470

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Stock Performance Graph

The following graph compares the cumulative 5-year total return to shareholders on Bally Technologies Inc.'s common stock relative to the cumulative total returns of (i) the S&P 500 index, (ii) the Russell 2000 index and (iii) a customized peer group of five companies that includes: Aristocrat, IGT, Scientific Games Corp., Shuffle Master, Inc. and WMS ("Peer Group"). The graph tracks the performance of a $100 investment in the Company's common stock, in each index and in the peer group (with reinvestment of all dividends) from June 30, 2008 through June 30, 2013.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among Bally Technologies Inc., the S&P 500 Index,
the Russell 2000 Index, and a Peer Group

*Comparison of 60 Month Cumulative Return:

	6/08		6/09		6/10		6/11		6/12		6/13
Bally Technologies Inc.		100.00		88.52		95.83		120.36		138.05		166.92
S&P 500		100.00		73.79		84.43		110.35		116.36		140.32
Russell 2000		100.00		74.99		91.10		125.18		122.58		152.25
Peer Group		100.00		67.52		66.16		64.09		58.89		72.78

The stock price performance included in this graph is not necessarily indicative of future stock price performance.

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ITEM 6.    SELECTED FINANCIAL DATA

The following selected statement of operations data for fiscal years 2013, 2012 and 2011, and selected balance sheet data for fiscal years 2013 and 2012 has been derived from the consolidated financial statements, which appear elsewhere in this Annual Report on Form 10-K. The Selected Financial Data should be read in conjunction with:

•

Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations; and

•

Item 8, Financial Statements and Supplementary Data.

	Year Ended June 30,
	2013			2012			2011			2010			2009
	(in 000s, except per share amounts)
Statement of Operations Data:
Revenues	$	997,039		$	879,759		$	758,155		$	778,191		$	843,760
Operating income(1)		235,510			179,443			151,535			184,110			203,018
Income from continuing operations before income taxes		216,275			164,459			143,393			170,818			184,960
Income tax expense		(76,574	)		(63,549	)		(45,182	)		(60,721	)		(64,781	)
Income from continuing operations		139,701			100,910			98,211			110,097			120,179
Income from discontinued operations(2), net of tax		—			—			—			7,181			8,057
Gain (loss) on sale of discontinued operations(2), net of tax		—			—			(403	)		22,079			—
Net income(1)		139,701			100,910			97,808			139,357			128,236
Less: net income (loss) attributable to noncontrolling interests		(1,743	)		(238	)		(455	)		1,880			1,927
Net income attributable to Bally Technologies, Inc.	$	141,444		$	101,148		$	98,263		$	137,477		$	126,309
Basic earnings per share attributable to Bally Technologies, Inc.:
Income from continuing operations	$	3.53		$	2.35		$	1.90		$	2.00		$	2.19
Income from discontinued operations		—			—			—			0.11			0.13
Gain (loss) on sale of discontinued operations		—			—			(0.01	)		0.41			—
Total	$	3.53		$	2.35		$	1.89		$	2.52		$	2.32
Diluted earnings per share attributable to Bally Technologies, Inc.:
Income from continuing operations	$	3.45		$	2.28		$	1.82		$	1.89		$	2.10
Income from discontinued operations		—			—			—			0.11			0.12
Gain (loss) on sale of discontinued operations		—			—			(0.01	)		0.38			—
Total	$	3.45		$	2.28		$	1.81		$	2.38		$	2.22

35

	Year Ended June 30,
	2013			2012			2011			2010			2009
	(in 000s)
Statement of Cash Flows Data:
Continuing operations:
Operating activities	$	205,372		$	130,983		$	56,756		$	129,125		$	153,308
Investing activities		(21,648	)		(35,198	)		(29,220	)		(32,324	)		(28,966	)
Financing activities		(151,073	)		(126,946	)		(106,466	)		(83,921	)		(131,250	)
Effect of exchange rate changes on cash		(2,104	)		(2,591	)		669			(396	)		(71	)
Discontinued operations:
Operating activities		—			—			(403	)		(9,483	)		8,868
Investing activities		—			—			—			78,757			(6,756	)
Financing activities		—			—			—			(1,267	)		(1,371	)
Increase in cash and cash equivalents of discontinued operations		—			—			—			8,712			2,133
Increase (decrease) in cash and cash equivalents	$	30,547		$	(33,752	)	$	(78,664	)	$	89,203		$	(4,105	)

	As of June 30,
	2013		2012		2011		2010		2009
	(in 000s)
Balance Sheet Data:
Cash and cash equivalents	$	63,220	$	32,673	$	66,425	$	145,089	$	55,886
Total current assets		493,077		480,459		473,677		476,409		465,607
Total current liabilities		226,935		214,037		160,616		174,553		178,050
Net working capital		266,142		266,422		313,061		301,856		287,557
Total assets		979,265		970,467		927,394		913,176		880,882
Total long term debt and capital leases, including current maturities(3)		604,615		511,466		515,403		173,793		209,087
Total stockholders' equity(3)		119,172		197,475		214,592		544,192		438,749

(1)

We have recorded the following significant items affecting comparability of operating income and/or net income:

•

Net income in fiscal year 2011 and 2009 was affected by debt issuance costs write-offs of $4.1 million and $0.7 million, respectively.

•

Operating income and net income in fiscal year 2012 was impacted by a loss contingency accrual of $10.0 million, and operating income and net income in fiscal year 2010 was impacted by impairment charges of $11.4 million.

(2)

Discontinued operations consist of:

•

We previously owned and operated the Rainbow Casino, a dockside riverboat casino in Vicksburg, Mississippi. The sale was completed on June 8, 2010 and was an all-cash transaction for approximately $80.0 million which resulted in a gain in fiscal year 2010 of $22.1 million, net of tax. In fiscal year 2011, we reduced the gain on sale by approximately $0.4 million, net of tax, for certain post-closing adjustments.

(3)

During fiscal year 2013, 2012 and 2011, we repurchased $290.2 million, $156.4 million and $477.2 million, respectively, of our common stock.

During fiscal year 2013, we entered into a second amended and restated credit agreement that provides for a five-year $1.07 billion senior secured credit facility comprised of a $370 million term loan and a $700 million revolving credit facility.

During fiscal year 2011 we entered into an amended and restated credit agreement that provided for a $700 million senior secured credit facility comprised of a $300 million term loan and a $400 million revolving credit facility.

36

ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Business Overview

We are a diversified global gaming company that designs, manufactures, operates, and distributes advanced technology-based gaming devices, systems, server-based solutions, custom mobile applications, and interactive applications. Our innovations and technology solutions allow our customers to more effectively manage their operations using our wide range of marketing, data management and analysis, accounting, player tracking, security, and other software applications and tools. We also provide hardware, including spinning-reel and video gaming devices, specialty gaming devices, and wide-area progressive systems. Under our business-to-business model, we support customers that include traditional land-based, riverboat, and Native American casinos, video lottery and central determination markets.

Our gaming equipment, gaming operations, and systems product lines have increasingly converged with the proliferation of high-speed networks. Key innovation drivers in our industry are Ethernet-based gaming floors, downloadable and server-based games and applications, and open protocols and common industry standards in game and system development, such as GSA protocols. Players benefit from these advances by gaining more exciting experiences, better communication from casino owners, and superior customer service from gaming operators. Our customers benefit through operational efficiencies that can increase their profits and streamline their operations as well as new ways to drive excitement and play on the casino floor through the ability to do system-based floor-wide promotions and slot tournaments.

We derive our revenue from the following:

	Year Ended June 30,
	2013				2012				2011
	(dollars in millions)
Gaming Equipment	$	339.8	34	%	$	310.7	35	%	$	246.6	33	%
Gaming Operations		405.0	41	%		357.4	41	%		318.6	42	%
Systems		252.2	25	%		211.7	24	%		193.0	25	%
	$	997.0	100	%	$	879.8	100	%	$	758.2	100	%

• Gaming Equipment	—	Sale of gaming devices and related equipment, parts and conversion kits;
• Gaming Operations	—	Operation of linked progressive systems, video lottery and centrally determined systems, and the rental of gaming devices and content; and
• Systems	—	Sale and support of specialized systems-based software, hardware and interactive products and related recurring maintenance revenue.

We review certain financial measures in assessing our financial condition and operating performance not only in connection with creating our internal forecasts and in making comparisons to financial results from prior periods, but also in making comparisons to our competitors' financial results. We focus on fluctuations in revenue, cost and gross margin and also pay close attention to changes in our consolidated operating income, net income, diluted earnings per share, adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, including asset charges and loss contingencies and share-based compensation), cash flows from operations and free cash flow (cash flows from operating activities less capital expenditures) as they are key indicators of our success. We also measure changes in selling, general and administrative ("SG&A") expenses as a percent of revenue, which indicate management's ability to control costs, as well as changes in R&D costs as a percent of revenue, which demonstrate investment in technology and product development. The measures listed above are not a

37

comprehensive list of all factors considered by us in assessing our financial condition and operating performance, and we may consider other individual measures as required by trends and discrete events arising in a specific period, but they are the key indicators.

The gaming sector was negatively impacted by the recent prolonged reduction in consumer spending and limited resources available to fund capital projects. While consumer spending on gaming activities has increased within the last twelve months as a result of this prolonged economic environment we provided select customers a greater amount of payment terms for periods up to one year, and in some cases for periods up to three years. We expect to continue to extend credit for these longer periods for the foreseeable future.

There are several new and potential gaming market developments that we believe will benefit us in the long term. In our domestic market, we are focused on approved new jurisdictional opportunities and expansions in Illinois, Ohio, Maryland, Louisiana, Mississippi, Massachusetts, New York and California, and the potential for new market opportunities in New Hampshire, Kentucky and Texas. The breadth and timing of such opportunities remain uncertain due to the legislative process in these jurisdictions, as well as the difficult credit environment facing certain of our customers and the risk of the gaming industry impact of renewed economic uncertainty. We are also engaged in expanding our position in South Africa, Australia, New Zealand, the Philippines and Mexico, and into potential new markets in Eastern Europe, Greece, Taiwan, South Korea, Japan, and Brazil. Our entry into the Italian VLT market in July 2012 was delayed by a lengthened regulatory approval process that developed in that market after we submitted our products for approval. As a result, certain customers and partners have modified their business approach to the market, which has, at least in the near term, reduced the amount of business we expected from the Italian VLT market.

Gaming Equipment

	Year Ended June 30,
	2013		2012		2011
	(dollars in millions, except ASP)
Revenues	$	339.8	$	310.7	$	246.6
New gaming devices		19,007		16,504		13,537
New unit Average Selling Price ("ASP").	$	16,411	$	17,044	$	15,832

Gaming equipment revenues improved in fiscal year 2013 due primarily to an increase in the number of new gaming devices sold as a result of our investments in key platform and hardware innovations, when compared to the same periods in the prior two years and our entrance into both the Illinois and Canada video lottery markets in fiscal year 2013. ASP decreased in fiscal year 2013, when compared to fiscal year 2012, due primarily to a higher mix of lower-ASP VLT and VGT units sold and lower-ASP units sold in certain international markets. Our Pro Series cabinets with ALPHA 2 technology are state of the art for the industry with regards to ergonomics, processing power, display technology, input device, operating system, sound and serviceability. Our Pro Series cabinets also feature the iDeck, a multi-touch fully programmable and downloadable button panel which offers the opportunity to add more interaction to the game-play experience with mystery bonus events, virtual shooting galleries and skill-based bonus games.

38

Gaming Operations

	Year Ended June 30,
	2013		2012		2011
	(dollars in millions)
Revenues	$	405.0	$	357.4	$	318.6
End of period installed base:
Linked progressive systems		2,463		1,792		1,059
Rental and daily-fee games		14,855		14,890		14,315
Video lottery systems(1)		11,846		11,718		8,350
Centrally determined systems		35,284		47,633		50,754

(1)

Excludes 727, 406 and 0 electronic table games operating in fiscal years 2013, 2012 and 2011, respectively.

Gaming Operations revenues increased period over period due primarily to the significant investments we have made in our game development studios and game platform over the past few years, the continued placement of premium games, including the recently released Pawn Stars™, Hot Shot Progressive™, and Cash Wizard Tiki Magic™, the continued success of Cash Connection, the latest WAP link, and the benefit from a full year's results from games placed in Resorts World New York City in late calendar year 2011 which impacted video lottery systems. The releases of NASCAR, Michael Jackson King of Pop, GREASE, Betty Boop's Fortune Teller, and Cash Spin Jackpot, all on our WAP link Cash Connection, drove record WAP revenue and units placed in fiscal year 2013. We will release our second title featuring Michael Jackson, Wanna Be Startin Somethin', in the first quarter of fiscal year 2014.

The installed base of centrally determined systems has declined as certain customers have upgraded these systems to utilize more sophisticated player tracking, bonus and marketing applications, which are included in systems maintenance revenues.

Systems

	Year Ended June 30,
	2013				2012				2011
	(dollars in millions)
Hardware	$	74.2	30	%	$	67.3	32	%	$	74.9	39	%
Software and services		86.8	34	%		69.5	33	%		53.0	27	%
Maintenance		91.2	36	%		74.9	35	%		65.1	34	%
	$	252.2	100	%	$	211.7	100	%	$	193.0	100	%

Systems revenue increased period over period due to across-the-board increases in hardware, software and services and maintenance revenues as compared to the prior year.

Our Systems revenues are comprised of:

•

Hardware, including our iVIEW player-user-interface device and specialized system-based products.

•

Software and services, including licenses of our core systems and suite of player tracking, bonusing, and marketing applications and customized system solutions.

•

Maintenance, providing access to future enhancements or upgrades to the system software for a fee based on a percent of the license fee.

39

The combination of iVIEW DM and Elite Bonusing Suite and other features like Universal Card across multiple properties are becoming increasingly compelling return-on-investment propositions with multiple customer instances of demonstrable value generated from such implementations. During fiscal year 2013, several large casino customers successfully launched components of our Elite Bonusing Suite, including NASCAR Virtual Racing, across the casino floor on both iVIEW and iVIEW DM. We also had several large core system installations during fiscal year 2013 and made good progress with international systems installations including Canada, South Africa and New Zealand.

We have continued to invest in the basics of enterprise software development, delivery, customer support and services discipline, on improving core products, providing quality upgrade options for our customers, and increasing customer satisfaction levels through better service and support.

Operating Expenses

	Year Ended June 30,
	2013		% of Revenue			2012		% of Revenue			2011		% of Revenue
	(dollars in millions)
Selling, general and administrative	$	276.7		28	%	$	255.0		29	%	$	225.0		30	%
Research and development costs	$	111.1		11	%	$	96.2		11	%	$	88.1		12	%

The increase in SG&A expenses in each fiscal year period was due primarily to the increases in payroll and related expenses, regulatory, bad debt expense, and other infrastructure expenses to support key new markets. Payroll and related expenses increased due primarily to an increase in headcount in the comparative periods. Fiscal year 2012 includes a loss contingency accrual of $10.0 million related to several legal matters.

The increase in R&D costs was attributable to our continued focus on our technology assets, the expansion of technical resources, and the competitive landscape that requires continuous development of future generations of gaming products and systems. R&D was consistent at 11% of total revenues in both fiscal year 2013 and 2012.

Liquidity

Total cash and cash equivalents increased $30.5 million in the year ended June 30, 2013, compared to a decrease of $33.8 million in the same period last year. Net cash provided by operating activities from continuing operations was $205.4 million, $131.0 million and $56.8 million for the years ended June 30, 2013, 2012 and 2011, respectively. Cash provided by operating activities from continuing operations in the current period were positively impacted by improvements in net income, accounts and notes receivable, and inventory during the current period.

40

Results of Operations

The summary financial results and operating statistics are as follows:

	Year Ended June 30,
	2013		% Rev			2012		% Rev			2011		% Rev
	(dollars in millions)
Revenues
Gaming Equipment	$	339.8		34	%	$	310.7		35	%	$	246.6		33	%
Gaming Operations		405.0		41	%		357.4		41	%		318.6		42	%
Systems		252.2		25	%		211.7		24	%		193.0		25	%
Total revenues	$	997.0		100	%	$	879.8		100	%	$	758.2		100	%
Gross Margin
Gaming Equipment(1)	$	170.6		50	%	$	139.8		45	%	$	112.1		45	%
Gaming Operations		282.8		70	%		257.7		72	%		229.8		72	%
Systems(1)		192.6		76	%		155.9		74	%		142.6		74	%
Total gross margin	$	646.0		65	%	$	553.4		63	%	$	484.5		64	%
Selling, general and administrative(2)		276.7		28	%		255.0		29	%		225.0		30	%
Research and development costs		111.1		11	%		96.2		11	%		88.1		12	%
Depreciation and amortization		22.7		3	%		22.8		3	%		19.9		3	%
Operating income(2)	$	235.5		24	%	$	179.4		20	%	$	151.5		20	%
Income from continuing operations	$	139.7		14	%	$	100.9		11	%	$	98.2		13	%

(1)

Gross Margin from Gaming Equipment and Systems excludes amortization related to certain intangibles, including core technology and license rights, which are included in depreciation and amortization.

(2)

SG&A expenses and operating income for the year ended June 30, 2012 were impacted by a loss contingency accrual of $10.0 million and impairment charges of $1.8 million.

Fiscal Year 2013 vs. Fiscal Year 2012

Total revenues increased $117.2 million, or 13%, in fiscal year 2013, when compared to fiscal year 2012, as a result of the following:

Gaming Equipment Revenue.    Gaming Equipment revenue increased by $29.1 million, or 9%, to approximately $339.8 million primarily as a result of:

•

a 15% increase in new gaming device sales to 19,007 units in fiscal year 2013, when compared to 16,504 units in the same period last year, driven by higher domestic replacement sales, including the shipment of 2,226 Canadian VLTs, as well as by the shipment of 1,943 units into the Illinois Video Gaming Terminal ("VGT") market; partially offset by

•

a 4% decrease in ASP to $16,411 in fiscal year 2013, when compared to $17,044 in the same period last year, due primarily to a higher mix of lower-ASP VLT and VGT units sold in the current fiscal year, and lower-ASP units sold in certain international markets, when compared to the same period last year.

Gaming Equipment Gross Margin.    Gross margin increased to 50% in fiscal year 2013 from 45% in the same period last year, due primarily to continued cost reductions on the Pro Series line of cabinets and sales mix.

41

Gaming Operations Revenue.    Gaming Operations revenue increased $47.6 million, or 13%, to approximately $405.0 million in fiscal year 2013, when compared to the same period last year, primarily as a result of:

•

an increase in participation and rental revenue due to an increase in our end of period installed base of games, the continuing placements of higher yield premium products, and newer and more popular game titles;

•

an increase in linked progressive revenue driven by a 38% increase in the installed base of games, when compared to the same period last year, due primarily to the introduction of our WAP link Cash Connection in late fiscal year 2012; and

•

the performance of our lottery systems due to increases in our end of period installed base of games due primarily to previously placed games at Resorts World Casino New York City which opened in late calendar year 2011.

Gaming Operations Gross Margin.    Gross margin decreased to 70% in fiscal year 2013 from 72% in the same period last year, due primarily to higher jackpot expense.

Systems Revenue.    Systems revenue increased $40.5 million, or 19%, to approximately $252.2 million in fiscal year 2013, when compared to the same period last year, which was comprised primarily of a $16.3 million, or 22%, increase in maintenance revenue due to the increased install base of customers on our systems, a $17.3 million, or 25%, increase in software and services revenue, and a $6.9 million, or 10%, increase in hardware revenue during the same period.

Systems Gross Margin.    Gross margin increased to 76% in fiscal year 2013 from 74% in the same period last year, primarily as a result of a change in the mix of products sold in the comparative periods including an increase in maintenance revenue and software and services revenue which involve minimal variable costs.

Selling, General and Administrative Expenses.    SG&A expenses increased $21.7 million, or 8%, in fiscal year 2013, when compared to the same period last year, due primarily to increases in payroll and related expenses, regulatory, bad debt expense, and other infrastructure expense to support key new markets. Payroll and related expenses increased due primarily to an increase in headcount in the comparative period as a result of our expansion in certain international markets, and certain compensation related to executive succession.

Research and Development Costs.    R&D costs increased $14.9 million, or 15%, in fiscal year 2013, when compared to the same period last year, due primarily to increased product development efforts requiring an increase in employees. R&D was consistent at 11% of total revenues in both periods.

Depreciation and Amortization Expense.    Depreciation and amortization expense decreased $0.1 million in fiscal year 2013, when compared to same period last year.

Fiscal Year 2012 vs. Fiscal Year 2011

Total revenues increased $121.6 million, or 16%, in fiscal year 2012, when compared to fiscal year 2011, as a result of the following:

Gaming Equipment Revenue.    Gaming Equipment revenue increased by $64.1 million, or 26%, to approximately $310.7 million primarily as a result of:

•

a 22% increase in new gaming device sales to 16,504 units in fiscal year 2012, when compared to 13,537 units in fiscal year 2011, reflecting our investments in ALPHA 2 and new game studios; and

42

•

an 8% increase in ASP to $17,044 in fiscal year 2012, when compared to $15,832 in fiscal year 2011, due primarily to the mix of products sold, including sales of the new Pro Series cabinets in fiscal year 2012 which made up approximately 86% of shipments, compared to 47% in the fiscal year 2011.

Gaming Equipment Gross Margin.    Gaming Equipment gross margin was consistent at 45% in both periods.

Gaming Operations Revenue.    Gaming Operations revenue increased $38.8 million, or 12%, to approximately $357.4 million in fiscal year 2012, when compared fiscal year 2011, primarily as a result of:

•

an increase in participation and rental revenue due to a 4% increase in our end of period installed base of rental and daily fee games from 14,315 games as of June 30, 2011 to 14,890 games as of June 30, 2012;

•

continuing placement of higher yield premium products, including Cash Spin, Hot Spin, Vegas Hits and Cash Wizard in fiscal year 2012;

•

an increase in wide-area progressive revenue due primarily to the introduction of our new wide-area progressive link Cash Connection in fiscal year 2012, which includes GREASE and Michael Jackson King of Pop, and the continued placement of our Betty Boop Love Meter, Golden Pharaoh and Money Vault games; and

•

the performance of our lottery systems due to increases fiscal year 2012 end of period installed base of games with the opening of Resorts World Casino in New York.

Gaming Operations Gross Margin.    Gross margin was consistent at 72% in both periods.

Systems Revenue.    Systems revenue increased $18.7 million, or 10%, to approximately $211.7 million in fiscal year 2012, when compared fiscal year 2011, which was comprised of:

•

a $9.8 million, or 15%, increase in maintenance revenue due to the increased install base of customers on our systems; and

•

a $16.5 million, or 31%, increase in software and services revenue, which was partially offset by a $7.6 million, or 10%, decrease in hardware revenue during the same period.

Systems Gross Margin.    Systems gross margin was consistent at 74% in both periods. Systems revenues for fiscal year 2012 were comprised of 32% hardware, 35% maintenance and 33% software and service revenue, as compared to 39% hardware, 34% maintenance and 27% software and services revenue in fiscal year 2011.

Selling, General and Administrative Expenses.    SG&A expenses increased $30.0 million, or 13%, in fiscal year 2012, when compared to fiscal year 2011, due primarily to increases in payroll and related expenses, regulatory, bad debt expense, and other infrastructure expense to support key new markets. Payroll and related expenses increased due primarily to an increase in headcount in the comparative period as a result of our expansion into international markets. Bad debt expense increased due primarily to an impairment of notes receivable of $1.8 million related to development financing. In addition, fiscal year 2012 includes a loss contingency accrual of $10.0 million related to several legal matters.

Research and Development Costs.    R&D costs increased $8.1 million, or 9%, in fiscal year 2012, when compared to fiscal year 2011, due primarily to increased product development efforts requiring an increase in employees. R&D decreased to 11% of total revenues, when compared with 12% in fiscal year 2011, with revenues growing faster than R&D expense growth, as past R&D efforts began to pay off with increased product acceptance among our customer base.

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Depreciation and Amortization Expense.    Depreciation and amortization expense increased $2.9 million, or 15%, in fiscal year 2012, when compared to the prior year, primarily as a result of year over year intangible asset additions.

Other Income (Expense), Income Tax Expense and Net Income (Loss) Attributable to Noncontrolling Interests

Other income (expense) and income tax expense from continuing operations and net income (loss) attributable to noncontrolling interests was as follows:

	Year Ended June 30,
	2013			2012			2011
	(in millions)
Other income (expense)
Interest income	$	5.3		$	5.2		$	5.0
Interest expense		(18.1	)		(17.4	)		(12.0	)
Loss on extinguishment of debt		—			—			(4.1	)
Other, net		(6.4	)		(2.8	)		3.0
Total other expense	$	(19.2	)	$	(15.0	)	$	(8.1	)
Income tax expense		(76.6	)		(63.5	)		(45.2	)
Net loss attributable to noncontrolling interests		(1.7	)		(0.2	)		(0.5	)

Fiscal Year 2013 vs. Fiscal Year 2012

Other Income (Expense).    Other expense increased $4.2 million, or 28%, in fiscal year 2013, when compared to the same period last year, due primarily to increases in interest expense and foreign currency translation losses during the same period. Losses on foreign currency translations were $6.7 million in fiscal year 2013, when compared to $3.4 million in the same period last year. Interest expense increased $0.7 million in fiscal year 2013, when compared to the same period last year, due primarily to an increase in the interest rate coupled with the increase in long term debt upon entering into the second amended and restated credit agreement in April 2013.

Income Tax Expense.    Income tax expense increased $13.1 million during fiscal year 2013, when compared to the same period last year, due primarily to the increase in net income partially offset by a lower income tax rate during fiscal year 2013. Fiscal year 2013 was impacted by the reinstatement of the R&D tax credit. See Note 11 to the consolidated financial statements, Income Taxes. The effective income tax rate for continuing operations for fiscal years 2013 and 2012 was 35.4% and 38.6%, respectively.

Net loss attributable to noncontrolling interests.    Net loss attributable to noncontrolling interests increased $1.5 million in fiscal year 2013, when compared to the same period last year, due to higher jackpot expense.

Fiscal Year 2012 vs. Fiscal Year 2011

Other Income (Expense).    Other expense increased $6.9 million, or 85%, in fiscal year 2012, when compared to fiscal year 2011, due primarily to increases in interest expense and foreign currency translation losses during the same period. Losses on foreign currency translations were $3.4 million in fiscal year 2012, when compared to gains on foreign currency translations of $2.5 million in fiscal year 2011. Interest expense increased $5.4 million in fiscal year 2012, when compared to the prior year, due primarily to the increase in long term debt upon entering into the amended and restated credit agreement in April 2011. As a result of amending and restating the credit facility, we incurred a loss on extinguishment of debt of $4.1 million for the write-off of certain debt issue costs in fiscal year 2011.

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Income Tax Expense.    Income tax expense increased $18.3 million during fiscal year 2012, when compared to fiscal year 2011, due primarily to the increase in net income. Fiscal year 2011 was impacted by certain changes in our uncertain tax positions primarily resulting from settlement of the Internal Revenue Service ("IRS") examination of our 2003 to 2005 income tax returns, the reinstatement of the R&D tax credit and deferred tax expense on the repatriation of earnings from our India subsidiary. See Note 11 to the consolidated financial statements, Income Taxes. The effective income tax rate for continuing operations for fiscal years 2012 and 2011 was 38.6% and 31.5%, respectively.

Net loss attributable to noncontrolling interests.    Net loss attributable to noncontrolling interests decreased $0.3 million in fiscal year 2012, when compared to fiscal year 2011.

Discontinued Operations

Effective June 8, 2010, we sold the Rainbow Casino for approximately $80.0 million in an all-cash transaction. We recognized a gain on the sale of Rainbow of approximately $22.1 million (net of approximately $12.2 million in income taxes) in the fourth quarter of fiscal year 2010. Per the terms of the sale agreement, we incurred certain post-closing adjustments during fiscal year 2011 which reduced our gain on the sale by approximately $0.4 million (net of income taxes). The results of operations for fiscal years 2011 were classified as discontinued operations because we did not continue to receive significant cash flows from the Rainbow Casino after the sale.

Financial Condition and Liquidity

Working Capital

					Increase (decrease)
	June 30, 2013		June 30, 2012
					Amount			%
	(dollars in 000s)
Cash and cash equivalents	$	63,220	$	32,673	$	30,547			93	%
Total long-term debt, including current maturities	$	604,615	$	511,466	$	93,149			18	%
Total current assets	$	493,077	$	480,459	$	12,618			3	%
Total current liabilities		226,935		214,037		12,898			6	%
Net working capital	$	266,142	$	266,422	$	(280	)		—

Our net working capital was consistent for the years ended June 30, 2013 and 2012. As of June 30, 2013 and 2012, we had $63.2 million and $32.7 million, respectively, in consolidated cash and cash equivalents.

Pursuant to various state gaming regulations, certain cash accounts are maintained to ensure availability of funds to pay wide-area progressive jackpot awards in installments, rather than in one lump-sum. At June 30, 2013 and 2012, these accounts had an aggregate value of approximately $12.9 million and $13.6 million, respectively, which are classified as restricted cash in our consolidated balance sheets. In addition, we purchase U.S. Treasury Strip Securities for the benefit of jackpot winners who elect to receive winnings in annual or weekly installment payments. These securities are included in restricted long-term investments in the accompanying consolidated balance sheets, and totaled $14.8 million and $12.2 million as of June 30, 2013 and 2012, respectively.

On June 30, 2013 and 2012, the amount of cash and investments held by foreign subsidiaries was $38.1 million and $22.6 million, respectively. If these funds are needed for our operations in the U.S., we would be required to accrue and pay U.S. taxes to repatriate these funds.

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Total current and long-term accounts and notes receivable decreased $6.7 million during fiscal year 2013, when compared to the same period last year, due primarily to a customer exercise of an accelerated payment contract election during the second quarter of fiscal year 2013. As of June 30, 2013, our DSO's decreased to 106 days at June 30, 2013 from 113 days at June 30, 2012 due to an increase in collections.

During fiscal year 2013, we repurchased 5.2 million shares of our common stock for approximately $280.1 million under our share repurchase plan. On April 24, 2013, we entered into an accelerated share repurchase agreement with J.P. Morgan Securities LLC ("JPMorgan") under which we paid JPMorgan $150.0 million and JPMorgan delivered approximately 2.3 million shares of our common stock on April 26, 2013, representing a substantial majority of the shares expected to be repurchased under the agreement. Upon final settlement of the agreement, which is expected in the first quarter of fiscal 2014, we may receive additional shares or pay additional cash or shares (at our option) based on a discount to the average of the daily volume weighted average price of our common stock during the repurchase period. During fiscal year 2012, we repurchased 3.9 million shares of our common stock for approximately $154.6 million under our share repurchase programs.

On April 15, 2011, we entered into an amended and restated credit agreement that provides for a five-year $700 million senior secured credit facility comprised of a $300 million term loan and a $400 million revolving credit facility. On April 19, 2013, we entered into an second amended and restated credit agreement, that provides for a five-year $1.07 billion senior secured credit facility comprised of a $370 million term loan and a $700 million revolving credit facility, including a $50 million sublimit for the issuance of standby letters of credit, a $10 million sublimit for swingline loans and a $150 million sublimit for multicurrency borrowings approved under the credit facility.

The interest rate on the credit facility is subject to a leverage-based pricing grid that ranges from LIBOR plus a margin of 1.25% to 2.00% based on a leverage ratio between 1.0 and 2.5. As of June 30, 2013, our leverage ratio was approximately 1.8 and the interest rate was priced at LIBOR plus a margin of 1.50%.

Effective December 2008, we entered into a floating-to-fixed interest rate swap agreement with an original notional value of $218.8 million that matured on September 26, 2012. Effective June 2011, we entered into a second floating-to-fixed rate swap agreement with an original notional value of $165.0 million and a maturity date of May 13, 2016 to fix a portion of the floating LIBOR based debt under the term loan to fixed rate debt at an interest rate of 2.09% (plus applicable margin). The second interest swap has an accreting and subsequently amortizing notional amount in order to hedge the targeted amount of debt over the life of the swap. At June 30, 2013 the remaining swap agreement and at June 30, 2012, the swap agreements had a notional value of $264.4 million and $281.3 million, respectively.

Under the credit facility, the term loan requires quarterly principal reductions in an amount equal to $5,625,000 through March 2014; $7,500,000 from June 2014 through March 2016; $5,000,000 from June 2016 until the term loan's maturity in April 2018 when the remaining outstanding principal balance of $247,500,000 is due.

The credit facility is collateralized by substantially all of our domestic property and is guaranteed by each of our domestic subsidiaries, excluding any noncontrolling interests, and is secured by a pledge agreement and contains a number of covenants as described under Note 7 to the consolidated financial statements, Long-Term Debt. We were in compliance with all of the credit facility covenants as of June 30, 2013 and 2012.

As of June 30, 2013 and 2012, there was approximately $460.0 million and $170.0 million, respectively, of undrawn availability under the revolving credit facility. Availability under the revolving credit facility is reduced to the extent of outstanding letters of credit.

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Management believes that cash flows from current operating activities will provide us with sufficient capital resources and liquidity to operate our business for at least the next 12 months.

At June 30, 2013, we had no material commitments for capital expenditures.

Cash Flow Summary

Our primary sources of liquidity include existing cash and cash equivalents, cash flows from all operating activities and the availability of funds under our revolving credit facility.

We utilize our cash to acquire materials for the manufacture of goods for resale, to pay payroll, interest, taxes and SG&A expenses and to fund R&D activities.

Cash flows provided by operating activities were $205.4 million in fiscal year 2013 as compared to $131.0 million in the same period last year, a $74.4 million increase. Cash provided by operating activities were positively impacted by improvements in net income, accounts and notes receivable, and inventory, and were partially offset by changes in prepaid and refundable income tax, accounts payable and accrued liabilities and jackpot liabilities during the same period.

Cash utilized for investing activities is primarily for capital expenditures related to office and gaming equipment and improvements in leaseholds, financing arrangements with customers, acquisitions, and investments in technology and other long-term assets. During fiscal year 2013, we made payments for capital expenditures of $16.8 million and purchased long-term assets of $1.9 million. During fiscal year 2012, we made payments of $10.5 million related to acquisitions and made capital expenditures and purchased long-term assets of $11.5 million and $8.3 million, respectively.

Cash utilized for financing activities is primarily for the payment of principal on our debt and the repurchase of shares of our common stock. During fiscal year 2013, we repurchased 5.4 million shares of our common stock for approximately $292.4 million (including restricted stock forfeitures to satisfy tax withholding and the reversal of a prior year accrual), paid debt issuance costs of $4.9 million, and made payments of $107.0 million on our credit facility. During fiscal year 2012, we repurchased 3.9 million shares of our common stock for approximately $154.2 million, and made payments of $45.0 million on our credit facility. An additional 47,000 shares of our common stock were repurchased for $2.1 million with trade dates in late June that settled in early July.

Cash provided by financing activities is primarily from proceeds from the exercise of stock options and purchases of stock under our 2008 Employee Stock Purchase Plan (the "2008 ESPP"), borrowings under our revolving credit facility, and excess tax benefits of stock option exercises. During fiscal year 2013, we borrowed $200.0 million under our credit facility and employees exercised options for $32.4 million and purchased common stock for $3.2 million under our 2008 ESPP. During fiscal year 2012, we borrowed $41.0 million under our revolving credit facility, and employees exercised options for $23.3 million and purchased common stock for $2.6 million under our 2008 ESPP.

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Contractual Commitments

We are committed to make future payments pursuant to various contracts and agreements. A summary of those contractual obligations existing as of June 30, 2013, grouped according to the periods in which such payments are due, is as follows:

	Payments Due By Period
	Less than 1 year		1-3 years		3-5 years		More than 5 years		Total
	(in 000s)
Debt:
Revolving credit facility	$	—	$	—	$	240,000	$	—	$	240,000
Term loan facility(1)		24,375		57,500		282,500		—		364,375
Other, generally unsecured debt		240		—		—		—		240
	$	24,615	$	57,500	$	522,500	$	—	$	604,615
Estimated interest payments(2)		16,251		29,475		23,701		—		69,427
	$	40,866	$	86,975	$	546,201	$	—	$	674,042
Other commitments:
Operating leases(3)		8,872		11,746		4,251		521		25,390
Purchase commitments(4)		—		—		—		—		—
Jackpot liabilities(5)		11,731		1,535		1,105		6,392		20,763
Employment agreements(6)		825		1,203		—		—		2,028
Total commitments	$	62,294	$	101,459	$	551,557	$	6,913	$	722,223

(1)

Our term loan requires quarterly principal reductions in an amount of $5,625,000 through March 2014; an amount of $7,500,000 from June 2014 through March 2016; an amount of $5,000,000 from June 2016 until the term loan's maturity date in April 2018 when the remaining outstanding principal balance of $247,500,000 is due.

(2)

Loans under the credit facility bear interest at a variable rate of interest equal to either the applicable base rate or LIBOR, plus in each case an interest margin determined by the Company's leverage ratio, with a range of base rate margins from zero basis points to 100 basis points and a range of LIBOR margins from 100 basis points to 200 basis points. As of June 30, 2013, our leverage ratio was approximately 1.8, the interest rate on the revolving credit facility was 1.45%, and the interest rate on the term loan was 3.59%, after giving effect to the floating-to-fixed interest rate swap(s).

Effective December 2008, we entered into a floating-to-fixed interest rate swap agreement with an original notional value of $218.8 million that matured on September 26, 2012. Effective June 2011, we entered into a second floating-to-fixed rate swap agreement with an original notional value of $165.0 million and a maturity date of May 13, 2016 to fix a portion of the floating LIBOR based debt under the new term loan to fixed rate debt at an interest rate of 2.09% (plus applicable margin). The second interest swap has an accreting and subsequently amortizing notional amount in order to hedge the targeted amount of debt over the life of the swap. At June 30, 2013, the swap agreement had a notional value of $264.4 million.

We computed estimated future interest payments for our term loan and revolving credit facilities using interest rates as of June 30, 2013. The term loan facility interest rate includes the floating-to-fixed rate swap agreement for its remaining term assuming our leverage ratio continues to be between 1.5 and 2.0.

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(3)

Consists of operating leases for our facilities, autos and office equipment, less sublease income, if applicable, that expire at various times through fiscal year 2021.

(4)

Consisted of a commitment to purchase components related to the production of gaming devices which was fulfilled in May 2013 of which approximately $12.4 million of components were purchased in fiscal year 2013.

(5)

Represents amounts payable to future jackpot winners on our wide-area progressive systems.

(6)

We have employment agreements with most of our employees with positions of Vice President or above. These agreements generally provide for an initial rate of pay and other general employment terms. Some include post-employment non-compete provisions and the terms of the severance benefits generally range from three to twelve months salary continuation with similar non-compete periods. Almost all such agreements contain language that the employee is still an "at will" employee, and as such can be terminated at any time subject to the individual termination provisions. The only multi-year employment arrangement is with Ramesh Srinivasan, our CEO.

As of June 30, 2013, we had a liability for unrecognized tax benefits of $17.0 million, including accrued interest and penalties. It is difficult to estimate the period of cash settlement for the liability for unrecognized tax benefits; however we believe it is reasonably possible that the amount of unrecognized tax benefits may decrease in fiscal year 2013 by up to $9.5 million. See Note 11 to the consolidated financial statements, Income Taxes, for a further discussion on our income tax positions.

Off Balance Sheet Arrangements

We are party to financial instruments with off-balance sheet risk, such as performance bonds and other guarantees not reflected in our balance sheet that arise in the normal course of business. However, such off balance sheet arrangements are not reasonably likely to have a material effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or resources. See Note 8 to the consolidated financial statements, Leases.

Critical Accounting Policies

Our consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. Accordingly, we are required to make estimates incorporating judgments and assumptions we believe are reasonable based on our historical experience, contract terms, trends in our company and the industry as a whole, as well as information available from other outside sources. Our estimates affect amounts recorded in our consolidated financial statements and there can be no assurance that actual results will not differ from initial estimates. Our accounting policies are more fully described in Note 1 to the consolidated financial statements, Description of Business and Summary of Significant Accounting Principles.

We consider the following accounting policies to be the most important to understanding and evaluating our financial results. These policies require management to make subjective and complex judgments that are inherently uncertain or variable. We have discussed the development, selection and disclosure of our critical accounting policies and estimates with the Audit Committee of our Board of Directors.

Revenue recognition

Our policy is to record revenue when all of the following criteria have been satisfied:

•

Persuasive evidence of an arrangement exists;

•

The price or fee to the customer is fixed or determinable;

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•

Collectability is reasonably assured;

•

Delivery has occurred; and

•

No significant contractual obligations remain.

Revenues are reported net of incentive rebates, discounts, sales taxes, and all other items of a similar nature except for gaming industry taxes on certain Gaming Operations revenue. The gross amounts of these gaming taxes are not presented separately in the financial statements because they are not significant. For products sold under arrangements with extended payment terms the probability of collection is evaluated based on a review of the customer's credit worthiness and a review of historic collection experience on contracts with extended payment terms. As a result of such review, we recognize revenue on extended payment term arrangements when we have determined that collectability is reasonably assured and the fee is considered fixed and determinable.

Games placed with customers on a trial basis are recorded as revenue once the trial period has ended, the customer has accepted the games and all other revenue recognition criteria have been satisfied. Amounts billed to customers prior to completing the earnings process are deferred until the revenue recognition criteria are satisfied.

Considerable judgment is necessary to determine whether certain of our products are within the scope of software revenue recognition and whether the software and nonsoftware elements of these products function together to deliver the essential functionality. This determination dictates whether general revenue recognition guidance or software revenue recognition guidance applies which could impact the timing of revenue recognition.

Gaming Operations Revenue.    Gaming operations revenue consists of the operation of linked progressive systems and the rental of gaming devices, game content and the related systems placed with customers. Fees under these arrangements are earned and recognized based on a share of money wagered, a share of the net winnings, or on a fixed daily rate. The daily fee entitles the customer to full use of the gaming device and includes maintenance, licensing of the game content software and connection to a linked progressive system, where applicable. In certain markets, we also charge a daily system connection fee for the customer to connect to a central determination system and/or back-office system. We do not consider these arrangements to have multiple revenue-generating activities as the services offered are a comprehensive solution in exchange for a daily fee and all of the products and services are delivered contemporaneously. Gaming operations revenue is recognized under general revenue recognition guidance as the deliverables provide the customer with rights to use tangible gaming devices and software that is essential to the functionality of the gaming devices.

Gaming Equipment Revenue.    Gaming Equipment revenue is generated from the sale of gaming devices and licensing rights to game content software that is installed in the gaming device, parts, and other ancillary equipment. Arrangements may also include sales of game content conversion kits which enable customers to replace game content without purchasing a new gaming device. Gaming equipment arrangements do not include maintenance and product support fees beyond a standard warranty period. The recognition of revenue from the sale of gaming devices occurs as title and risk of loss have passed to the customer and all other revenue recognition criteria have been satisfied.

As the combination of game content software and the tangible gaming device function together to deliver the product's essential functionality, revenue from the sale of gaming devices is recognized under general revenue recognition guidance. Game content conversion kits are considered software deliverables and are recognized in accordance with software revenue recognition guidance.

Systems Revenue.    Systems revenue arrangements generally include a combination of systems software licenses, systems-based hardware products, maintenance and product support fees and professional services. The primary function of systems software licensed by us is to aid customers to more effectively

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run their business with marketing, data management and analysis, accounting, player tracking and security features.

Revenue for systems software and maintenance and product support fees is recognized under software revenue recognition guidance. Although the systems software and certain systems-based hardware function together, the primary functionality of the systems software is derived from the software and the systems software is not essential to the functionality of the systems-based hardware.

We license systems software on a perpetual basis or under time-based licenses. Revenue from perpetual license software is recognized at the inception of the license term provided all revenue recognition criteria have been satisfied. Revenue from maintenance and product support fees sold with perpetual licenses is recognized over the term of the support period. Our time-based licenses are generally for twelve month terms and are bundled with software maintenance and product support fees. All revenue from such arrangements is recognized over the term of the license.

Systems-based hardware includes embedded software that is essential to the functionality of the hardware. Accordingly, revenue related to all systems-based hardware sales and related maintenance and product support fees are recognized under general revenue recognition guidance. Revenue from the sale of systems-based hardware is generally recognized upon delivery when title and risk of loss have passed to the customer and all other revenue recognition criteria are satisfied. However, in the case of arrangements involving a systems installation, revenue on systems-based hardware is generally not recognized until the system has been installed and the customer has accepted the system. Hardware maintenance and product support fees are recognized on a straight-line basis over the term of the support period which is generally twelve months.

Software maintenance and product support provides customers with rights to unspecified software product upgrades, maintenance and patches released during the term of the support period. Our software maintenance and product support arrangements are generally for twelve month periods. Software maintenance and product support is recognized on a straight-line basis over the term of the support period.

Multiple Element Arrangements.    We enter into revenue arrangements that may consist of multiple deliverables of our products and services. For example, customers may enter into arrangements with us for the implementation of systems software and the sale of gaming devices. Arrangements for the implementation of systems software will generally include a combination of systems software licenses, systems-based hardware products, maintenance and product support fees, and professional services. Certain gaming equipment arrangements may also include the sale of gaming devices and game content conversion kits.

Revenue arrangements with multiple deliverables are allocated to separate units of accounting if the deliverables meet both of the following criteria:

•

The delivered items have value to the customer on a standalone basis. The items have value on a standalone basis if they are sold separately by any vendor or the customer could resell the delivered items on a standalone basis; and

•

If the arrangement includes a general right of return relative to the delivered items, delivery or performance of the undelivered items is considered probable and substantially in the control of us.

Considerable judgment is required to determine whether an arrangement consists of multiple deliverables, whether each delivered item has value to the customer on a stand-alone basis and in determining the relative selling price used to allocate the arrangement fee to each deliverable. Such determination affects the amount and timing of revenue recognition. Management evaluates the primary use and functionality of each deliverable in determining whether a delivered item has stand-

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alone value and qualifies as a separate unit of accounting. Judgments for revenue recognition also involve an assessment as to whether collectability is reasonably assured and whether fees under an arrangement are fixed or determinable.

At the inception of a multiple element arrangement, fees under the arrangement are allocated to the nonsoftware deliverables, and to the software deliverables as a group based on their relative selling price. Software deliverables are further subject to separation and allocation based on software revenue recognition guidance as described in the following paragraph. When applying the relative selling price method, a hierarchy is used for estimating the selling price based first on vendor-specific objective evidence ("VSOE"), then third-party evidence ("TPE") and finally management's estimate of the selling price ("ESP"). Revenue for each unit of accounting is recognized when the relevant recognition criteria for each respective element has been met.

In allocating arrangement fees under the relative selling price hierarchy, we use VSOE for all products which have been sold on a stand-alone basis or the stated renewal rate for maintenance and product support fees. As TPE is generally not available, we use ESP for products that are not sold on a stand-alone basis and for recently introduced products that are sold on a stand-alone basis but for which a history of stand-alone sales has not yet been developed. Following these guidelines, we use either VSOE or ESP for gaming devices, system-based hardware products, maintenance and product support fees associated with perpetual licenses and professional services; and ESP for perpetual and time-based software licenses and maintenance and product support fees associated with time-based licenses.

We use the residual method to recognize revenue allocated to software deliverables. Under the residual method, the fair value of the undelivered elements is deferred and the remaining portion of the arrangement fee is allocated to the delivered element and is recognized as revenue. In arrangements in which we do not have VSOE of fair value of all undelivered software elements, revenue is deferred until delivery occurs or VSOE of fair value has been established for any remaining undelivered software elements. In the event the only undelivered software element is maintenance and product support for which VSOE of fair value does not exist, the revenue is recognized ratably over the maintenance and product support period.

The establishment of VSOE requires judgment as to whether there is a sufficient quantity of items sold on a stand-alone basis and whether the prices demonstrate an appropriate level of concentration to conclude that VSOE exists. In determining ESP, management considers a variety of information including historic pricing and discounting practices, competitive market activity, internal costs, and the pricing and discounting practices of products sold in bundled arrangements.

Allowances for doubtful accounts

We regularly evaluate the credit quality of our accounts and notes receivable and establish an allowance for doubtful accounts based on a combination of factors including, but not limited to, customer collection experience, economic conditions, and the customer's financial condition. In addition to specific account identification, which includes the review of any modifications of accounts and notes receivable, if applicable, we utilize historic collection experience for the most recent twelve month period to establish an allowance for doubtful accounts. Receivables are written off only after we have exhausted all collection efforts.

During the years ended June 30, 2013, 2012 and 2011, the provision for doubtful accounts was $11.2 million, $9.9 million and $8.0 million, respectively.

Inventories

We regularly review inventory quantities and update estimates for the net realizable value of inventories to estimate potentially excess or obsolete inventory. Our process includes examining the

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carrying values of new and used gaming devices, parts and ancillary equipment in comparison to the current fair market values for such equipment (less costs to sell or dispose). The determination of obsolete or excess inventory requires us to estimate the future demand for our products within specific time horizons, generally one year or less. Additional factors involved in this analysis include the overall levels of our inventories, the costs required to sell the products, including refurbishment costs and importation costs for international shipments, and the overall projected demand for products once the next generation of products are scheduled for release. Demand for parts inventory is also subject to technical obsolescence.

As a result of our ongoing analysis of inventory, we recognized inventory write-downs totaling $6.1 million, $5.9 million and $3.6 million during the years ended June 30, 2013, 2012 and 2011, respectively. Additional valuation charges could occur in the future as a result of changes in the factors listed above.

Leased gaming equipment

Leased gaming equipment is stated at cost and depreciated over estimated useful lives ranging from one to three and one-half years. The estimation of useful lives for our leased gaming equipment requires judgment and is based on the period of time over which we believe the assets will be of economic benefit. Given changes in technology, customer preferences and product demand, we review and evaluate the recoverability of our investment in such assets on a quarterly basis, as well as the estimated useful lives used to depreciate these assets.

There is the potential for acceleration of future depreciation, or asset impairments, if conditions were to change and certain factors were determined to have an adverse impact on our ability to realize our full investment in such assets.

Impairment of long-lived assets and goodwill

We review long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets are measured by a comparison of the carrying amount of the asset to future, net cash flows expected to be generated by the asset, undiscounted and without interest. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

We review goodwill for impairment annually at the beginning of our fourth fiscal quarter, or whenever events or changes in circumstances indicate the carrying value may not be recoverable or warrant a revision to the estimated remaining useful life. We perform the impairment analysis of goodwill at a reporting unit level by comparing the fair value of a reporting unit with our carrying value, including goodwill. If the fair value is less than the carrying value, the impairment to be recognized is measured as the amount by which the carrying amount of the goodwill exceeds the fair value of the reporting unit goodwill.

We are required to make significant judgments and estimates regarding future cash flows, the determination of fair values and the identification of reporting units utilized in determining the fair value and recoverability of long-lived assets and goodwill. We believe our estimates are reasonable; however, if our estimates materially differ or factors utilized in developing our estimates change, different assumptions could materially affect our assessment of the fair value and recoverability of long-lived assets and goodwill.

During the years ended June 30, 2013, 2012 and 2011, no impairment charges related to long-lived assets or goodwill were recorded.

53

Share-based compensation

We account for share-based compensation based on the calculated fair value of the award measured on the grant date which is recognized, net of estimated forfeitures, as expense over the employee's requisite service period which is generally the vesting period of the equity grant.

Determining the appropriate fair value model and calculating the fair value of share-based awards requires the input of highly subjective assumptions including the expected option term and the expected volatility of our common stock over the option's expected term. We believe that the valuation technique and the approach utilized to develop the underlying assumptions are appropriate in calculating the fair values of stock options granted; however, if actual results differ significantly from these estimates, share-based compensation expense could be materially impacted.

In addition, we are required to estimate the expected forfeiture rate, and only recognize expense for those shares expected to vest. If our actual forfeiture rate is materially different from our estimate, the share-based compensation expense could be significantly different from what we have recorded. As a result, if factors change and we use different assumptions, our share-based compensation expense could be materially different in the future.

Pre-tax share-based compensation expense from continuing operations was $13.4 million, $14.2 million and $12.9 million during the years ended June 30, 2013, 2012 and 2011, respectively. As of June 30, 2013, there was $3.5 million of total unrecognized compensation expense related to the unvested portion of stock options which will be recognized over the subsequent 1.43 years. In addition, as of June 30, 2013, there was $20.5 million of total unrecognized compensation expense related to the unvested portion of restricted stock, Restricted Stock Units ("RSUs") and Performance Stock Units ("PSUs") which will be recognized over the subsequent 1.71 years.

Income taxes

We conduct business globally and are subject to income taxes in U.S. federal, state, local, and foreign jurisdictions. Determination of the appropriate amount and classification of income taxes depends on several factors, including estimates of the timing and probability of realization of deferred income taxes, reserves for uncertain income tax positions and income tax payment timing.

We account for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. Taxes on income of our foreign subsidiaries are provided at the tax rates applicable to the tax jurisdictions in which they are located.

We have not provided income taxes on approximately $15.2 million and $12.1 million of undistributed earnings as of June 30, 2013 and 2012, respectively, from certain foreign subsidiaries. We plan to permanently invest the earnings in the foreign subsidiaries and therefore have not recorded a deferred tax liability associated with the undistributed earnings. A determination of the potential deferred tax liability which would result from these earnings is not practicable at this time.

The recoverability of certain deferred tax assets is based in part on estimates of future income and the timing of temporary differences, and the failure to fully realize such deferred tax assets could result in a higher tax provision in future periods. Our net deferred tax assets from continuing operations totaled $56.1 million and $49.6 million at June 30, 2013 and 2012, respectively. Our accrued income taxes payable totaled $11.3 million and $12.2 million and our accrued income taxes receivable totaled $23.7 million and $25.8 million at June 30, 2013 and 2012, respectively. We have classified $1.8 million

54

of the accrued income taxes receivable at June 30, 2013 as long term as we do not expect collection of these amounts in the next twelve months.

We apply Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 740 "Accounting for Uncertainty in Income Taxes" to our uncertain tax positions. Under the guidance, we may recognize a tax benefit from an uncertain position only if it is more likely than not that the position will be sustained upon examination by taxing authorities based on the technical merits of the issue. The amount recognized in the financial statements is the largest benefit that we believe has greater than a 50% likelihood of being realized upon settlement.

We are required to make significant judgments when evaluating our uncertain tax positions and the related tax benefits. We believe our assumptions are reasonable; however, there is no guarantee that the final outcome of the related matters will not differ from the amounts reflected in our income tax provisions and accruals. We adjust our liability for uncertain tax positions based on changes in facts and circumstances such as the closing of a tax audit or changes in estimates. Our income tax provision may be impacted to the extent that the final outcome of these tax positions is different than the amounts recorded. As of June 30, 2013 and 2012, our liabilities for unrecognized tax benefits totaled $15.6 million and $12.7 million, respectively. Of these amounts, $15.5 million and $12.7 million, respectively, if recognized, would impact the effective tax rate.

Recently adopted accounting pronouncements

For a description of recently adopted accounting pronouncements, see Note 1 to the consolidated financial statements, Summary of Significant Accounting Policies.

Recently issued accounting pronouncements not yet adopted

For a description of recently issued accounting pronouncements not yet adopted, see Note 1 to the consolidated financial statements, Summary of Significant Accounting Policies.

ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

As of June 30, 2013, we had total debt outstanding of approximately $604.6 million which consisted primarily of a $364.4 million term loan and $240.0 million of borrowing under our revolving credit facility. During the year, the interest rate for the credit facility was subject to a leveraged based pricing grid. We have minimized our exposure to market interest rate risk because the variable interest rate on the term loan was effectively converted to a fixed rate as a result of the floating-to-fixed interest rate swaps entered into in December 2008 and June 2011, respectively, and discussed in Note 7 to the consolidated financial statements, Long-Term Debt. As of June 30, 2013, the interest rate on the revolving credit facility was 1.45% and the interest rate on our term loan was approximately 3.59%, after giving effect to our remaining interest rate swaps, given our leverage ratio was approximately 1.8 for the period. We estimate a hypothetical decline of 100 bps in applicable interest rates would have an immaterial impact on our business because we manage this exposure with derivative financial instruments.

Foreign Currency Exchange Rate Risk

Certain of our foreign subsidiaries use their local currency as their functional currency and are exposed to risks resulting from fluctuations in foreign currency exchange rates. During the years ended June 30, 2013 and 2012, we recognized foreign currency exchange rate losses of approximately $6.7 million and $3.4 million, respectively, and during the year ended June 30, 2011, we recognized a foreign currency exchange rate gain of approximately $2.5 million. We estimate that a hypothetical 10% strengthening

55

(or weakening) of the U.S. dollar for fiscal year 2013 would have had an immaterial impact on our business.

In addition, the net assets of these subsidiaries are exposed to foreign currency translation gains and losses which are included as a component of accumulated other comprehensive income in stockholders' equity in our Consolidated Balance Sheet. Such translation resulted in an unrealized loss of $4.0 million for fiscal year 2012 and an unrealized gain of $45,000 for fiscal year 2013.

We may enter into foreign currency forward contracts, generally with maturities of twelve months or less, to hedge recognized foreign currency assets and liabilities to reduce the reduce the risk that earnings and cash flows will be adversely affected by changes in foreign currency exchange rates. See Note 1 to the consolidated financial statements, Summary of Significant Policies (Fair value of financial instruments).

ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Our consolidated financial statements, including the notes thereto, and supplementary financial information are listed in Item 15, Exhibits and Financial Statement Schedules, and are included after the signature page hereto beginning at page F-1.

ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A.    CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) promulgated under the Exchange Act, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Exchange Act, as of the end of the period covered by this report.

Based on this evaluation our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2013.

It should be noted that any system of controls, however well designed and operated, can provide only reasonable and not absolute assurance that the objectives of the system will be met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected or that judgments in decision-making are not based on faulty input.

Management's Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) promulgated under the Exchange Act. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of an issuer's financial statements for external purposes in accordance with U.S. GAAP. Internal control over financial reporting includes policies and procedures that:

•

pertain to the maintenance of records that in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

56

•

provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures are being made only in accordance with authorizations of our management and our directors; and

•

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, the application of any evaluation of effectiveness to future periods is subject to the risk that controls may become inadequate because of changes in conditions, or that compliance with the policies or procedures may deteriorate.

Management evaluated the effectiveness of our internal control over financial reporting based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework. Based on this assessment, management concluded that our internal control over financial reporting was effective as of June 30, 2013. The attestation report issued by Deloitte & Touche LLP, an independent registered public accounting firm, on the effectiveness of our internal control over financial reporting is included in their audit opinion included on page F-2 of this Annual Report on Form 10-K.

Changes in Internal Control Over Financial Reporting during the Quarter Ended June 30, 2013

There were no changes in our internal control over financial reporting that occurred in the three months ended June 30, 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B.    OTHER INFORMATION

None.

57

PART III

ITEM 10.    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required under this Item is incorporated herein by reference to our definitive proxy statement to be filed with the SEC no later than 120 days after the close of our fiscal year ended June 30, 2013.

ITEM 11.    EXECUTIVE COMPENSATION

The information required under this Item is incorporated herein by reference to our definitive proxy statement to be filed with the SEC no later than 120 days after the close of our fiscal year ended June 30, 2013.

ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

All information, except the equity compensation plans table below, required under this Item is incorporated herein by reference to our definitive proxy statement to be filed with the SEC no later than 120 days after the close of our fiscal year ended June 30, 2013.

Equity Compensation Plans

The following table sets forth information as of June 30, 2013 with respect to our equity compensation plans under which our equity securities are authorized for issuance:

	Number of securities to be issued upon exercise of outstanding options and rights(1)		Weighted average exercise price of outstanding options and rights(1)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Plan Category
Equity compensation plans approved by security holders(2)		1,252,191	$	27.66		1,937,217	(3)

(1)

Rights include grants for Performance Stock Units that can be exercised for no consideration; the total weighted average exercise price excluding these rights would be $29.60.

(2)

We do not have any equity compensation plans not approved by security holders.

(3)

Includes 136,160 shares of common stock available for future issuance under the 2008 ESPP.

ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required under this Item is incorporated herein by reference to our definitive proxy statement to be filed with the SEC no later than 120 days after the close of our fiscal year ended June 30, 2013.

ITEM 14.    PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required under this item is incorporated herein by reference to our definitive proxy statement to be filed with the SEC no later than 120 days after the close of our fiscal year ended June 30, 2013.

58

PART IV

ITEM 15.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES

Documents filed as part of this Annual Report on Form 10-K:

1.

Financial Statements:

•

Report of Independent Registered Public Accounting Firm

•

Consolidated Balance Sheets as of June 30, 2013 and 2012

•

Consolidated Statements of Operations for the Years Ended June 30, 2013, 2012 and 2011

•

Consolidated Statements of Comprehensive Income for the Years Ended June 30, 2013, 2012 and 2011

•

Consolidated Statements of Stockholders' Equity for the Years Ended June 30, 2013, 2012 and 2011

•

Consolidated Statements of Cash Flows for the Years Ended June 30, 2013, 2012 and 2011

•

Notes to consolidated financial statements

2.

Financial Statement Schedules: Schedule II—Valuation and Qualifying Accounts for the years ended June 30, 2013, 2012 and 2011

3.

Exhibits:

Exhibit Number	Description
2.1	Agreement and Plan of Merger, dated July 15, 2013, by and among Bally Technologies, Inc., Manhattan Merger Corp., and SHFL entertainment, Inc., filed on July 18, 2013 as Exhibit 2.1 to the Current Report on Form 8-K of Bally Technologies, Inc. and incorporated herein by reference.
3.1	Restated Articles of Incorporation of Alliance Gaming Corporation, as amended, filed on May 7, 2004 as Exhibit 4.6 to the Registration Statement on Form S-8 (File No. 333-115271) of Alliance Gaming Corporation, and incorporated herein by reference.
3.2	Amendment to Amended and Restated Articles of Incorporation dated March 13, 2006, filed on August 29, 2012 as Exhibit 3.2 to the Annual Report on Form 10-K of Bally Technologies, Inc., and incorporated herein by reference.
3.3#	Certificate of Increase in Number of Authorized Shares of Common Stock of Alliance Gaming Corporation dated April 16, 2002.
3.4	Second Amended and Restated Bylaws of Bally Technologies, Inc., filed on October 22, 2012 as Exhibit 3.1 to the Current Report on Form 8-K of Bally Technologies, Inc., and incorporated herein by reference.
10.1	Amended and Restated Credit Agreement, dated as of April 15, 2011 among Bally Technologies, Inc., Bank of America, N.A. as Administrative Agent, Wells Fargo Bank, National Association and Union Bank, N.A., as Syndication Agents, JPMorgan Chase Bank, N.A., Key Bank National Association and U.S. Bank National Association, as Documentation Agents and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Wells Fargo Securities, LLC, and Union Bank, N.A. as Joint Lead Arrangers and Joint Book Managers and the other lenders party thereto, filed on April 18, 2011 as Exhibit 10.1 to the Current Report on Form 8-K of Bally Technologies, Inc., and incorporated herein by reference.

59

Exhibit Number	Description
10.2	Second Amended and Restated Credit Agreement, dated as of April 19, 2013 among Bally Technologies, Inc., Bank of America, N.A. as Administrative Agent, Wells Fargo Bank, National Association and Union Bank, N.A., as Syndication Agents, BBVA Compass, Fifth Third Bank, JPMorgan Chase Bank, N.A., Key Bank National Association and U.S. Bank National Association, as Documentation Agents, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Wells Fargo Securities, LLC, and Union Bank, N.A. as Joint Lead Arrangers and Joint Book Managers and the other lenders party thereto, filed on April 24, 2013 as Exhibit 10.1 to the Current Report on Form 8-K of Bally Technologies, Inc., and incorporated herein by reference.
10.3	Master Confirmation—Uncollared Accelerated Share Repurchase dated April 24, 2013, by and between J.P. Morgan Securities LLC and Bally Technologies, Inc., filed on May 6, 2013 as Exhibit 10.1 to the Quarterly Report on Form 10-Q of Bally Technologies, Inc., and incorporated herein by reference.
10.4*	Alliance Gaming Corporation 1996 Long Term Incentive Plan, filed on August 21, 1997 with the Registration Statement on Form S-8 (File No. 333-34077) of Alliance Gaming Corporation, and incorporated herein by reference.
10.5*	Bally Technologies, Inc. 2010 Long Term Incentive Plan, filed on May 4, 2010 as Exhibit 10.1 to the Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2010 of Bally Technologies, Inc., and incorporated herein by reference.
10.6*	Bally Technologies, Inc. Employee Stock Purchase Plan, filed on March 11, 2008 as Exhibit 4.8 to the Registration Statement on Form S-8 (File No. 333-149637) of Bally Technologies, Inc., and incorporated herein by reference.
10.7*	Amendment to the Bally Technologies, Inc. 2010 Long Term Incentive Plan, filed on March 31, 2011 as Exhibit 4.7 to the Registration Statement on Form S-8 (File No. 333-173190) of Bally Technologies, Inc., and incorporated herein by reference.
10.8*	Form of Stock Option Agreement under the 2001 Long Term Incentive Plan, filed on August 26, 2011 as Exhibit 10.6 to the Annual Report on Form 10-K for the fiscal year ended June 30, 2011 of Bally Technologies, Inc., and incorporated herein by reference.
10.9*	Form of Director Stock Option Agreement under the 2001 Long Term Incentive Plan, filed on August 26, 2011 as Exhibit 10.7 to the Annual Report on Form 10-K for the fiscal year ended June 30, 2011 of Bally Technologies, Inc., and incorporated herein by reference.
10.10*	Form of Director Stock Option Agreement under the 2001 Long Term Incentive Plan dated June 13, 2005, filed on August 26, 2011 as Exhibit 10.8 to the Annual Report on Form 10-K for the fiscal year ended June 30, 2011 of Bally Technologies, Inc., and incorporated herein by reference.
10.11*	Form of Notice of Grant of Stock Options and Option Agreement under the 2010 Long Term Incentive Plan, filed on August 26, 2010 as Exhibit 10.10 to the Annual Report on Form 10-K for the fiscal year ended June 30, 2010 of Bally Technologies, Inc., and incorporated herein by reference.
10.12*	Form of Notice of Grant of Award of Restricted Stock and Award Agreement under the 2010 Long Term Incentive Plan, filed on August 26, 2010 as Exhibit 10.11 to the Annual Report on Form 10-K for the fiscal year ended June 30, 2010 of Bally Technologies, Inc., and incorporated herein by reference.

60

Exhibit Number	Description
10.13*	Restricted Stock Agreement by and between Alliance Gaming Corporation and Richard Haddrill, dated as of June 30, 2004, filed on August 26, 2011 as Exhibit 10.11 to the Annual Report on Form 10-K for the fiscal year ended June 30, 2011 of Bally Technologies, Inc., and incorporated herein by reference.
10.14*	Stock Option Agreement by and between Alliance Gaming Corporation and Richard Haddrill, dated as of June 30, 2004, filed on August 26, 2011 as Exhibit 10.12 to the Annual Report on Form 10-K for the fiscal year ended June 30, 2011 of Bally Technologies, Inc., and incorporated herein by reference.
10.15*	Stock Option Agreement by and between Alliance Gaming Corporation and Richard Haddrill, dated as of October 27, 2004, filed on August 26, 2011 as Exhibit 10.13 to the Annual Report on Form 10-K for the fiscal year ended June 30, 2011 of Bally Technologies, Inc., and incorporated herein by reference.
10.16*	Restricted Stock Agreement by and between Alliance Gaming Corporation and Richard Haddrill, dated as of December 22, 2004, filed on August 26, 2011 as Exhibit 10.14 to the Annual Report on Form 10-K for the fiscal year ended June 30, 2011 of Bally Technologies, Inc., and incorporated herein by reference.
10.17*	Employment Agreement between Alliance Gaming Corporation and Richard Haddrill, dated as of June 30, 2004, filed on August 26, 2010 as Exhibit 10.16 to the Annual Report on Form 10-K for the fiscal year ended June 30, 2010 of Bally Technologies, Inc., and incorporated herein by reference.
10.18*	Amendment dated December 22, 2004, to the Employment Agreement by and between Alliance Gaming Corporation and Richard Haddrill, filed on August 26, 2010 as Exhibit 10.17 to the Annual Report on Form 10-K for the fiscal year ended June 30, 2010 of Bally Technologies, Inc., and incorporated herein by reference.
10.19*	Second Amendment to Employment Agreement by and between Alliance Gaming Corporation and Richard Haddrill, effective as of June 13, 2005, filed on August 26, 2011 as Exhibit 10.17 to the Annual Report on Form 10-K for the fiscal year ended June 30, 2011 of Bally Technologies, Inc., and incorporated herein by reference.
10.20*	Form of Third Amendment to Haddrill Employment Agreement dated June 20, 2006, by and between Bally Technologies, Inc. and Richard Haddrill, filed on August 26, 2011 as Exhibit 10.18 to the Annual Report on Form 10-K for the fiscal year ended June 30, 2011 of Bally Technologies, Inc., and incorporated herein by reference.
10.21*#	Form of Fourth Amendment to Haddrill Employment Agreement dated February 13, 2008, by and between Bally Technologies, Inc. and Richard Haddrill.
10.22*	Fifth Amendment to Haddrill Employment Agreement dated October 22, 2008, by and between Bally Technologies, Inc. and Richard Haddrill, filed on October 28, 2008 as Exhibit 10.1 to the Current Report on Form 8-K of Bally Technologies, Inc., and incorporated herein by reference.
10.23*	Sixth Amendment to Haddrill Employment Agreement dated December 30, 2008, by and between Bally Technologies, Inc. and Richard Haddrill, filed on August 26, 2010 as Exhibit 10.22 to the Annual Report on Form 10-K for the fiscal year ended June 30, 2010 of Bally Technologies, Inc., and incorporated herein by reference.

61

Exhibit Number	Description
10.24*	Seventh Amendment to Haddrill Employment Agreement dated August 10, 2009, by and between Bally Technologies, Inc. and Richard Haddrill, filed on August 26, 2010 as Exhibit 10.23 to the Annual Report on Form 10-K for the fiscal year ended June 30, 2010 of Bally Technologies, Inc., and incorporated herein by reference.
10.25*	Eighth Amendment to Haddrill Employment Agreement dated December 22, 2010, by and between Bally Technologies, Inc. and Richard Haddrill, filed on December 27, 2010 as Exhibit 10.1 to the Current Report on Form 8-K of Bally Technologies, Inc., and incorporated herein by reference.
10.26*	Non-Executive Chairman Agreement dated November 14, 2012, by and between Bally Technologies, Inc. and Richard Haddrill, filed on November 20, 2012 as Exhibit 10.2 to the Current Report on Form 8-K of Bally Technologies, Inc., and incorporated herein by reference.
10.27*	Executive Employment Agreement dated November 14, 2012 by and between Bally Technologies, Inc. and Ramesh Srinivasan, filed on November 20, 2012 as Exhibit 10.1 to the Current Report on Form 8-K of Bally Technologies, Inc., and incorporated herein by reference.
10.28*#	Restricted Stock Unit Agreement by and between Bally Technologies, Inc. and Ramesh Srinivasan, dated as of December 14, 2012.
10.29*#	Restricted Stock Unit Agreement by and between Bally Technologies, Inc. and Ramesh Srinivasan, dated January 24, 2013.
10.30*	Letter Agreement dated August 12, 2010 by and between Bally Technologies, Inc. and Neil Davidson, filed on August 17, 2010 as Exhibit 10.1 to the Current Report on Form 8-K of Bally Technologies, Inc., and incorporated herein by reference.
10.31*	Employment Agreement dated August 15, 2000 between Alliance Gaming Corporation and Mark Lerner, filed on August 20, 2009 as Exhibit 10.25 to the Annual Report on Form 10-K for the fiscal year ended June 30, 2009 of Bally Technologies, Inc., and incorporated herein by reference.
10.32*	Employment Agreement dated December 6, 2011, by and between Bally Technologies, Inc. and Derik Mooberry, filed on December 12, 2011 as Exhibit 10.1 to the Current Report on Form 8-K of Bally Technologies, Inc., and incorporated herein by reference.
21#	Subsidiaries of the Registrant.
23.1#	Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm.
31.1#	Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a).
31.2#	Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a).
32.1#	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350.
32.2#	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350.
101.INS#	XBRL Instance Document.
101.SCH#	XBRL Taxonomy Extension Schema Document.
101.CAL#	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF#	XBRL Taxonomy Extension Definition Linkbase Document.

62

Exhibit Number	Description
101.LAB#	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE#	XBRL Taxonomy Extension Presentation Linkbase Document.

*

Denotes management contract or compensatory plan or arrangement.

#

Filed herewith.

63

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BALLY TECHNOLOGIES, INC.    DATED: August 27, 2013
By	/s/ RAMESH SRINIVASAN Ramesh Srinivasan Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Name	Title	Date
/s/ RAMESH SRINIVASAN Ramesh Srinivasan	Chief Executive Officer and Director (Principal Executive Officer)	August 27, 2013
/s/ NEIL P. DAVIDSON Neil P. Davidson	Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)	August 27, 2013
/s/ ROBERT L. GUIDO Robert L. Guido	Director	August 27, 2013
/s/ RICHARD M. HADDRILL Richard M. Haddrill	Director and Chairman of the Board	August 27, 2013
/s/ JOSEPHINE LINDEN Josephine Linden	Director	August 27, 2013
/s/ W. ANDREW MCKENNA W. Andrew McKenna	Director	August 27, 2013
/s/ DAVID ROBBINS David Robbins	Director	August 27, 2013
/s/ KEVIN VERNER Kevin Verner	Director	August 27, 2013

64

BALLY TECHNOLOGIES, INC.
INDEX TO FINANCIAL INFORMATION

	Page No.
Financial Statements and Financial Statement Schedule
Report of independent registered public accounting firm	F-2
Consolidated balance sheets at June 30, 2013 and June 30, 2012	F-4
Consolidated statements of operations for the years ended June 30, 2013, 2012 and 2011	F-5
Consolidated statements of comprehensive income for the years ended June 30, 2013, 2012 and 2011	F-6
Consolidated statements of stockholders' equity for the years ended June 30, 2013, 2012 and 2011	F-7
Consolidated statements of cash flows for the years ended June 30, 2013, 2012 and 2011	F-8
Notes to consolidated financial statements	F-10
Financial statement schedule II—Valuation and Qualifying Accounts for the years ended June 30, 2013, 2012 and 2011	F-46

All other schedules are omitted because the required information is not present in amounts sufficient to require submission of the applicable schedule or because the information required is included in the Consolidated Financial Statements and Notes thereto.

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Bally Technologies, Inc.
Las Vegas, Nevada

We have audited the accompanying consolidated balance sheets of Bally Technologies, Inc. and subsidiaries (the "Company") as of June 30, 2013 and 2012, and the related consolidated statements of operations, comprehensive income, stockholders' equity, and cash flows for each of the three years in the period ended June 30, 2013. Our audits also included the financial statement Schedule II—Valuation and Qualifying Accounts for each of the three years in the period ended June 30, 2013. We also have audited the Company's internal control over financial reporting as of June 30, 2013, based on criteria established in Internal Control—Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company's management is responsible for these financial statements and financial statement schedule, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying management's report on internal control over financial reporting. Our responsibility is to express an opinion on these financial statements and financial statement schedule and an opinion on the Company's internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

F-2

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Bally Technologies, Inc. and subsidiaries as of June 30, 2013 and 2012, and the results of their operations and their cash flows for each of the three years in the period ended June 30, 2013, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2013, based on the criteria established in Internal Control—Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

/s/ DELOITTE & TOUCHE LLP

Las Vegas, Nevada
August 27, 2013

F-3

BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2013 AND 2012

	June 30, 2013			June 30, 2012
	(in 000s, except share amounts)
ASSETS
Current assets:
Cash and cash equivalents	$	63,220		$	32,673
Restricted cash		12,939			13,645
Accounts and notes receivable, net of allowances for doubtful accounts of $14,813 and $14,073		248,497			264,842
Inventories		68,407			75,066
Prepaid and refundable income tax		21,845			13,755
Deferred income tax assets		38,305			42,822
Deferred cost of revenue		22,417			17,615
Prepaid assets		14,527			13,061
Other current assets		2,920			6,980
Total current assets		493,077			480,459
Restricted long-term investments		14,786			12,171
Long-term accounts and notes receivables, net of allowances for doubtful accounts of $1,764 and $3,029		65,456			55,786
Property, plant and equipment, net		35,097			30,667
Leased gaming equipment, net		113,751			121,151
Goodwill		172,162			171,971
Intangible assets, net		25,076			39,166
Deferred income tax assets		17,944			7,409
Income tax receivable		1,837			12,041
Deferred cost of revenue		12,105			16,542
Other assets, net		27,974			23,104
Total assets	$	979,265		$	970,467
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	25,863		$	41,414
Accrued and other liabilities		91,127			85,310
Jackpot liabilities		11,731			11,682
Deferred revenue		62,254			46,314
Income tax payable		11,345			12,226
Current maturities of long-term debt		24,615			17,091
Total current liabilities		226,935			214,037
Long-term debt, net of current maturities		580,000			494,375
Deferred revenue		23,696			26,715
Other income tax liability		12,658			13,922
Other liabilities		16,804			23,943
Total liabilities		860,093			772,992
Commitments and contingencies (Note 12)
Stockholders' equity:
Special stock, 10,000,000 shares authorized: Series E, $100 liquidation value; 0 and 115 shares issued and outstanding		—			12
Common stock, $.10 par value; 100,000,000 shares authorized; 65,318,000 and 63,150,000 shares issued and 38,855,000 and 42,102,000 outstanding		6,523			6,309
Treasury stock at cost, 26,463,000 and 21,048,000 shares		(1,058,381	)		(790,633	)
Additional paid-in capital		535,759			489,002
Accumulated other comprehensive loss		(10,692	)		(13,477	)
Retained earnings		646,339			504,895
Total Bally Technologies, Inc. stockholders' equity		119,548			196,108
Noncontrolling interests		(376	)		1,367
Total stockholders' equity		119,172			197,475
Total liabilities and stockholders' equity	$	979,265		$	970,467

See accompanying notes to consolidated financial statements.

F-4

BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE YEARS ENDED JUNE 30, 2013

	2013			2012			2011
	(in 000s, except per share amounts)
Revenues:
Gaming equipment and systems	$	592,061		$	522,342		$	439,534
Gaming operations		404,978			357,417			318,621
		997,039			879,759			758,155
Costs and expenses:
Cost of gaming equipment and systems(1)		228,805			226,636			184,836
Cost of gaming operations		122,188			99,680			88,820
Selling, general and administrative		276,685			255,043			225,033
Research and development costs		111,118			96,182			88,086
Depreciation and amortization		22,733			22,775			19,845
		761,529			700,316			606,620
Operating income		235,510			179,443			151,535
Other income (expense):
Interest income		5,328			5,221			4,960
Interest expense		(18,120	)		(17,378	)		(11,984	)
Loss on extinguishment of debt		—			—			(4,119	)
Other, net		(6,443	)		(2,827	)		3,001
Income from continuing operations before income taxes		216,275			164,459			143,393
Income tax expense		(76,574	)		(63,549	)		(45,182	)
Income from continuing operations		139,701			100,910			98,211
Discontinued operations:
Loss on sale of discontinued operations, net of tax		—			—			(403	)
Loss from discontinued operations, net of tax		—			—			(403	)
Net income		139,701			100,910			97,808
Less net loss attributable to noncontrolling interests		(1,743	)		(238	)		(455	)
Net income attributable to Bally Technologies, Inc.	$	141,444		$	101,148		$	98,263
Basic earnings per share attributable to Bally Technologies, Inc.:
Income from continuing operations	$	3.53		$	2.35		$	1.90
Loss on sale of discontinued operations		—			—			(0.01	)
Basic earnings per share	$	3.53		$	2.35		$	1.89
Diluted earnings per share attributable to Bally Technologies, Inc.:
Income from continuing operations	$	3.45		$	2.28		$	1.82
Loss on sale of discontinued operations		—			—			(0.01	)
Diluted earnings per share	$	3.45		$	2.28		$	1.81
Weighted average shares outstanding:
Basic		40,120			42,985			51,960
Diluted		40,992			44,420			54,420
Amounts attributable to Bally Technologies, Inc.:
Income from continuing operations, net of tax	$	141,444		$	101,148		$	98,666
Loss on sale of discontinued operations, net of tax		—			—			(403	)
Net income	$	141,444		$	101,148		$	98,263

(1)

Cost of gaming equipment and systems exclude amortization related to certain intangibles, including core technology and license rights, which are included in depreciation and amortization.

See accompanying notes to consolidated financial statements.

F-5

BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE YEARS ENDED JUNE 30, 2013

	2013			2012			2011
	(in 000s)
Net income	$	139,701		$	100,910		$	97,808
Other comprehensive income (loss):
Foreign currency translation adjustment before income taxes		45			(3,959	)		762
Income tax expense		—			—			—
Foreign currency translation adjustment		45			(3,959	)		762
Unrealized gain (loss) on derivative financial instruments before income taxes		4,216			(9,930	)		(1,204	)
Income tax (expense) benefit		(1,476	)		3,476			422
Unrealized gain (loss) on derivative financial instruments		2,740			(6,454	)		(782	)
Total other comprehensive income (loss), net of income taxes		2,785			(10,413	)		(20	)
Comprehensive income		142,486			90,497			97,788
Less: comprehensive loss attributable to noncontrolling interests		(1,743	)		(238	)		(455	)
Comprehensive income attributable to Bally Technologies, Inc.	$	144,229		$	90,735		$	98,243

See accompanying notes to consolidated financial statements.

F-6

BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

FOR THE THREE YEARS ENDED JUNE 30, 2013

														Accumulated Other Comprehensive Income (Loss) ("OCI")
	Common Stock
					Series E Special Stock			Treasury Stock			Additional Paid-In Capital						Retained Earnings			Noncontrolling Interests			Total Stockholders' Equity
	Shares		Dollars
	(in 000s)
Balances at June 30, 2010		59,495	$	5,943	$	12		$	(157,053	)	$	392,853		$	(3,044	)	$	303,100		$	2,381		$	544,192
Income from continuing operations, net of tax		—		—		—			—			—			—			98,666			(455	)		98,211
Loss on sale of discontinued operations, net of tax		—		—		—			—			—			—			(403	)		—			(403	)
Foreign currency translation adjustment		—		—		—			—			—			762			—			—			762
Unrealized loss on derivative financial instruments, net of tax		—		—		—			—			—			(782	)		—			—			(782	)
Total comprehensive income		—		—		—			—			—			—			—			—		$	97,788
Distributions to noncontrolling interests		—		—		—			—			—			—			—			(239	)		(239	)
Issuance and receipt of restricted stock, ESPP shares, stock options and related tax and tax benefit		2,046		206		—			(3,161	)		36,953			—			—			—			33,998
Purchase of common stock for treasury		—		—		—			(474,054	)		—			—			—			—			(474,054	)
Share-based compensation		—		—		—			—			12,907			—			—			—			12,907
Balances at June 30, 2011		61,541	$	6,149	$	12		$	(634,268	)	$	442,713		$	(3,064	)	$	401,363		$	1,687		$	214,592
Income from continuing operations, net of tax		—		—		—			—			—			—			101,148			(238	)		100,910
Foreign currency translation adjustment		—		—		—			—			—			(3,959	)		—			—			(3,959	)
Unrealized loss on derivative financial instruments, net of tax		—		—		—			—			—			(6,454	)		—			—			(6,454	)
Total comprehensive income		—		—		—			—			—			—			—			—		$	90,497
Distributions to noncontrolling interests		—		—		—			—			—			—			—			(82	)		(82	)
Cumulative effect of adoption of ASU 2010-16 for change in jackpot accounting		—		—		—			—			—			—			2,384			—			2,384
Issuance and receipt of restricted stock, ESPP shares, stock options and related tax and tax benefit		1,609		160		—			(1,720	)		32,117			—			—			—			30,557
Purchase of common stock for treasury		—		—		—			(154,645	)		—			—			—			—			(154,645	)
Share-based compensation		—		—		—			—			14,172			—			—			—			14,172
Balances at June 30, 2012		63,150	$	6,309	$	12		$	(790,633	)	$	489,002		$	(13,477	)	$	504,895		$	1,367		$	197,475
Income from continuing operations, net of tax		—		—		—			—			—			—			141,444			(1,743	)		139,701
Foreign currency translation adjustment		—		—		—			—			—			45			—			—			45
Unrealized gain on derivative financial instruments, net of tax		—		—		—			—			—			2,740			—			—			2,740
Total comprehensive income		—		—		—			—			—			—			—			—		$	142,486
Purchase of Series E special stock		—		—		(12	)		—			—			—			—			—			(12	)
Issuance and receipt of restricted stock, ESPP shares, stock options and related tax and tax benefit		2,168		214		—			(10,099	)		55,877			—			—			—			45,992
Accelerated share repurchase forward contract		—		—		—			22,500			(22,500	)		—			—			—			—
Purchase of common stock for treasury		—		—		—			(280,149	)		—			—			—			—			(280,149	)
Share-based compensation		—		—		—			—			13,380			—			—			—			13,380
Balances at June 30, 2013		65,318	$	6,523	$	—		$	(1,058,381	)	$	535,759		$	(10,692	)	$	646,339		$	(376	)	$	119,172

See accompanying notes to consolidated financial statements.

F-7

BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE YEARS ENDED JUNE 30, 2013

	2013			2012			2011
	(in 000s)
Cash flows from operating activities:
Net income	$	139,701		$	100,910		$	97,808
Adjustments to reconcile net income to net cash provided by operating activities:
Loss on sale of discontinued operations, net of tax		—			—			403
Loss on extinguishment of debt		—			—			4,119
Depreciation and amortization		88,272			81,453			74,980
Amortization of deferred debt issuance costs		1,810			1,807			3,404
Share-based compensation		13,380			14,172			12,907
Provision for doubtful accounts		11,173			9,863			7,963
Inventory write-downs		6,130			5,902			3,623
Income tax (benefit) expense		(6,723	)		(5,986	)		18,811
Excess tax benefit of stock option exercises		(18,899	)		(5,523	)		(8,214	)
Other		2,333			3,949			(1,320	)
Change in operating assets and liabilities:
Accounts and notes receivable		1,084			(35,934	)		(46,647	)
Inventories		(54,832	)		(98,432	)		(101,797	)
Prepaid and refundable income tax and income tax payable		19,240			40,802			(24,849	)
Other current assets		(83	)		(7,111	)		(557	)
Accounts payable		(15,484	)		(2,693	)		14,615
Accrued and jackpot liabilities		5,374			15,376			3,393
Deferred revenue and deferred cost of revenue		12,896			12,428			(1,886	)
Net cash provided by operating activities		205,372			130,983			56,756
Cash flows from investing activities:
Acquisitions		—			(10,490	)		—
Capital expenditures		(16,802	)		(11,464	)		(13,202	)
Restricted cash and investments		(1,909	)		(4,913	)		474
Development financing provided to customers		(1,228	)		—			(9,940	)
Payments received from development financing		223			—			—
Additions to other long-term assets		(1,932	)		(8,331	)		(6,552	)
Net cash used in investing activities		(21,648	)		(35,198	)		(29,220	)
Cash flows from financing activities:
Proceeds from borrowing		100,000			—			300,000
Proceeds from revolving credit facility		100,000			41,000			250,884
Payments on revolving credit facility		(90,000	)		(30,000	)		(31,884	)
Capitalized debt issuance costs		(4,909	)		—			(7,118	)
Pay-off of debt from refinancing		—			—			(142,500	)
Payments on long-term debt and capital leases		(16,964	)		(15,040	)		(35,049	)
Acquisition-related contingent consideration		(1,351	)		—			—
Distributions to noncontrolling interests		—			(82	)		(239	)
Purchase of treasury stock and forward contract		(292,378	)		(154,235	)		(477,215	)
Purchase of series E special stock		(12	)		—			—
Excess tax benefit of stock option exercises		18,899			5,523			8,214
Proceeds from exercise of stock options and employee stock purchases		35,642			25,888			28,441
Net cash used in financing activities		(151,073	)		(126,946	)		(106,466	)
Effect of exchange rate changes on cash		(2,104	)		(2,591	)		669
Net cash used in operating activities of discontinued operations		—			—			(403	)
Cash and cash equivalents:
Increase (decrease) for year		30,547			(33,752	)		(78,664	)
Balance, beginning of year		32,673			66,425			145,089
Balance, end of year	$	63,220		$	32,673		$	66,425

See accompanying notes to consolidated financial statements.

F-8

BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2013

The following supplemental information is related to the consolidated statements of cash flows:

	Year Ended June 30,
	2013		2012		2011
	(in 000s)
Cash paid for interest	$	16,124	$	17,119	$	11,985
Cash paid for income taxes		63,693		29,297		46,132
Non-cash investing and financing transactions:
Transfer of inventory to leased gaming equipment(1)		74,840		104,512		87,307
Reclassify property, plant and equipment to inventory(1)		17,112		16,685		15,519
Liabilities assumed in acquisitions		—		5,395		—

(1)

As a result of the inability to separately identify the cash flows associated with the construction of leased gaming equipment, the Company has included all additions to leased gaming equipment as an increase in inventory under cash used in operating activities in the consolidated statement of cash flows. In addition, cash generated from the sale of used gaming equipment classified as leased gaming equipment is also included in cash provided by operating activities in the consolidated statement of cash flows. The Company has one process to procure raw materials for the assembly of both inventory and leased gaming equipment. The materials requisition planning process considers the number of devices the Company expects to build for sale and for use in gaming operations during a particular period, but it does not separately earmark purchases for leased gaming equipment. Without such an earmarking process, the Company is unable to determine whether the parts used to construct leased gaming equipment during a particular period came from inventory on hand at the beginning of the period or was constructed from inventory procured during the period of deployment, thus requiring the expenditure of cash.

F-9

BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.     DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Bally Technologies, Inc. ("Bally" or the "Company"), a Nevada corporation, is a diversified global gaming company that designs, manufactures, operates, and distributes advanced technology-based gaming devices, systems, server-based solutions, custom mobile applications, and interactive applications. The Company's innovations and technology solutions allow its customers to more effectively manage their operations using our wide range of marketing, data management and analysis, accounting, player tracking, security, and other software applications and tools. The Company also provides hardware, including spinning-reel and video gaming devices, specialty gaming devices, and wide-area progressive systems. Under its business-to-business model, the Company supports customers that include traditional land-based, riverboat, and Native American casinos, video lottery and central determination markets.

Principles of presentation and consolidation

The accompanying consolidated financial statements include the accounts of Bally Technologies, Inc., and its wholly owned and partially owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and, pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"), include all adjustments necessary to fairly present the Company's consolidated financial position, results of operations and cash flows for each period presented. References to specific U.S. GAAP within this report cite topics within the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC").

All intercompany accounts and transactions have been eliminated in consolidation.

Use of estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Discontinued Operations

The Company was the general partner of Rainbow Casino Vicksburg Partnership ("RCVP"), which operated the Rainbow Casino, a dockside riverboat casino in Vicksburg, Mississippi. On April 5, 2010, the Company entered into a definitive purchase agreement to sell the Rainbow Casino which closed on June 8, 2010. Per the terms of the sale agreement, the Company had certain post-closing adjustments during fiscal year 2011, which reduced its gain on the sale of the Rainbow Casino in fiscal year 2010 by approximately $0.4 million, net of income taxes. The Company's Casino Operations have been classified as discontinued operations in the accompanying financial statements.

Fair value of financial instruments

The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amounts reflected in the accompanying consolidated balance sheets for cash equivalents, accounts and notes receivable, investment securities to fund jackpot liabilities, accounts payable, jackpot liabilities and long-term debt approximate their respective fair values.

F-10

BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All financial assets and liabilities are recognized or disclosed at fair value using a fair value hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

There are three levels of inputs that may be used to measure fair value:

•

Level 1: quoted prices in active markets for identical assets or liabilities;

•

Level 2: inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or

•

Level 3: unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The carrying amounts reflected in the accompanying consolidated balance sheets for cash equivalents, accounts and notes receivable, investment securities to fund jackpot liabilities, accounts payable, jackpot liabilities and long-term debt approximate their respective fair values. Cash equivalents and investment securities to fund jackpot liabilities have Level 1 inputs with values based on quoted market prices. Accounts and notes receivable and jackpot liabilities have Level 3 inputs and were valued using Discounted Cash Flows ("DCF") incorporating expected future payment timing and current borrowing rates. Long-term debt has Level 2 inputs and was valued using DCF incorporating expected future payment timing and current borrowing rates.

The Company transacts business in various foreign currencies and has international sales and expenses denominated in foreign currencies, subjecting the Company to foreign currency risk. The Company enters into foreign currency forward contracts, generally with maturities of twelve months or less, to hedge recognized foreign currency assets and liabilities to reduce the risk that earnings and cash flows will be adversely affected by changes in foreign currency exchange rates. The gains or losses resulting from changes in the fair value of these forward contracts, which are not designated as accounting hedges, are reported in other income (expense) in the consolidated statements of operations, and generally offset the gains and losses associated with the underlying foreign-currency-denominated balances, which are also reported in other income (expense). As of June 30, 2013 and 2012, euro forward contracts for a total of $33.0 million and $38.0 million, respectively, or the notional equivalent of €25.3 million and €30 million, were outstanding. In addition, as of June 30, 2013, a pound sterling forward contract for $2.3 million, or the equivalent of £1.5 million, was outstanding.

The Company also uses interest rate derivatives to manage the interest expense generated by variable rate debt. See Note 7 to consolidated financial statements, Long-Term Debt.

F-11

BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company's derivative financial instruments are measured at fair value on a recurring basis, and the balances were as follows:

	Fair Value Measurements Using Input Type
	Level 1		Level 2		Level 3
	(in 000s)
As of June 30, 2013:
Other current assets:
Foreign currency derivative financial instrument	$	—	$	397	$	—
Liabilities:
Accrued and other liabilities:
Foreign currency derivative financial instrument	$	—	$	22	$	—
Interest rate derivative financial instruments	$	—	$	4,689	$	—
Other liabilities:
Interest rate derivative financial instrument	$	—	$	4,927	$	—

	Fair Value Measurements Using Input Type
	Level 1		Level 2		Level 3
	(in 000s)
As of June 30, 2012:
Other current assets:
Foreign currency derivative financial instrument	$	—	$	2,850	$	—
Liabilities:
Accrued and other liabilities:
Foreign currency derivative financial instrument	$	—	$	115	$	—
Interest rate derivative financial instruments	$	—	$	4,804	$	—
Other liabilities:
Interest rate derivative financial instrument	$	—	$	9,028	$	—

The valuation techniques used to measure the fair value of the derivative financial instruments above in which the counterparties have high credit ratings, were derived from pricing models, such as discounted cash flow techniques, with all significant inputs derived from or corroborated by observable market data. The Company's discounted cash flow techniques use observable market inputs, such as LIBOR-based yield curves and foreign currency forward rates.

Accounting for Derivative Instruments and Hedging Activity

The Company assesses, both at the inception of each hedge and on an on-going basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of the hedged items resulting in hedge accounting treatment. The interest rate derivative instruments meet these requirements and are accounted for as a cash flow hedges.

F-12

BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The impact of the cash flow hedge and non-designated foreign currency derivatives on the consolidated financial statements is depicted below:

	Amount of Loss Recognized in OCI on Derivative (Effective Portion)										Amount of Loss Reclassified From Accumulated OCI into Income (Effective Portion)
Cash Flow Hedging Derivative	Year Ended June 30, 2013			Year Ended June 30, 2012			Year Ended June 30, 2011			Location of Loss	Year Ended June 30, 2013			Year Ended June 30, 2012			Year Ended June 30, 2011
	(in 000s)										(in 000s)
Interest rate swap agreement	$	(921	)	$	(14,969	)	$	(3,661	)	Interest expense	$	(5,137	)	$	(5,039	)	$	(2,458	)

	Amount of Loss Recognized in Income on Derivative (Ineffective Portion)
Location of Loss	Year Ended June 30, 2013			Year Ended June 30, 2012		Year Ended June 30, 2011
	(in 000s)
Interest expense	$	(9	)	$	—	$	—

	Amount of Income (Loss) Recognized in Other Income (Expense)
Non-Designated Derivative	Year Ended June 30, 2013			Year Ended June 30, 2012		Year Ended June 30, 2011
	(in 000s)
Foreign Currency Forward Contract	$	(1,151	)	$	4,246	$	(135	)

Cash and cash equivalents

Cash and cash equivalents consist of highly liquid debt instruments purchased with an original maturity of three months or less at the date of purchase and are carried at cost, which approximates fair value.

Restricted cash

The Company maintains jackpot funds totaling approximately $12.9 million and $13.6 million at June 30, 2013 and 2012, respectively, to ensure availability of funds to pay wide-area progressive jackpot awards.

Accounts and notes receivable and allowances for doubtful accounts

Accounts and notes receivable are stated at face value less an allowance for doubtful accounts. The Company generally grants customers credit terms for periods of 30 to 120 days, but may also grant extended payment terms to some customers for periods generally up to three years, with interest generally at market rates.

F-13

BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company evaluates the credit quality of its accounts and notes receivable and establishes an allowance for doubtful accounts based on a combination of factors including, but not limited to, customer collection experience, economic conditions, and the customer's financial condition. In addition to specific account identification, which includes the review of any modifications of accounts and notes receivable, if applicable, the Company utilizes historic collection experience for the most recent twelve month period to establish an allowance for doubtful accounts. Receivables are written off only after the Company has exhausted all collection efforts.

Inventories

Inventories are stated at the lower of cost, determined on a first in, first out basis, or market. Cost elements included in work-in-process and finished goods include raw materials, direct labor and manufacturing overhead. Inventories consist of the following:

	June 30,
	2013		2012
	(in 000s)
Raw materials	$	42,464	$	50,498
Work-in-process		1,508		1,713
Finished goods		24,435		22,855
Total	$	68,407	$	75,066

The Company regularly reviews inventory quantities and updates estimates for the net realizable value of inventories to estimate potential excess or obsolete inventory. Our process includes examining the carrying values of new and used gaming devices, parts and ancillary equipment in comparison to the current fair market values for such equipment (less costs to sell or dispose). The determination of obsolete or excess inventory requires us to estimate the future demand for our products within specific time horizons, generally one year or less. Additional factors involved in this analysis include the overall levels of our inventories, the costs required to sell the products, including refurbishment costs, importation costs for international shipments, and the overall projected demand for products after release of the next generation of products. Demand for parts inventory is also subject to technical obsolescence.

The Company recorded inventory write-downs totaling approximately $6.1 million, $5.9 million and $3.6 million during the years ended June 30, 2013, 2012 and 2011, respectively. Additional valuation charges could occur in the future as a result of changes in the factors listed above. These charges are included in the cost of gaming equipment and systems in the consolidated statements of operations.

Deferred revenue and deferred cost of revenue

Deferred revenue arises from the timing differences between the shipment or installation of gaming equipment and systems products and the satisfaction of all revenue recognition criteria consistent with the Company's revenue recognition policy. Deferred cost of revenue consists of the direct costs associated with the manufacture of gaming equipment and systems products for which revenue has been deferred. Deferred revenue and deferred cost of revenue that are expected to be realized within one year are classified as current liabilities and current assets, respectively.

F-14

BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Restricted long-term investments

The Company purchases U.S. Treasury Strip Securities for the benefit of jackpot winners who elect to receive annual or weekly installment payments. These securities are held to maturity and recorded at cost plus interest accretion to date. Such securities are included in restricted long-term investments in the consolidated balance sheets, and totaled $14.8 million and $12.2 million as of June 30, 2013 and 2012, respectively.

Property, plant and equipment and leased gaming equipment

Property, plant and equipment is stated at cost and depreciated over the estimated useful lives or lease term, if less, using the straight line method as follows: buildings and improvements, ten years; furniture, fixtures and equipment, three to seven years; and leasehold improvements, the shorter of lease term or ten years. Leased gaming equipment is stated at cost and depreciated over the estimated useful lives ranging from one to three and one-half years. Depreciation and asset charges related to leased gaming equipment are recorded to cost of gaming operations in the consolidated statements of operations.

Significant replacements and improvements are capitalized while other maintenance and repairs are expensed. The cost and accumulated depreciation of assets retired or otherwise disposed of are eliminated from the accounts and any resulting gain or loss is credited or charged to income.

Depreciation and amortization expense

For the years ended June 30, 2013, 2012 and 2011, depreciation and amortization expense from continuing operations totaled $88.3 million, $81.5 million and $75.0 million, respectively. Of these amounts, $65.6 million, $58.7 million and $55.1 million of depreciation and amortization expense were included in cost of gaming equipment and systems and cost of gaming operations in the consolidated statements of operations.

Impairment of long-lived assets and goodwill

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets are measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset, undiscounted and without interest. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets.

The Company reviews goodwill for impairment annually at the beginning of its fourth fiscal quarter, or whenever events or changes in circumstances indicate the carrying value may not be recoverable or warrant a revision to the estimated remaining useful life. The Company performs the impairment analysis of goodwill at a reporting unit level by comparing the fair value of a reporting unit with its carrying value, including goodwill. If the fair value is less than the carrying value, the impairment to be recognized is measured as the amount by which the carrying amount of the goodwill exceeds the fair value of the reporting unit goodwill.

During the years ended June 30, 2013, 2012 and 2011, no impairment charges related to long-lived assets or goodwill were recorded.

F-15

BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Jackpot liabilities

The Company recognizes jackpot expense, included in cost of gaming operations in the consolidated statements of operations, and a liability for jackpots incurred but not yet won in each jurisdiction based on the discounted net present value of the progressive meter liability. Jackpots are payable either in weekly or annual installments, or immediately in the case of instant win progressive jackpots. Winners may elect to receive a single payment for the present value of a jackpot discounted at applicable interest rates in lieu of annual installments. Interest rates used in the single payment calculation vary by jurisdiction and are impacted by market forces and other economic conditions.

Revenue recognition

The Company's revenue recognition policy is to record revenue when all of the following criteria have been satisfied:

•

Persuasive evidence of an arrangement exists;

•

The price or fee to the customer is fixed or determinable;

•

Collectability is reasonably assured;

•

Delivery has occurred; and

•

No significant contractual obligations remain.

Revenues are reported net of incentive rebates, discounts, sales taxes, and all other items of a similar nature except for gaming industry taxes on certain Gaming Operations revenue. The gross amounts of these gaming taxes are not presented separately in the financial statements because they are not significant. For products sold under arrangements with extended payment terms the probability of collection is evaluated based on a review of the customer's credit worthiness and a review of historic collection experience on contracts with extended payment terms. As a result of such review, the Company recognizes revenue on extended payment term arrangements as the Company has determined that collectability is reasonably assured and the fee is considered fixed and determinable.

Games placed with customers on a trial basis are recorded as revenue once the trial period has ended, the customer has accepted the games and all other revenue recognition criteria have been satisfied. Amounts billed to customers prior to completing the earnings process are deferred until the revenue recognition criteria are satisfied.

Gaming Operations Revenue.    Gaming operations revenue consists of the operation of linked progressive systems and the rental of gaming devices, game content and the related systems placed with customers. Fees under these arrangements are earned and recognized based on a share of money wagered, a share of the net winnings, or on a fixed daily rate. The daily fee entitles the customer to full use of the gaming device and includes maintenance, licensing of the game content software and connection to a linked progressive system, where applicable. In certain markets, the Company also charges a daily system connection fee for the customer to connect to a central determination system and/or back-office system. The Company does not consider these arrangements to have multiple revenue-generating activities as the services offered are a comprehensive solution in exchange for a daily fee and all of the products and services are delivered simultaneously. Gaming operations revenue is recognized under general revenue recognition guidance as the deliverables provide the customer with rights to use tangible gaming devices and software that is essential to the functionality of the gaming devices.

F-16

BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Gaming Equipment Revenue.    Gaming Equipment revenue is generated from the sale of gaming devices and licensing rights to game content software that is installed in the gaming device, parts, and other ancillary equipment. Arrangements may also include sales of game content conversion kits which enable customers to replace game content without purchasing a new gaming device. Gaming equipment arrangements do not include maintenance and product support fees beyond a standard warranty period. The recognition of revenue from the sale of gaming devices occurs as title and risk of loss have passed to the customer and all other revenue recognition criteria have been satisfied.

As the combination of game content software and the tangible gaming device function together to deliver the product's essential functionality, revenue from the sale of gaming devices is recognized under general revenue recognition guidance. Game content conversion kits are considered software deliverables and are recognized in accordance with software revenue recognition guidance.

Systems Revenue.    Systems revenue arrangements generally include a combination of systems software licenses, systems-based hardware products, maintenance and product support fees and professional services. The primary function of systems software licensed by the Company is to aid customers to more effectively run their business with marketing, data management and analysis, accounting, player tracking and security features.

Revenue for systems software and maintenance and product support fees is recognized under software revenue recognition guidance. Although the systems software and certain systems-based hardware function together, the primary functionality of the systems software is derived from the software and the systems software is not essential to the functionality of the systems-based hardware.

The Company licenses systems software on a perpetual basis or under time-based licenses. Revenue from perpetual license software is recognized at the inception of the license term provided all revenue recognition criteria have been satisfied. Revenue from maintenance and product support fees sold with perpetual licenses is recognized over the term of the support period. The Company's time-based licenses are generally for twelve month terms and are bundled with software maintenance and product support fees. All revenue from such arrangements is recognized over the term of the license.

Systems-based hardware includes embedded software that is essential to the functionality of the hardware. Accordingly, revenue related to all systems-based hardware sales and related maintenance and product support fees are recognized under general revenue recognition guidance. Revenue from the sale of systems-based hardware is generally recognized upon delivery when title and risk of loss have passed to the customer and all other revenue recognition criteria are satisfied. However, in the case of arrangements involving a systems installation, revenue on the systems-based hardware is generally not recognized until the system has been installed and the customer has accepted the system. Hardware maintenance and product support fees are recognized on a straight-line basis over the term of the support period which is generally twelve months.

Software maintenance and product support provides customers with rights to unspecified software product upgrades, maintenance and patches released during the term of the support period. The Company's software maintenance and product support arrangements are generally for twelve month periods. Software maintenance and product support is recognized on a straight-line basis over the term of the support period.

Multiple Element Arrangements.    The Company enters into revenue arrangements that may consist of multiple deliverables of its products and services. For example, customers may enter into arrangements with the Company for the implementation of systems software and the sale of gaming devices. Arrangements for the implementation of systems software will generally include a combination of

F-17

BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

systems software licenses, systems-based hardware products, maintenance and product support fees, and professional services. Certain gaming equipment arrangements may also include the sale of gaming devices and game content conversion kits.

Revenue arrangements with multiple deliverables are allocated to separate units of accounting if the deliverables meet both of the following criteria:

•

The delivered items have value to the customer on a stand-alone basis. The items have value on a standalone basis if they are sold separately by any vendor or the customer could resell the delivered items on a standalone basis; and

•

If the arrangement includes a general right of return relative to the delivered items, delivery or performance of the undelivered items is considered probable and substantially in the control of the Company.

At the inception of a multiple element arrangement, fees under the arrangement are allocated to the nonsoftware deliverables, and to the software deliverables as a group based on their relative selling price. Software deliverables are further subject to separation and allocation based on software revenue recognition guidance as described in the following paragraph. When applying the relative selling price method, a hierarchy is used for estimating the selling price based first on vendor-specific objective evidence ("VSOE"), then third-party evidence ("TPE") and finally management's estimate of the selling price ("ESP"). Revenue for each unit of accounting is recognized when the relevant recognition criteria for each respective element has been met.

In allocating arrangement fees under the relative selling price hierarchy, the Company uses VSOE for all products which have been sold on a stand-alone basis or the stated renewal rate for maintenance and product support fees. As TPE is generally not available, the Company uses ESP for products that are not sold on a stand-alone basis and for recently introduced products that are sold on a stand-alone basis but for which a history of stand-alone sales has not yet been developed. Following these guidelines, the Company uses either VSOE or ESP for gaming devices, system-based hardware products, maintenance and product support fees associated with perpetual licenses and professional services; and ESP for perpetual and time-based software licenses and maintenance and product support fees associated with time-based licenses.

The Company uses the residual method to recognize revenue allocated to software deliverables. Under the residual method, the fair value of the undelivered elements is deferred and the remaining portion of the arrangement fee is allocated to the delivered element and is recognized as revenue. In arrangements in which the Company does not have VSOE of fair value of all undelivered software elements, revenue is deferred until delivery occurs or VSOE of fair value has been established for any remaining undelivered software elements. In the event the only undelivered software element is maintenance and product support for which VSOE of fair value does not exist, the revenue is recognized ratably over the maintenance and product support period.

The establishment of VSOE requires judgment as to whether there is a sufficient quantity of items sold on a stand-alone basis and whether the prices demonstrate an appropriate level of concentration to conclude that VSOE exists. In determining ESP, management considers a variety of information including historic pricing and discounting practices, competitive market activity, internal costs, and the pricing and discounting practices of products sold in bundled arrangements.

F-18

BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Advertising costs

The Company expenses advertising costs as incurred, which totaled $10.0 million, $9.3 million and $9.6 million from continuing operations for the years ended June 30, 2013, 2012 and 2011, respectively.

Warranty and product indemnifications

Gaming devices are typically sold with a 90-day parts and labor warranty and certain sales agreements include third-party indemnifications for intellectual property infringement. Warranty expense is calculated using historical experience, and totaled $3.6 million, $4.1 million and $2.5 million for the years ended June 30, 2013, 2012 and 2011, respectively, and no costs have been incurred or accrued related to indemnities.

Research and development

Research and development expenses related to product development are expensed until technological feasibility has been established. The Company has determined that technological feasibility is not established for its products until completion of the regulatory approval process. As this process is completed shortly before the products are made available to customers, any development costs incurred after the establishment of technological feasibility are typically not significant and expensed as incurred.

Income taxes

The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. Taxes on income of the Company's foreign subsidiaries are provided at the tax rates applicable to the tax jurisdictions in which they are located.

The Company recognizes tax benefits from an uncertain position only if it is more likely than not that the position will be sustained upon examination by taxing authorities based on the technical merits of the issue. The amount recognized is the largest benefit that the Company believes has greater than a 50% likelihood of being realized upon settlement. The Company recognizes interest and penalties related to uncertain tax positions as tax expense.

Share-based compensation

The Company accounts for share-based compensation based on the calculated fair value of the award measured on the grant date, which is recognized, net of estimated forfeitures, as an expense over the employee's requisite service period. The Company classifies share-based compensation expense in the same financial statement line as cash compensation, including cost of gaming equipment and systems and casino operations, research and development costs, and selling, general and administrative expenses.

The excess tax benefit from stock option exercises and tax deductions in excess of compensation cost recognized are classified as a financing activity in the statement of cash flows.

F-19

BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Foreign currency translation

The functional currency of the Company's foreign subsidiaries is typically their local currency. Assets and liabilities of foreign operations are translated into U.S. dollars at the rate of exchange at the end of the period, and the income and expense accounts are translated at the average rate of exchange for the period. Translation adjustments are reflected as accumulated other comprehensive income within stockholders' equity. Gains and losses on foreign currency transactions are included in the consolidated statements of operations.

Recently adopted accounting pronouncements

On July 1, 2011, the Company adopted new accounting guidance related to troubled debt restructuring. The guidance clarifies which loan modifications constitute troubled debt restructurings to assist creditors in determining whether a modification of the terms of a receivable meets the criteria to be considered a troubled debt restructuring, both for purposes of recording an impairment loss and for disclosures of troubled debt restructurings.

On July 1, 2011, the Company adopted new accounting guidance related to accruals for casino jackpot liabilities. Specifically, the guidance clarifies that an entity should not accrue jackpot liabilities, or portions thereof, before a jackpot is won if the entity can avoid paying the jackpot. Jackpots should be accrued and charged to revenue when an entity has the obligation to pay the jackpot. The guidance applies to both base and progressive jackpots. The new guidance was applied by recording a cumulative-effect adjustment to opening retained earnings of $2.4 million on July 1, 2011.

On December 31, 2011, the Company chose to early adopt new accounting guidance to make the presentation of items within other comprehensive income ("OCI") more prominent. The new standard requires companies to present items of net income, items of OCI and total comprehensive income in one continuous statement or two separate consecutive statements, and companies are no longer allowed to present items of OCI only in the statement of stockholders' equity. The Company chose to present the items in two separate consecutive statements. The new guidance was applied retrospectively.

Effective December 31, 2011, new accounting guidance for testing goodwill impairment permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The Company has not utilized this method in its evaluation of goodwill impairment.

Effective September 30, 2012, new accounting guidance for testing indefinite-lived intangible assets permits an entity to first access qualitative factors to determine whether the existence of events and circumstances indicate that it is more likely than not that the indefinite-lived intangible asset is impaired. The outcome of the assessment is used as a basis for determining whether it is necessary to determine the fair value of the indefinite-lived intangible asset and perform the quantitative impairment test by comparing the fair value with the carrying amount in accordance with ASC Topic 350. The Company has not yet utilized this method in its evaluation of indefinite-lived intangible assets impairment.

Recently issued accounting pronouncements not yet adopted

In December 2011, the FASB issued new accounting guidance for disclosures about offsetting assets and liabilities which requires an entity to disclose information about financial instruments that have been offset and related arrangements to enable users of its financial statements to understand the

F-20

BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

effect of those arrangements on its financial position. Entities will be required to provide both net (offset amounts) and gross information in the notes to the financial statements for relevant assets and liabilities that are offset. The new guidance is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The Company expects to adopt this guidance in fiscal year 2014 and does not believe it will have a significant impact on its consolidated results of operations, financial condition and cash flows.

In February 2013, the FASB issued new accounting guidance to improve the reporting of reclassifications out of accumulated other comprehensive income ("AOCI"). Under the guidance, an entity is required to provide information about the amounts reclassified out of AOCI by component. In addition, an entity is required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income, but only if the amount reclassified is required to be reclassified in its entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about those amounts. The guidance did not change the requirements for reporting net income or other comprehensive income in the financial statements. The new guidance is effective for annual reporting periods beginning on or after December 15, 2012, and interim periods within those annual periods. The Company expects to adopt this guidance in fiscal year 2014 and does not believe it will have a significant impact on its consolidated results of operations, financial condition and cash flows.

In February 2013, the FASB issued new accounting guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation is fixed at the reporting date, including debt arrangements, other contractual obligations, and settled litigation and judicial rulings. The new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2013. The Company expects to adopt this guidance in fiscal year 2015 and does not believe it will have a significant impact on its consolidated results of operations, financial condition and cash flows.

The Company believes there is no additional new accounting guidance adopted but not yet effective that is relevant to the readers of our financial statements. However, there are numerous new proposals under development which, if and when enacted, may have a significant impact on its financial reporting.

F-21

BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.     EARNINGS PER SHARE

Basic earnings per share are computed by dividing earnings by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share reflect the additional dilution from all potentially dilutive securities.

The following computation of basic and diluted earnings per share applicable to the Company's common stock is as follows:

	Year Ended June 30,
	2013		2012		2011
	(in 000s, except per share amounts)
Amounts attributable to Bally Technologies, Inc.:
Income from continuing operations, net of tax	$	141,444	$	101,148	$	98,666
Loss on sale of discontinued operations, net of tax		—		—		(403	)
Diluted earnings attributable to Bally Technologies, Inc.	$	141,444	$	101,148	$	98,263
Weighted average common shares outstanding		40,120		42,985		51,960
Dilutive effect of:
Stock options, Restricted Stock Units ("RSU") and restricted stock		872		1,435		2,459
Warrants		—		—		1
Weighted average diluted shares outstanding		40,992		44,420		54,420
Basic earnings per share attributable to Bally Technologies, Inc.:
Income from continuing operations	$	3.53	$	2.35	$	1.90
Loss on sale of discontinued operations		—		—		(0.01	)
Basic earnings per share	$	3.53	$	2.35	$	1.89
Diluted earnings per share attributable to Bally Technologies, Inc.:
Income from continuing operations	$	3.45	$	2.28	$	1.82
Loss on sale of discontinued operations		—		—		(0.01	)
Diluted earnings per share	$	3.45	$	2.28	$	1.81

Certain securities were excluded from the diluted per share calculation because their inclusion would be anti-dilutive. Such securities consist of the following:

	Year Ended June 30,
	2013		2012		2011
	(in 000s)
Stock options, RSU and restricted stock		70		574		688

F-22

BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3.     ACCOUNTS AND NOTES RECEIVABLE AND ALLOWANCES FOR DOUBTFUL ACCOUNTS

The Company has one portfolio segment, the gaming industry customer, and four classes of receivables including its trade receivables with a contract term less than one year, trade receivables with a contract term greater than one year, sales-type leasing arrangements, and notes receivable, which are related to development financing loans. Trade receivables with contract terms greater than one year relate to the sale of gaming equipment and systems transactions, and are generally collateralized by the related equipment sold, although the value of such equipment, if repossessed, may be less than the receivable balance outstanding. Sales-type leasing arrangements relate to gaming equipment and include options to purchase the equipment at the end of the lease term at established prices. Customers with sales-type leasing arrangements typically have a long-standing credit history with the Company.

The Company's accounts and notes receivable were as follows:

	Accounts and Notes Receivable as of June 30, 2013
							Accounts and Notes Receivable as of June 30, 2012
			Ending Balance Individually Evaluated for Impairment
	Ending Balance				Ending Balance Collectively Evaluated for Impairment		Ending Balance		Ending Balance Individually Evaluated for Impairment		Ending Balance Collectively Evaluated for Impairment
	(in 000s)
Contract term less than one year:
Trade and other receivables, current	$	170,598	$	1,589	$	169,009	$	173,889	$	3,655	$	170,234
Contract term greater than one year:
Trade receivables, current		82,600		63,193		19,407		85,075		41,213		43,862
Trade receivables, noncurrent		40,178		17,961		22,217		30,476		7,213		23,263
		122,778		81,154		41,624		115,551		48,426		67,125
Lease receivables, current		6,701		6,701		—		14,763		14,763		—
Lease receivables, noncurrent		9,928		9,928		—		15,070		15,070		—
		16,629		16,629		—		29,833		29,833		—
Notes receivable, current		3,411		3,411		—		5,188		5,188		—
Notes receivable, noncurrent		17,114		17,114		—		13,269		13,269		—
		20,525		20,525		—		18,457		18,457		—
Total current		263,310		74,894		188,416		278,915		64,819		214,096
Total noncurrent		67,220		45,003		22,217		58,815		35,552		23,263
Total	$	330,530	$	119,897	$	210,633	$	337,730	$	100,371	$	237,359

F-23

BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The activity related to the allowance for doubtful accounts for the year ended June 30, 2013 is summarized below:

	Allowance for Doubtful Accounts
	Beginning Balance as of June 30, 2012			Charge- offs		Recoveries		Provision			Ending Balance as of June 30, 2013			Ending Balance Individually Evaluated for Impairment			Ending Balance Collectively Evaluated for Impairment
	(in 000s)
Contract term less than one year:
Trade and other receivables, current	$	(6,138	)	$	1,449	$	—	$	184		$	(4,505	)	$	(1,445	)	$	(3,060	)
Contract term greater than one year:
Trade receivables, current		(7,935	)		3,973		822		(7,168	)		(10,308	)		(8,101	)		(2,207	)
Trade receivables, noncurrent		(1,279	)		2,598		—		(3,083	)		(1,764	)		—			(1,764	)
		(9,214	)		6,571		822		(10,251	)		(12,072	)		(8,101	)		(3,971	)
Lease receivables, current		—			—		—		—			—			—			—
Lease receivables, noncurrent		—			—		—		—			—			—			—
		—			—		—		—			—			—			—
Notes receivable, current		—			—		—		—			—			—			—
Notes receivable, noncurrent		(1,750	)		2,856		—		(1,106	)		—			—			—
		(1,750	)		2,856		—		(1,106	)		—			—			—
Total current		(14,073	)		5,422		822		(6,984	)		(14,813	)		(9,546	)		(5,267	)
Total noncurrent		(3,029	)		5,454		—		(4,189	)		(1,764	)		—			(1,764	)
Total	$	(17,102	)	$	10,876	$	822	$	(11,173	)	$	(16,577	)	$	(9,546	)	$	(7,031	)

F-24

BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The activity related to the allowance for doubtful accounts for the year ended June 30, 2012 is summarized below:

	Allowance for Doubtful Accounts
	Beginning Balance as of June 30, 2011			Charge- offs		Recoveries		Provision			Ending Balance as of June 30, 2012			Ending Balance Individually Evaluated for Impairment			Ending Balance Collectively Evaluated for Impairment
	(in 000s)
Contract term less than one year:
Trade and other receivables, current	$	(5,875	)	$	1,550	$	243	$	(2,056	)	$	(6,138	)	$	(2,163	)	$	(3,975	)
Contract term greater than one year:
Trade receivables, current		(5,184	)		355		513		(3,619	)		(7,935	)		(4,867	)		(3,068	)
Trade receivables, noncurrent		(507	)		1,666		—		(2,438	)		(1,279	)		(118	)		(1,161	)
		(5,691	)		2,021		513		(6,057	)		(9,214	)		(4,985	)		(4,229	)
Lease receivables, current		—			—		—		—			—			—			—
Lease receivables, noncurrent		—			—		—		—			—			—			—
		—			—		—		—			—			—			—
Notes receivable, current		—			—		—		—			—			—			—
Notes receivable, noncurrent		—			—		—		(1,750	)		(1,750	)		(1,750	)		—
		—			—		—		(1,750	)		(1,750	)		(1,750	)		—
Total current		(11,059	)		1,905		756		(5,675	)		(14,073	)		(7,030	)		(7,043	)
Total noncurrent		(507	)		1,666		—		(4,188	)		(3,029	)		(1,868	)		(1,161	)
Total	$	(11,566	)	$	3,571	$	756	$	(9,863	)	$	(17,102	)	$	(8,898	)	$	(8,204	)

Gaming is a highly regulated industry requiring customers to obtain a licensing and verify with the applicable regulatory agency that they have the financial resources to operate a gaming establishment. Many of the Company's customers, including new casinos that have opened in recent years, are owned by existing multi-property customers that have established a favorable payment history with the Company. Customer accounts typically include a mix of trade receivables balances with terms for periods of 30 to 120 days and financing receivables resulting from extended payment terms.

The Company monitors the credit quality of its accounts receivable by reviewing an aging of customer invoices. Invoices are considered past due if a scheduled payment is not received within agreed upon terms. The Company's notes receivable are reviewed quarterly, at a minimum, for impairment. The Company also reviews a variety of other relevant qualitative information such as collection experience, economic conditions and specific customer financial conditions to evaluate credit risk in recording the allowance for doubtful accounts or as an indicator of an impaired loan.

The Company accrues interest, if applicable, on its accounts and notes receivables per the terms of the agreement. Interest is not accrued on past due accounts and notes receivable, or individual amounts that the Company has determined and specifically identified as not collectible.

F-25

BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following summarizes the aging of past due receivables, excluding trade accounts receivable with a contract term less than one year, as of June 30, 2013:

	1 to 90 Days Past Due		91 to 180 Days Past Due		181 + Days Past Due		Total Past Due		Current		Total Receivable		Recorded Investment in Receivables on Nonaccrual Status		Recorded Investment 90 Days and Accruing
	(in 000s)
Trade receivables	$	9,636	$	2,851	$	6,869	$	19,356	$	103,422	$	122,778	$	19,356	$	—
Lease receivables		—		—		—		—		16,629		16,629		—		—
Notes receivable		—		—		—		—		20,525		20,525		—		—
Total	$	9,636	$	2,851	$	6,869	$	19,356	$	140,576	$	159,932	$	19,356	$	—

The following summarizes the aging of past due receivables, excluding trade accounts receivable with a contract term less than one year, as of June 30, 2012:

	1 to 90 Days Past Due		91 to 180 Days Past Due		181 + Days Past Due		Total Past Due		Current		Total Receivable		Recorded Investment in Receivables on Nonaccrual Status		Recorded Investment 90 Days and Accruing
	(in 000s)
Trade receivables	$	7,278	$	4,197	$	8,735	$	20,210	$	95,341	$	115,551	$	20,210	$	—
Lease receivables		—		—		—		—		29,833		29,833		—		—
Notes receivable		1,427		1,423		319		3,169		15,288		18,457		18,457		—
Total	$	8,705	$	5,620	$	9,054	$	23,379	$	140,462	$	163,841	$	38,667	$	—

The aging of customer invoices and note balances are based on their contractually agreed upon payment terms, which in certain rare circumstances have been modified from the original financing terms. The modification of original financing terms are infrequent and generally do not represent a concession as they result only in a delay of payment that is typically insignificant to total trade, lease and notes receivable balances.

The Company provided development financing to certain customers in the form of notes receivable. Notes receivable as of June 30, 2012, include $15.6 million, net of discounts of $3.3 million, and as of June 30, 2013, $19.5 million related to development financing loans made to HBG Connex S.P.A. ("HBG") to allow it to make advance payments necessary to obtain gaming licenses in the Italian Video Lottery Terminal ("VLT") market. The Company entered into a settlement agreement with HBG (see Note 12 to consolidated financial statements, Commitments and Contingencies) which, amongst other matters, resulted in the replacement of the existing non-interest bearing development financing notes receivable with a new note receivable bearing a stated interest rate of 4% per annum with graduated monthly installments over four years from July 2013 to June 2017. In connection with the settlement agreement, the discounts totaling $3.3 million associated with the original HBG notes receivable were reversed during the year ended June 30, 2013 and the $4.6 million in contract rights associated with HBG were derecognized (see Note 5 to consolidated financial statements, Goodwill and Intangible Assets). This resulted in a $1.3 million charge recorded to SG&A. There were no significant modifications of accounts receivable during the period.

Impairment is recognized when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of a note

F-26

BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

arrangement. During the year ended June 30, 2012, based on an individual customer's filing of a bankruptcy petition, the Company recognized an impairment charge on notes receivable and a related allowance of $1.8 million after estimating the fair value of the collateral less costs to sell. During the year ended June 30, 2013, the Company recognized an impairment charge of $1.1 million based on the actual proceeds received from the sale of the collateral. As a result, there were no recorded investments in impaired loans as of June 30, 2013.

The impaired loan balance as of June 30, 2012 was as follows:

	Recorded Investment		Unpaid Principal Balance		Related Allowance			Average Recorded Investment		Interest Income Recognized
	(in 000s)
With an allowance recorded:
Notes receivable	$	2,856	$	2,856	$	(1,750	)	$	2,856	$	—
With no related allowance recorded:
Notes receivable		—		—		—			—		—
Total	$	2,856	$	2,856	$	(1,750	)	$	2,856	$	—

The fair value of accounts and notes receivable, net, is estimated by discounting expected future cash flows using current interest rates at which similar loans would be made to borrowers, with similar credit ratings and remaining maturities. As of June 30, 2013 and 2012, respectively, the fair value of the accounts and notes receivable, net, approximate the carrying value.

4.     PROPERTY, PLANT AND EQUIPMENT AND LEASED GAMING EQUIPMENT

	June 30,
	2013			2012
	(in 000s)
Land and land improvements	$	1,975		$	1,975
Buildings and leasehold improvements		29,582			25,908
Gaming equipment		30,552			29,293
Furniture, fixtures and equipment		33,544			32,314
Less accumulated depreciation		(60,556	)		(58,823	)
Property, plant and equipment, net	$	35,097		$	30,667
Leased gaming equipment	$	323,431		$	306,997
Less accumulated depreciation		(209,680	)		(185,846	)
Leased gaming equipment, net	$	113,751		$	121,151

F-27

BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

5.     GOODWILL AND INTANGIBLE ASSETS

		June 30, 2013							June 30, 2012
	Useful Life (Years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	(dollars in 000s)
Computer software	3 - 5	$	39,484	$	(35,796	)	$	3,688	$	39,633	$	(34,442	)	$	5,191
License rights	3 - 13		12,819		(7,215	)		5,604		8,440		(4,251	)		4,189
Trademarks	5 - 10		2,430		(2,239	)		191		2,430		(2,216	)		214
Core technology	5 - 14		27,063		(21,887	)		5,176		27,063		(17,935	)		9,128
Contract rights	2 - 10		10,943		(9,766	)		1,177		15,496		(8,522	)		6,974
Other intangibles	3 - 5		2,548		(808	)		1,740		6,574		(604	)		5,970
Total finite-lived intangible assets		$	95,287	$	(77,711	)	$	17,576	$	99,636	$	(67,970	)	$	31,666
Trademark	indefinite		7,500		—			7,500		7,500		—			7,500
Total		$	102,787	$	(77,711	)	$	25,076	$	107,136	$	(67,970	)	$	39,166

Total amortization expense related to finite-lived intangible assets totaled $10.9 million, $9.8 million and $9.3 million for the years ended June 30, 2013, 2012 and 2011, respectively, which included computer software amortization expense of $2.1 million, $2.3 million and $3.3 million, respectively.

During the year ended June 30, 2013, contract rights of approximately $4.6 million associated with HBG were derecognized in conjunction with the settlement agreement (see Note 12 to consolidated financial statements, Commitments and Contingencies).

During the year ended June 30, 2012, the Company acquired substantially all the assets and liabilities of MacroView Labs and Chiligaming LTD for approximately $8.8 million and $7.1 million, respectively. As part of the transactions, the Company recognized $4.3 million in core technology, $0.9 million in contract rights, and $10.7 million in goodwill. The Company has not presented pro forma information for the acquisitions as the impact was insignificant both individually, and in the aggregate, to the Company's most recent consolidated financial statements.

The Company's indefinite-lived intangible asset of approximately $7.5 million was for one-time consideration given for a perpetual, world-wide license for the use of the Bally trademark in connection with the Company's business.

Future amortization of finite-lived intangible assets is scheduled as follows:

Year Ended June 30,	(in 000s)
2014	$	8,283
2015		4,495
2016		2,648
2017		858
2018		248
Thereafter		1,044
Total	$	17,576

F-28

BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All goodwill is associated with continuing operations. The changes in the carrying amount of goodwill for the years ended June 30, 2013 and 2012 are as follows:

	(in 000s)
Balance as of June 30, 2011	$	162,110
Additions		10,656
Foreign currency translation adjustment		(795	)
Balance as of June 30, 2012		171,971
Foreign currency translation adjustment		191
Balance as of June 30, 2013	$	172,162

6.     ACCRUED AND OTHER LIABILITIES

	June 30,
	2013		2012
	(in 000s)
Payroll and related costs	$	39,077	$	30,212
Legal, professional and consulting costs		9,948		13,548
Customer deposits		9,430		6,154
Royalties		4,919		4,019
Regulatory approval costs		2,922		2,394
Sales, use and gaming taxes		3,957		4,322
Interest rate derivative financial instruments		4,689		4,804
Foreign currency derivative financial instrument		22		115
Accrued purchase of treasury stock		—		2,130
Other		16,163		17,612
Total accrued and other liabilities	$	91,127	$	85,310

7.     LONG-TERM DEBT

	June 30,
	2013			2012
	(in 000s)
Revolving credit facility	$	240,000		$	230,000
Term loan facility		364,375			281,250
Other, generally unsecured		240			216
Long-term debt		604,615			511,466
Less current maturities		(24,615	)		(17,091	)
Long-term debt, net of current maturities	$	580,000		$	494,375

As of June 30, 2013 and 2012, there was approximately $460.0 million and $170.0 million, respectively, of undrawn availability under the revolving credit facility. Availability under the revolving credit facility is reduced to the extent of outstanding letters of credit.

On April 15, 2011, the Company entered into an amended and restated credit agreement, that provides for a five-year $700 million senior secured credit facility comprised of a $300 million term loan and a $400 million revolving credit facility. On April 19, 2013, the Company entered into an second amended

F-29

BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

and restated credit agreement that provides for a five-year $1.07 billion senior secured credit facility comprised of a $370 million term loan and a $700 million revolving credit facility, including a $50 million sublimit for the issuance of standby letters of credit, a $10 million sublimit for swingline loans and a $150 million sublimit for multicurrency borrowings approved under the credit facility. The interest rate on the credit facility is subject to a leverage-based pricing grid that ranges from LIBOR plus a margin of 1.00% to 2.00%.

As of June 30, 2013 and 2012, the interest rate on the revolving credit facility was 1.45% and 1.75%, respectively, and the interest rate on the term loan was 3.59% and 3.58%, respectively, after giving effect to the floating-to-fixed interest rate swap(s).

Under the credit facility, the term loan requires quarterly principal reductions in an amount equal to $5,625,000, through March 2014; $7,500,000, from June 2014 through March 2016; and $5,000,000 from June 2016 until the term loan's maturity in April 2018 upon when the remaining outstanding principal balance of $247,500,000 is due.

The credit facility is collateralized by substantially all of the Company's domestic property and is guaranteed by each of the Company's domestic subsidiaries, excluding any noncontrolling interests, and is secured by a pledge agreement.

The fair value of long-term debt is estimated by discounting expected cash flows using current interest rates at which similar loans would be made to borrowers with similar credit ratings and remaining maturities. As of June 30, 2013 and 2012, the fair value of long-term debt approximated the carrying value.

The credit facility contains a number of covenants that, among other things, restrict the Company's ability and certain of its subsidiaries to dispose of assets, incur additional indebtedness or issue preferred stock, pay dividends or make other distributions, enter into certain acquisitions, repurchase equity interests or subordinated indebtedness, issue or sell equity interests of our subsidiaries, engage in mergers or acquisitions or certain transactions with subsidiaries and affiliates, and that otherwise restrict corporate activities.

The financial covenants under the credit facility consist of a leverage ratio and an interest coverage ratio. The leverage ratio is computed as total debt outstanding at the end of the quarter divided by the trailing twelve months Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), excluding certain cash and non-cash charges. The interest coverage ratio is computed as EBITDA for the trailing twelve months divided by the trailing twelve months of interest charges.

A breach of any of the covenants or the inability to comply with the required financial ratios could result in a default under the credit facility. In the event of any such default, the lenders could elect to declare all borrowings outstanding under the credit facility, together with any accrued interest and other fees, to be due and payable. If the Company were unable to repay the indebtedness upon its acceleration, the lenders could proceed against the underlying collateral. The Company was in compliance with all of the credit facility covenants as of June 30, 2013 and 2012.

Interest Rate Swap Agreements

Effective December 2008, the Company entered into a floating-to-fixed interest rate swap agreement with an original notional value of $218.8 million that matured on September 26, 2012. Effective June 2011, the Company entered into a second floating-to-fixed rate swap agreement with an original notional value of $165.0 million and a maturity date of May 13, 2016 to fix a portion of the floating LIBOR based debt under the new term loan to fixed rate debt at an interest rate of 2.09% (plus applicable margin). The second interest swap has an accreting and subsequently amortizing notional in order to hedge the targeted amount of debt over the life of the swap. At June 30, 2013 and 2012, the swap agreements had a notional value of $264.4 million and $281.3 million, respectively.

F-30

BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company has documented and designated these interest rate swaps as cash flow hedges. Based on the assessment of effectiveness using statistical regression, the Company determined that the interest rate swaps are effective. Effectiveness testing of the hedge relationships and measurement to quantify ineffectiveness is performed each fiscal quarter using the hypothetical derivative method. As the interest rate swaps qualify as cash flow hedges, the Company adjusts the cash flow hedges on a quarterly basis to their fair value with a corresponding offset to accumulated Other Comprehensive Income ("OCI"). The interest rate swaps have been and are expected to remain highly effective for the life of the hedges. Effective amounts are reclassified to interest expense as the related hedged expense is incurred. Any ineffectiveness is reclassified from accumulated other comprehensive income to other income (expense). As of June 30, 2013, the Company had no ineffectiveness on its cash flow hedges. Amounts related to the swaps expected to be reclassified from other comprehensive income to interest expense in the next twelve months total $4.7 million.

Additional information on the Company's interest rate swaps are as follows:

Interest Rate Derivative Financial Instruments	Balance Sheet Location	Fair Value (in 000s)		Location of Offsetting Balance
Cash flow hedges—$264.4 million LIBOR based debt	Accrued and other liabilities	$	4,689
	Other liabilities		4,927
		$	9,616	Accumulated other comprehensive income (before income taxes)

Principal Repayments

Annual principal maturities of the Company's long-term debt are as follows:

Year Ended June 30,	(in 000s)
2014	$	24,615
2015		30,000
2016		27,500
2017		20,000
2018		502,500
Total	$	604,615

F-31

BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

8.     LEASES

The Company leases certain office space, equipment, autos, and warehouse facilities and other property locations under noncancelable operating leases which are generally included in selling, general and administrative expenses. Operating rental expense is as follows:

	Year Ended June 30,
	2013		2012			2011
	(in 000s)
Equipment, auto and office space leases	$	11,220	$	9,273		$	9,060
Sublease rental income		—		(317	)		(357	)
	$	11,220	$	8,956		$	8,703

Future minimum rental payments required under noncancelable operating leases are as follows:

Year Ended June 30,	Operating
2014	$	8,872
2015		6,594
2016		5,152
2017		3,059
2018		1,192
Thereafter		521
Total minimum payments	$	25,390

9.     SHARE-BASED COMPENSATION

Employee Stock Purchase Plan

The 2008 Employee Stock Purchase Plan (the "2008 ESPP") provides that eligible employees are able to contribute up to 10% of their eligible earnings towards the quarterly purchase of the Company's common stock. The employee's purchase price is equal to 85% of the fair market value. During the years ended June 30, 2013, 2012 and 2011, employees purchased 77,094, 76,526 and 67,730 shares of common stock for approximately $3.2 million, $2.6 million and $2.1 million, respectively.

Share-Based Award Plans

The Company's 2010 Long-Term Incentive Plan, which was an amendment and restatement of the Company's 2001 Long-Term Incentive Plan, as amended, (the "2010 Plan") provides for the issuance of up to 15,050,000 shares of common stock, with awards of restricted stock, restricted stock units ("RSUs") or performance stock units ("PSUs") reducing the 2010 Plan by 1.75 shares for every share granted. Generally, options are granted at the fair value of the Company's common stock at the date of grant and are exercisable for up to ten years.

The Company's 1996 Long-Term Incentive Plan (the "1996 Plan") provided for the issuance of up to 3,428,000 shares of common stock to Company employees, directors and designated paid consultants. Generally, options were granted at the fair value of the Company's common stock at the date of grant and are exercisable for up to ten years. No shares of common stock remain available under the 1996 Plan for the grant of new awards.

Restricted Stock and RSUs are converted into the right to receive common stock upon vesting. The Company permits the holders to satisfy their tax withholding requirements by net settlement, whereby

F-32

BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

the Company withholds a portion of the shares to cover the applicable taxes based on the fair market value of the Company's stock at the vesting date. During fiscal years 2013, 2012 and 2011, tax payments made were $10.1 million, $1.7 million and $3.2 million, respectively.

The Company issues new shares for shares delivered under the 1996 Plan, the 2010 Plan and the 2008 ESPP (collectively, the "Plans").

Stock option activity is summarized below:

				Weighted Average
	Shares			Exercise Price		Remaining Contractual Term		Aggregate Intrinsic Value
	(in 000s)			(per share)		(years)		(in 000s)
Balance outstanding as of June 30, 2012		2,545		$	26.40			$	51,655
Granted		30			46.78
Exercised		(1,385	)		24.06
Forfeited or expired		(20	)		31.77
Balance outstanding as of June 30, 2013		1,170		$	29.60		3.20	$	31,391
Exercisable as of June 30, 2013		858		$	26.50		2.70	$	25,678

Restricted stock, PSU and RSU activity is summarized below:

	Restricted Stock			Weighted Average Grant Date Fair Value		RSUs / PSUs			Weighted Average Grant Date Fair Value
	(in 000s)			(per share)		(in 000s)			(per share)
Balance outstanding as of June 30, 2012		568		$	41.31		570		$	17.69
Granted		187			47.07		82			45.65
Released		(170	)		40.61		(570	)		17.69
Forfeited or expired		(14	)		39.87		—			—
Balance outstanding as of June 30, 2013		571		$	43.45		82			45.65

The following is additional information about stock options, restricted stock, PSUs and RSUs exercised, granted and vested during the periods:

	Year Ended June 30,
	2013		2012		2011
	(in 000s, except per share amounts)
Weighted average grant-date fair value per share:
Stock options granted	$	18.07	$	17.04	$	16.86
Stock options vested	$	15.55	$	16.05	$	11.47
Restricted stock, PSUs and RSUs vested	$	40.86	$	39.34	$	33.31
Total grant-date fair value of stock options vested	$	4,481	$	6,097	$	6,458
Total grant-date fair value of restricted stock, PSUs and RSUs vested	$	8,663	$	7,289	$	8,962
Exercises under all share-based payment arrangements:
Total intrinsic value	$	35,324	$	26,973	$	37,915
Cash received	$	32,472	$	23,225	$	26,314
Tax benefit realized	$	20,447	$	6,390	$	8,718

F-33

BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Shares Reserved

The following shares are reserved for issue under the Plans:

	(in 000s)
Shares issued and currently outstanding		1,252
Shares available for future issuance		1,937
Total		3,189

Share-Based Compensation

The following table presents share-based compensation expense and related effect of the income tax benefit included in the Company's consolidated statements of operations:

	Year Ended June 30,
	2013			2012			2011
	(in 000s)
Selling, general and administrative	$	8,841		$	9,996		$	9,624
Research and development		4,500			3,956			3,104
Cost of gaming equipment and systems and operations		39			220			179
Share-based compensation expense before tax	$	13,380		$	14,172		$	12,907
Income tax benefit		(4,683	)		(4,960	)		(4,517	)
Net share-based compensation expense	$	8,697		$	9,212		$	8,390

Included in share-based compensation expense in the consolidated statements of operations for the years ended June 30, 2013, 2012 and 2011 is restricted stock amortization of $9.3 million, $8.9 million and $7.0 million, respectively.

As of June 30, 2013, there was $3.5 million of total unrecognized compensation expense related to the unvested portion of stock options which will be recognized over the subsequent 1.43 years. In addition, as of June 30, 2013, there was $20.5 million of total unrecognized compensation expense related to the unvested portion of restricted stock, PSUs and RSUs which will be recognized over the subsequent 1.71 years.

The Company estimates the fair value of stock options using the Black-Scholes valuation model. Key input assumptions used to estimate the fair value of stock options include the exercise price of the option, the expected option term, the expected volatility of the Company's common stock over the option's expected term, the risk-free interest rate over the option's expected term and the Company's expected annual dividend yield. The Company believes that the valuation technique and the approach utilized to develop the underlying assumptions are appropriate in calculating the fair values of the Company's stock options granted. Estimates of fair value are not intended to predict actual future events, or the value ultimately realized by the recipients of equity awards.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The fair value of each option granted during the periods referenced below was estimated on the grant date using the Black-Scholes valuation model with the following assumptions:

	Year Ended June 30,
	2013			2012			2011
Weighted Average:
Expected option term (in years)		4.17			4.36			4.61
Expected volatility		48.30	%		56.90	%		54.91	%
Risk-free interest rate		0.63	%		0.89	%		1.76	%
Expected annual dividend yield		0	%		0	%		0	%

The Company uses its historical exercise activity to estimated expected term. Expected volatility is based on historical market factors related to the Company's common stock. Risk-free interest rate is based on U.S. Treasury rates appropriate for the expected term.

The Company has granted certain PSU awards which contain performance goals related to total shareholder return. The Company utilized a Monte Carlo simulation to derive the grant date fair value of each award.

10.   STOCKHOLDERS' EQUITY, OPTIONS, WARRANTS AND RIGHTS

Warrants

The Company previously issued 100,000 stock purchase warrants in connection with a prior acquisition. The strike price of the warrant was $24.69 with a term of seven years. During the year ended June 30, 2011, 125 stock purchase warrants were exercised and converted into 125 shares of the Company's common stock.

Share Repurchase Plan

The Company's Board of Directors have approved a variety of share repurchase plans under which, subject to price and market conditions, purchases of shares can be made from time to time in the open market or in privately negotiated transactions using available cash.

On April 6, 2011, the Company's Board of Directors increased the authorized capacity under the Company's existing share repurchase plan to $550 million minus the amount repurchased in the Company's modified Dutch auction tender offer to purchase up to $400 million in value of its common stock launched on April 8, 2011. Shareholders tendered 9.9 million shares of the Company's common stock at $40.18 per share for an aggregate cost of approximately $398.3 million.

On May 2, 2012 and October 24, 2012, the Company's Board of Directors approved a $150 million share-repurchase program, which replaced the existing repurchase program at the time of approval.

On April 24, 2013, the Company's Board of Directors approved a $300 million share repurchase program which replaced the existing repurchase program at the time of approval.

On April 24, 2013, the Company entered into an accelerated share repurchase agreement ("ASR Program") with JP Morgan Securities LLC ("JPMorgan") under which it paid JPMorgan $150 million and received an initial delivery of 2.3 million shares, which shares represented 85% of the ASR Program's value at price of $54.27 per share at the inception of the program. Shares representing the remaining 15% of the ASR Program's value will be delivered at maturity date of the program, with the final number of shares to be repurchased based on the volume-weighted average price of our common

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

stock during the repurchase period, less an agreed upon discount and adjusted for the initial share delivery. Under the terms of the ASR Program, at settlement, we could either receive additional shares from the counterparty or be required to deliver additional shares or cash, at our option, to the counterparty. The total number of shares ultimately repurchased will not be known until the calculation period ends and a final settlement occurs. The agreement is subject to customary termination and adjustment provisions following the occurrence of specified events, including major corporate transactions such as announcements of mergers and acquisitions. The ASR Program will be completed during the first quarter of fiscal year 2014. As of June 30, 2013, $149.8 million is available for repurchases of shares of our common stock under the program.

The ASR Program was accounted for as two separate transactions: (i) as shares of common stock acquired in a share repurchase transaction and (ii) as a forward contract indexed to our own common stock. The initial delivery of shares resulted in an immediate reduction of the outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted net earnings per share from the effective date of the ASR Program. The Company has determined that the forward contract indexed to our common stock met all of the applicable criteria for equity classification. As such, the Company recorded the $150 million of shares repurchased as a purchase of treasury stock of $127.5 million and a forward contract included in additional-paid-in-capital of $22.5 million.

The following purchases have been made under the Company's share repurchase plans:

	Shares		Average price per share		Amount (in 000s)
Year Ended June 30,
2011		11,957,208	$	39.65		474,054
2012		3,860,778	$	40.06		154,645
2013		5,197,431	$	53.90		280,148
Total		21,015,417	$	43.25	$	908,847

Special Stock

The Company's Articles of Incorporation authorize the issuance of up to 10,000,000 shares of special stock ("Special Stock"). The Special Stock may be issued from time to time in one or more series, each having such designations, preferences and relative, participating, optional or other special rights, qualifications, limitations or restrictions as shall be stated and expressed in the resolution providing for the issuance of Special Stock or any series thereof adopted by the Board of Directors. Special Stock consists of non-voting stock where no holder of the Special Stock shall be entitled to vote at any meeting of stockholders or otherwise, except as may be specifically provided by law or as approved by the Board of Directors in certain limited circumstances at the time of the stock issuance.

To date, there have been four series of Special Stock authorized for issuance: the Initial Series, the Series B, the Series E and the Series F. In June 1996, the Company issued shares of Series E Special Stock to certain holders of the Company's 7¹/2% Convertible Subordinated Debentures (which were retired in 1996) who elected to receive such stock in lieu of receiving common stock. The holders of shares of Series E Special Stock have no voting rights except as required by law. A total of 115 shares of Series E Special Stock remained outstanding as of June 30, 2012. These shares were purchased and retired as of June 30, 2013. No other shares of Special Stock remain outstanding.

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BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

11.   INCOME TAXES

Consolidated income from continuing operations before taxes and noncontrolling interest for domestic and foreign operations is as follows:

	Year Ended June 30,
	2013			2012		2011
	(in 000s)
United States	$	220,439		$	161,043	$	131,668
Foreign		(4,164	)		3,416		11,725
Total	$	216,275		$	164,459	$	143,393

The components of the Company's income tax expense from continuing operations are as follows:

	Year Ended June 30,
	2013			2012			2011
	(in 000s)
Current:
Federal	$	73,441		$	61,115		$	12,614
State		8,623			9,085			5,585
Foreign		4,299			2,902			3,245
		86,363			73,102			21,444
Deferred:
Federal		(5,346	)		(7,169	)		23,984
State		(509	)		(1,383	)		(919	)
Foreign		(3,934	)		(1,001	)		673
		(9,789	)		(9,553	)		23,738
Income tax expense	$	76,574		$	63,549		$	45,182

The difference between the U.S. statutory federal income tax rate and the Company's effective income tax rate is as follows:

	Year Ended June 30,
	2013			2012			2011
U.S. federal statutory income tax rate		35.0	%		35.0	%		35.0	%
Change in income tax contingencies		1.4			2.1			(2.5	)
State income taxes, net of federal benefit		2.6			2.8			2.0
Foreign earnings subject to U.S. tax		(0.3	)		(0.3	)		2.9
Change in valuation allowance		—			(0.6	)		(0.2	)
Tax credits		(2.5	)		(1.2	)		(4.7	)
Domestic production activities deduction		(2.7	)		(2.7	)		(1.5	)
Foreign losses-no future benefit		0.9			2.0			—
Other, net		1.0			1.5			0.5
		35.4	%		38.6	%		31.5	%

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BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The major components of the deferred tax assets and liabilities from continuing operations are as follows:

	June 30,
	2013			2012
	(in 000s)
Deferred tax assets:
Share-based compensation	$	11,421		$	11,838
Deferred revenue, net of deferred costs		15,947			14,145
Accruals not currently deductible for tax purposes		21,764			21,537
Inventory		5,250			5,518
Net operating loss carryforwards		5,949			2,988
Intangible assets		6,438			4,825
Allowance for doubtful accounts		2,708			4,132
Foreign tax credit carryforwards		—			1,588
Other tax credits		—			969
Interest rate swap agreement		3,515			5,043
Other		1,571			1,176
Total gross deferred tax assets		74,563			73,759
Less: Valuation allowance		(62	)		(68	)
Deferred tax assets	$	74,501		$	73,691
Deferred tax liabilities:
Property and equipment	$	18,322		$	22,955
Other		100			1,153
Total gross deferred tax liabilities	$	18,422		$	24,108
Net deferred tax assets	$	56,079		$	49,583

Current deferred income tax liabilities of $-0- and $21,000 of as of June 30, 2013 and 2012, respectively, are included in accrued and other liabilities, and noncurrent deferred income tax liabilities of $170,000 and $627,000 as of June 30, 2013 and 2012, respectively, are included in other liabilities in the accompanying Consolidated Balance Sheets.

The Company has not provided income taxes on approximately $15.2 million and $12.1 million of undistributed earnings as of June 30, 2013 and 2012, respectively, from certain foreign subsidiaries. The Company plans to permanently invest the earnings in the foreign subsidiaries and therefore has not recorded a deferred tax liability associated with the undistributed earnings. A determination of the potential deferred tax liability which would result from these earnings is not practicable at this time.

At June 30, 2013, the Company had net operating loss carryforwards for U.S. federal income tax purposes of approximately $4.5 million. The entire amount of the net operating loss carryforwards are subject to limitations under Section 382 of the Internal Revenue Code. Section 382 limits the amount of carryforwards available per year for use against future taxable income. Based on the Company's recent history of taxable income and projections of taxable income in the future, the Company expects to utilize all of its federal net operating loss carryforwards. The Company also has net operating losses in several foreign jurisdictions totaling approximately $16.7 million. Based on the Company's recent history of taxable income and projections of taxable income in the future, the Company expects to

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BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

utilize all of its foreign net operating loss carryforwards and, therefore, no valuation allowance has been established for these losses.

The Company's subsidiary in India operated under a tax holiday that expired in March 2011.

The Company recorded $20.4 million and $6.4 million as an increase to stockholder's equity for certain tax benefits from employee share-based compensation for the years ended June 30, 2013 and 2012, respectively.

The Company had $15.6 million and $12.7 million of liabilities for unrecognized tax benefits as of June 30, 2013 and 2012, respectively. Of these amounts, $15.5 million and $12.7 million, respectively, if recognized, would impact the Company's effective tax rate. The Company recognizes interest and penalties related to unrecognized tax benefits as tax expense. As of June 30, 2013 and 2012, the Company had accrued interest and penalties of $2.1 million and $1.7 million, respectively. The Company increased the accrual of interest and penalties by $0.4 million and $0.4 million during the years ended June 30, 2013 and 2012, respectively.

Changes to the balance of unrecognized tax benefits are as follows:

	June 30,
	2013			2012
	(in 000s)
Balance, beginning of year	$	12,707		$	8,364
Additions based on tax provisions related to current year		2,361			3,099
Additions for tax positions of prior years		578			1,461
Reductions for tax positions of prior years		—			(128	)
Lapse of statute of limitations		(75	)		(36	)
Foreign currency translation adjustment		7			(53	)
Balance, end of year	$	15,578		$	12,707

The Internal Revenue Service ("IRS') commenced examination of the Company's United States federal income tax returns for 2006 through 2009 during fiscal year 2011. The IRS completed its field examination of the open tax years and issued a Revenue Agent's Report in January 2012. The Company filed a formal protest regarding certain unagreed adjustments in March 2012 and the case was assigned to the IRS Appeals Office in Laguna Niguel, California. In June 2013, the Company agreed to settle all remaining issues with the IRS which was approved by the Joint Committee on Taxation in July 2013. Consequently, the Company expects to receive a refund of approximately $7.1 million and will reduce unrecognized tax benefits by approximately $8.0 million with a corresponding reduction to the income tax provision of approximately $3.6 million in the first quarter of fiscal 2014.

Including the IRS case described above, it is reasonably possible that the Company's amount of unrecognized tax benefits may decrease within the next twelve months by a range up to $9.5 million.

The Company files numerous consolidated and separate income tax returns in the United States and various state and foreign jurisdictions. The Company is currently under examination in certain states and foreign jurisdictions. With few exceptions, the Company is no longer subject to United States federal, state and local, or foreign income tax examinations for years before fiscal year 2006.

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BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12.   COMMITMENTS AND CONTINGENCIES

Commitments

The Company is obligated under several agreements to pay certain royalties on the sale or rental of gaming devices. In addition, the Company has obtained the rights to certain game themes and intellectual property that call for payment of royalties based on either fixed amounts or variable amounts based on game performance. Total royalty expense for the Company for the years ended June 30, 2013, 2012 and 2011 was $21.6 million, $20.8 million and $11.5 million, respectively, and is included in the cost of gaming equipment and systems in the accompanying consolidated statements of operations. In addition, the Company has obtained the rights to certain game themes and intellectual property that call for payment of royalties based on either fixed amounts or variable amounts based on game performance.

Litigation

The Company is subject to legal proceedings, claims and investigations in the ordinary course of business, including claims of alleged infringement of third-party patents and other intellectual property rights, indemnification claims, commercial, employment, regulatory and other matters. Liabilities related to such matters are recorded when it is both probable that a liability has been incurred and the amount of the liability can be reasonably estimated. All legal costs associated with litigation are expensed as incurred.

In February 2012, HBG filed requests for arbitration in the National and International Chamber of Arbitration of Milan, Italy, against the Company's Dutch and Italian subsidiaries ("Bally Netherlands" and "Bally Italy", respectively). HBG alleged breach of contract (i) by Bally Netherlands in connection with a contractual arrangement pursuant to which the Company agreed to supply certain gaming equipment and (ii) by Bally Italy in connection with €15 million in financial assistance provided by Bally Italy for HBG's acquisition of licenses to operate gaming equipment in certain Italian markets. The Company responded in March 2012 denying the allegations and seeking to dismiss HBG's claims, asserting counterclaims against HBG for breach of contract, and seeking equitable relief compelling HBG to perform its contractual obligations as well as an undetermined amount of monetary damages. On July 29, 2013, the parties entered into a settlement agreement pursuant to which they agreed to waive all claims, terminate the arbitration and all contractual arrangements, and HBG agreed to repay the Company €15 million in graduated monthly installments over four years from July 2013 to June 2017. Termination of the arbitral proceedings is pending the Arbitral Tribunal's approval of the parties' joint requests for termination which is expected in September 2013.

In April 2006, International Game Technology ("IGT") filed a patent infringement lawsuit against the Company in the United States District Court for the District of Delaware. The complaint asserted that the Company's Bally Power Bonusing products infringe patents held by IGT, and sought injunctive relief and damages in unspecified amounts. In April 2009, the district court issued an order finding that two of the Company's products, ACSC Power Winners and ACSC Power Reward, infringe some patent claims asserted by IGT, but not others. Both parties appealed. In the meantime, the Company undertook technical changes to ensure non-infringement for the two products partially in question. In October 2011, the Federal Circuit Court of Appeals affirmed the district court's decision, and the case was remanded back to the district court for discovery and trial on the issue of damages. In October 2012, the parties entered into a settlement and license agreement ending the case.

In December 2004, IGT filed a patent infringement lawsuit against the Company in the United States District Court for the District of Nevada. The complaint asserted that the Company's wheel-based

F-40

BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

games, its games with a reel in the top box and its iVIEW™ products infringed on patents held by IGT, and sought injunctive relief and damages in unspecified amounts. As part of the defense, the Company asserted counterclaims seeking damages and other relief against IGT, including claims that IGT's patents were invalid, unenforceable and not infringed, as well as several claims that IGT engaged in anti-competitive conduct in violation of state and federal antitrust laws. In October 2008, the court granted the Company's motions for summary judgment, ruling that IGT's two "wheel" patents and a touch-screen player-tracking patent were invalid; that even if the patents were valid, the Company's wheel-based games at issue would not infringe; and that certain of its iVIEW products do not infringe the two asserted player- tracking patents. The summary judgment determinations were upheld by the Federal Circuit Court of Appeals. Upon remand, the District Court granted summary judgment in favor of IGT on the remaining portion of the case regarding IGT's alleged antitrust violations and in favor of Bally on IGT's remaining claim that Bally infringed an IGT player tracking patent. The Company appealed the summary judgment on Bally's antitrust claims against IGT, and on December 17, 2012, a divided panel of the Federal Circuit Court of Appeals affirmed. The Company's petition for rehearing by the full court was denied on January 29, 2013.

In October 2010, WMS Gaming Inc. ("WMS") filed a patent infringement lawsuit against the Company in the United States District Court for the District of Northern Illinois. The complaint asserted that several of the Company's products using iReel displays infringe two WMS patents and sought injunctive relief and damages in unspecified amounts. WMS later amended its complaint to assert three additional patents related to the use of a video screen in conjunction with a gaming machine using mechanical reels also infringe certain WMS patents. As part of its response, the Company asserted counterclaims seeking damages and other unspecified relief against WMS for violation of certain Company patents, including claims that the WMS patents are invalid, unenforceable, and not infringed. In November 2011, the Company and WMS entered into a settlement and license agreement to end the litigation. As part of the agreement, the Company obtained a license to the WMS and Aruze Transmissive Reels® gaming technology portfolio under confidential terms.

The Company is also a party to various claims and lawsuits relating to routine matters that arise from time to time in the ordinary course of its' business. Although, management does not currently believe that the outcome of such claims, including the matters discussed above, in the aggregate, will have a material effect on its consolidated financial position, results of operations or cash flows, these matters are subject to inherent uncertainties and management' s view of these matters may change in the future.

As of June 30, 2013, the Company accrued aggregate liabilities of $6.7 million in other current liabilities for its contingent legal matters. Were unfavorable final outcomes to occur, there exists the possibility of a material adverse impact on the Company's financial statements for the period in which the effects become reasonably estimable.

13.   SEGMENT AND GEOGRAPHICAL INFORMATION

We operate in one industry segment: the design, manufacture, operation, and distribution of advanced technology-based gaming solutions. Our Chief Executive Officer is our Chief Operating Decision Maker. Our management reviews financial information presented on a consolidated basis, accompanied by disaggregated information it receives from its internal management system about revenues by Gaming Equipment, which includes the sale of gaming devices and related equipment, parts and conversion kits; Gaming Operations, which includes the operation of wide-area progressive, video lottery and centrally determined systems and the rental of gaming devices and content; and Systems,

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BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

which includes the sale and support of computerized monitoring systems and related recurring hardware and software maintenance revenue.

The following is a summary of revenues and gross margin:

	Year Ended June 30,
	2013		2012		2011
	(in 000s)
Revenues:
Gaming Equipment and Systems
Gaming Equipment	$	339,842	$	310,651	$	246,514
Gaming Operations		404,978		357,417		318,621
Systems		252,219		211,691		193,020
Total revenues	$	997,039	$	879,759	$	758,155
Gross Margin(1):
Gaming Equipment and Systems
Gaming Equipment	$	170,629	$	139,845	$	112,096
Gaming Operations		282,790		257,737		229,801
Systems		192,627		155,861		142,602
Total gross margin	$	646,046	$	553,443	$	484,499

(1)

Gross Margin from Gaming Equipment and Systems excludes amortization related to certain intangibles including core technology and license rights, which are included in depreciation and amortization.

The Company has operations based primarily in the United States as well as significant sales and distribution offices based in Europe, and other foreign locations, including South America. The table below presents information as to the Company's revenues, operating income and identifiable assets by geographic region which is determined by country of destination:

	Year Ended June 30,
	2013		2012		2011
	(in 000s)
Revenues:
United States and Canada	$	826,975	$	716,075	$	619,219
International		170,064		163,684		138,936
Total revenues	$	997,039	$	879,759	$	758,155
Operating income:
United States and Canada	$	214,527	$	159,324	$	135,096
International		20,983		20,119		16,439
Total operating income	$	235,510	$	179,443	$	151,535
Identifiable assets:
United States and Canada	$	742,900	$	730,758	$	692,778
International		236,365		239,709		234,616
Total identifiable assets	$	979,265	$	970,467	$	927,394

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BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

14.   401(k) PLAN

The Company is the sponsor of the Bally Technologies, Inc. 401(k) Savings Plan (the "401(k) Plan"). The 401(k) Plan was adopted for domestic employees of Bally Technologies, Inc. and all its domestic subsidiaries. Employees may enroll in the plan after meeting certain age and length of employment criteria, and plan participants may defer up to 25% of their compensation, up to certain IRS imposed limitations.

The Company matches 50% of any participant's contributions, up to the first 6% of their compensation (as defined in the plan document). Company matching contributions totaled approximately $2.4 million, $2.2 million and $1.9 million for each of the years ended June 30, 2013, 2012 and 2011, respectively.

For participants hired through December 31, 2000, employee and employer matching contributions are 100% vested immediately. For employees hired on or after January 1, 2001, vesting of the employer match is on a 20%, 5-year vesting schedule. Effective October 1, 2005, vesting of employer match is on a 25%, 4-year vesting schedule.

15.   SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

	Fiscal Year 2013 Quarterly Results
	September 30,			December 31,			March 31,			June 30,
	(in 000s, except per share data)
Statement of Operations Data:
Revenues	$	235,151		$	238,339		$	259,147		$	264,402
Cost of revenues		86,347			81,540			91,411			91,695
Selling, general and administrative		64,516			67,852			72,218			72,099
Research and development costs		25,095			26,599			29,098			30,326
Income from operations before income taxes		49,373			52,467			55,933			58,502
Income tax expense		(18,429	)		(19,389	)		(17,527	)		(21,229	)
Income from operations		30,944			33,078			38,406			37,273
Less net loss attributable to noncontrolling interests		(1,588	)		(48	)		(43	)		(64	)
Net income attributable to Bally Technologies, Inc.	$	32,532		$	33,126		$	38,449		$	37,337
Basic earnings per share attributable to Bally Technologies, Inc.:
Basic earnings per share	$	0.80		$	0.82		$	0.95		$	0.96
Diluted earnings per share attributable to Bally Technologies, Inc.:
Diluted earnings per share	$	0.77		$	0.80		$	0.93		$	0.95

F-43

BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

	Fiscal Year 2012 Quarterly Results
	September 30,			December 31,			March 31,			June 30,
	(in 000s, except per share data)
Statement of Operations Data:
Revenues	$	194,967		$	210,457		$	228,540		$	245,795
Cost of revenues		71,333			77,931			84,063			92,989
Selling, general and administrative		57,222			61,304			63,764			72,753
Research and development costs		23,386			22,377			24,838			25,581
Income from operations before income taxes		32,262			38,972			47,627			45,598
Income tax expense		(11,853	)		(14,688	)		(17,713	)		(19,295	)
Income from operations		20,409			24,284			29,914			26,303
Less net income (loss) attributable to noncontrolling interests		17			16			(53	)		(218	)
Net income attributable to Bally Technologies, Inc.	$	20,392		$	24,268		$	29,967		$	26,521
Basic earnings per share attributable to Bally Technologies, Inc.:
Basic earnings per share	$	0.47		$	0.57		$	0.70		$	0.63
Diluted earnings per share attributable to Bally Technologies, Inc.:
Diluted earnings per share	$	0.45		$	0.54		$	0.67		$	0.61

16.   SUBSEQUENT EVENTS

On July 16, 2013, the Company entered into a definitive agreement to acquire SHFL entertainment, Inc. ("SHFL") at a per share price of $23.25 in cash for total consideration of approximately $1.3 billion. The transaction is subject to approval by SHFL's shareholders, required regulatory and other approvals and customary closing conditions. The Company has obtained committed financing to complete the acquisition and the transaction is not subject to a financing contingency.

A number of putative class actions and shareholder derivative actions challenging the transaction have been filed against the Company, Manhattan Merger Corp., SHFL, and SHFL's directors in various jurisdictions that generally allege breach of fiduciary duties and that the entity defendants aided and abetted those alleged breaches, and seek, among other relief, declaratory judgment and an injunction against the transaction. The outcome of these lawsuits cannot be predicted with any certainty. An adverse judgment for monetary damages could have a material adverse effect on the operations and liquidity of the Company. A preliminary injunction could delay or jeopardize the completion of the transaction, and an adverse judgment granting permanent injunctive relief could indefinitely enjoin completion of the transaction. The Company believes that the claims asserted against it in the lawsuits are without merit and is defending against them vigorously. Additional lawsuits arising out of or relating to the transaction may be filed in the future.

In August 2013, the Company entered into Amendment No. 1 to the Second Amended and Restated Credit Agreement (see Note 7 to consolidated financial statements, Long-Term Debt) to, among other things, permit the acquisition of SHFL, allow for an incremental term loan B facility in an amount not exceeding $1.1 billion to be used to finance the acquisition of SHFL, allow for additional incremental facilities not exceeding $250 million plus an additional amount such that, on a pro forma basis, the

F-44

BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Company's consolidated total leverage ratio would be less than 3.50 to 1.00, and increase the maximum permitted consolidated total leverage ratio to 4.75 to 1.0. Loans will bear interest at a variable rate equal to either the applicable base rate or LIBOR, plus an interest margin determined by the Company's consolidated total leverage ratio, with a range of base rate margins from 25 basis points to 175 basis points and a range of LIBOR margins from 125 basis points to 275 basis points.

The amendments to the Second Amended and Restated Credit Agreement will become effective when specified conditions precedent, including consummation of the acquisition of SHFL, are met.

F-45

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS

Years ended June 30, 2013, 2012 and 2011

	Balance at Beginning of Year		Additions		Net Write-offs/ (Recoveries)		Balance at End of Year
	(in 000s)
Allowance for doubtful accounts (current and long-term):
Year Ended June 30, 2013(1)	$	17,102	$	11,173	$	11,698	$	16,577
Year Ended June 30, 2012	$	11,566	$	9,863	$	4,327	$	17,102
Year Ended June 30, 2011(1)	$	15,143	$	7,963	$	11,540	$	11,566

(1)

Net Write-offs in fiscal year 2013 and 2011 include $2.9 million and $5.5 million, respectively, related to development financing.

F-46

EX-3.3

Exhibit 3.3

FILED # C1917.5-68	File # C1917.5-1968
APR 1 6 2002
ON THE OFFICE OF
/s/ Dean Heller
DEAN HELLER SECRETARY OF STATE

ALLIANCE GAMING CORPORATION

CERTIFICATE OF INCREASE IN NUMBER OF

AUTHORIZED SHARES OF COMMON STOCK

The undersigned officer of Alliance Gaming Corporation, a Nevada corporation (the “Company”), hereby certifies, pursuant to Nevada Revised Statutes (“NRS”) $78.209, that the Company has, pursuant to NRS $78.207, effected an increase in the number of shares of its authorized common stock as follows:

(a)           Prior to the increase in the number of shares of authorized common stock the Company is authorized to issue 50,000,000 shares of common stock, $0.10 par value per share, and 10,000,000 shares of special stock, $0.10 per value per share;

(b)           As a result of the increase and on the Effective Date (as described below), the Company will be authorized to issue 100,000,000 shares of common stock, $0.10 per value per share, and 10,000,000 authorized shares of special stock, $0.10 per value per share;

(c)           As a result of the increase and upon the Effective Date, the outstanding shares of common stock shall be doubled by issuing two shares of common stock in exchange for each one outstanding share;

(d)           The increase did not require the approval of the stockholders of the Company; and

(e)           The increase will be effective (the “Effective Date”) on April 8, 2002.

Dated March 20, 2002

ALLIANCE GAMING CORPORATION

By:	/s/ Mark Lerner
Name: Mark Lerner
Title: Secretary

EX-10.21

Exhibit 10.21

FOURTH AMENDMENT TO
HADDRILL EMPLOYMENT AGREEMENT

This Fourth Amendment to the Employment Agreement (the “Fourth Amendment”) is made and entered into as of February  13, 2008 (the “Effective Date”), by and between Bally Technologies, Inc., a Nevada corporation (the “Company”), and Richard Haddrill (“Haddrill”).

WHEREAS, the Company and Haddrill are parties to that certain Employment Agreement dated as of June 30, 2004, as amended on December 22, 2004, June 13, 2005 and June 20, 2006 (as amended, the “Employment Agreement”) pursuant to which Haddrill is employed as the Company’s Chief Executive Officer;

WHEREAS, the Employment Agreement is scheduled to terminate on January 1, 2009 (the “Original Expiration Date”); and

WHEREAS, the Company and Haddrill desire to further amend the Employment Agreement to grant additional non-statutory stock options and restricted stock units and to provide for the automatic extension of the term of the Employment Agreement beyond January 1, 2009, in each case, in accordance with and subject to the terms and conditions of this Fourth Amendment.

NOW THEREFORE, on the basis of the foregoing premises and in consideration of the mutual covenants and agreements contained herein, the parties hereto agree as follows:

1.The Company and Haddrill agree that Section 3 of the Employment Agreement is hereby deleted in its entirety and replaced with the following:

“3.Term. The term of this Agreement will commence on a mutually agreeable date (the “Commencement Date”), which shall not be later than October 1, 2004. The term of this Agreement and Haddrill’s employment by the Company hereunder will continue, unless earlier terminated pursuant to Section 7 of this Agreement, through January 1, 2009 and shall thereafter be automatically renewed for an indefinite number of one (1) year periods unless either party gives written notice to the other party of its intention not to renew at least ninety (90) days prior to the expiration of said term.”

2.During the term of the Employment Agreement, (i) Haddrill will continue to receive the compensation and benefits currently provided to him on the terms and conditions set forth in Sections 4(a) and (b) of the Employment Agreement, (ii) Haddrill’s base salary will remain at $998,000 per year and (iii) Haddrill will continue to be entitled to five weeks of vacation time per year.

3.The Company shall grant Haddrill additional non-statutory stock options (the “Additional Options”) to acquire 50,000 shares of the Company’s common stock under the Company’s Amended and Restated 2001 Long Term Incentive Plan (the “Plan”). The grant date of the Additional Options shall be February 22, 2008. The Additional Options shall be granted at an exercise price per share equal to the closing price of the stock on the grant date. The Additional Options shall vest and be subject to the terms and conditions set forth in the Plan and on Schedule A-2.

1

4.The Company shall grant Haddrill a number of restricted stock units under the Plan (the “Additional Restricted Stock Units”) having a value equal to $1 million dollars, as calculated in accordance with Schedule B-2 hereto. The grant date of the Additional Restricted Stock Units shall be February 22, 2008. The Additional Restricted Stock Units shall vest and be subject to the terms and conditions set forth in the Plan and on Schedule B-2 hereto.

5.Except as expressly modified by this Fourth Amendment, the Employment Agreement shall remain unchanged and shall remain in full force and effect.

 [signatures on next page]

2

IN WITNESS WHEREOF, the Company and Haddrill have duly executed this Fourth Amendment as of the date first above written.

BALLY TECHNOLOGIES, INC.

By:

Name:

Title:

Richard Haddrill

3

Schedule A-2

ADDITIONAL OPTIONS

1.The Additional Options shall vest as follows:  (i) 16,667 shares shall vest on June 30, 2009, (ii) an additional 16,667 shares shall vest on December 31, 2009, and (iii) the final 16,666 shares shall vest on June 30, 2010, in each case, so long as Haddrill remains in continuous service with the Company through each such date.

2.If Haddrill’s employment with the Company is terminated under paragraphs 7(b) or 7(c) of the Employment Agreement, and such termination of employment occurs after January 1, 2009, in addition to the other compensation and benefits provided under the Employment Agreement, the vesting of the Additional Options shall be pro-rated through the month in which the date of termination occurs (taking into account that portion of the award that has already vested in accordance with its terms), based upon the number of full months between January 1, 2009, and the date of Haddrill’s termination of employment divided by 18 months.

3.In addition to the above, notwithstanding any provision of the Employment Agreement, or the Plan to the contrary, in the event of a Change of Control (as defined in the Employment Agreement): (i) if such Change of Control is consummated on or prior to January 1, 2009, and, within one year following such Change of Control Haddrill’s service with the Company (or any successor) is terminated under paragraphs 7(b) or 7(c) of the Employment Agreement, the Additional Options shall become immediately and fully vested and exercisable effective as of immediately prior to the date of such termination of service and (ii) if such Change of Control is consummated after January 1, 2009, the Additional Options shall become immediately and fully vested and exercisable effective as of immediately prior to such Change of Control.

4.Once the Additional Options become vested and exercisable hereunder, they shall remain exercisable until the seventh anniversary of the date of grant thereof without regard to whether Haddrill remains in continuous service with the Company through such date.

5.Except as described in this Schedule A-2, upon a termination of Haddrill’s service with the Company (or any successor) for any reason, the unvested portion of the Additional Options at the time of such termination of service (after giving effect to the accelerated vesting, if any, described in this Schedule A-2, if any) shall terminate effective as of the date of termination.

4

Schedule B-2

ADDITIONAL RESTRICTED STOCK UNITS

1.The number of shares of common stock subject to the Additional Restricted Stock Units shall be determined by dividing $1 million dollars by the average per share closing price of the Company’s common stock on the stock exchange in which the stock is principally traded for the 20 business days immediately prior to the date of the grant.

2.The Additional Restricted Stock Units shall vest as follows:  (i) 50% of the units shall vest on June 30, 2009 and (ii) the remaining 50% of the units shall vest on January 1, 2010, in each case, so long as Haddrill remains in continuous service with the Company through each such date.

3.If Haddrill’s employment with the Company is terminated under paragraphs 7(b) or 7(c) of the Employment Agreement, and such termination occurs after January 1, 2009, in addition to the other compensation and benefits provided under the Employment Agreement, the vesting of the Additional Restricted Stock Units will accelerate in full as of the termination date.

4.In addition to the above, notwithstanding any provision of the Employment Agreement, or the Plan to the contrary, in the event of a Change of Control (as defined in the Employment Agreement): (i) if such Change of Control is consummated on or prior to January 1, 2009, and, within one year following such Change of Control Haddrill’s service with the Company (or any successor) is terminated under paragraphs 7(b) or 7(c) of the Employment Agreement, the Additional Restricted Stock Units shall become immediately and fully vested and exercisable effective as of immediately prior to the date of such termination of service and (ii) if such Change of Control is consummated after January 1, 2009, the Additional Restricted Stock Units shall become immediately and fully vested and exercisable effective as of immediately prior to such Change of Control.

5.Each vested Additional Restricted Stock Unit represents Haddrill’s right to receive one share of the Company’s common stock on the applicable vesting date (subject to the terms and conditions of the Plan, including the satisfaction of any tax withholding obligations).

6.Except as described in this Schedule B-2, upon a termination of Haddrill’s service with the Company (or any successor) for any reason, the unvested portion of the Additional Restricted Stock Units at the time of such termination of service (after giving effect to the accelerated vesting, if any, described in this Schedule B-2, if any) shall be forfeited effective as of the date of termination.

5

EX-10.28

Exhibit 10.28

RESTRICTED STOCK UNIT AGREEMENT

Grantee: Ramesh Srinivasan	Grant Date: December 14, 2012
Plan: 2010 Long-Term Incentive Plan	Number of Units: 66,122 (target)

RESTRICTED STOCK UNIT AGREEMENT (this “Agreement”) dated as of the Grant Date specified above between Bally Technologies, Inc., a Nevada corporation (the “Company”), and the Grantee specified above, pursuant to the Plan specified above as in effect and as amended from time to time.

1.Incorporation By Reference. This Agreement is subject in all respects to the terms and provisions of the Plan, all of which are by this reference made a part of and incorporated in this Agreement.  Any capitalized term not defined in this Agreement shall have the meaning ascribed to it in the Plan.  If and to the extent this Agreement and the Plan conflict, the Plan shall control.

2.Grant of Restricted Stock Units. The Company grants to the Grantee, as of the Grant Date specified above, an award of a number of restricted stock units equal to the Number of Units specified above (the “Restricted Stock Units”).  Each Restricted Stock Unit represents the right of the Grantee to receive one share of the common stock, $.10 par value, of the Company (the “Shares”) pursuant to the terms and conditions of this Agreement.

3.Vesting of the Restricted Stock Units. Except as otherwise provided in the Employment Agreement, dated as of November 14, 2012, between the Company and the Grantee, as amended from time to time (the “Employment Agreement”), the Restricted Stock Units shall vest (i.e., become nonforfeitable) in accordance with Appendix A, attached hereto, so long as the Grantee remains in continuous service with the Company through any applicable vesting date.  Restricted Stock Units that have vested and are no longer subject to forfeiture are referred herein to as “Vested Units.”  Restricted Stock Units that have not yet vested and thus remain subject to forfeiture are referred herein to as “Unvested Units.”

4.Settlement of Restricted Stock Units.  Each Vested Unit will be settled by the delivery of one Share (subject to adjustment under the Plan) to the Grantee or, in the event of the Grantee’s death, to the Grantee’s estate, heir or beneficiary, on the applicable vesting date; provided that the Grantee has satisfied all of the tax withholding obligations in connection with the vesting of the award, and that the Grantee has completed, signed and returned any documents and taken any additional action that the Company deems appropriate to enable it to accomplish the delivery of the Shares.  No fractional shares will be issued under this Agreement.

5.Rights as a Stockholder. The Grantee shall have no rights as a stockholder (including, without limitation, any voting rights with respect to the Shares subject to the Restricted Stock Units) with respect to either the Restricted Stock Units granted hereunder or the Shares underlying the Restricted Stock Units, unless and until such Shares are issued in respect of Vested Units, and then only to the extent of such issued Shares.

6.Forfeiture of Unvested Units. Except as otherwise provided in the Employment Agreement or any amendment thereto, if the Grantee’s service with the Company ceases, all Unvested Units shall be immediately forfeited.

7.Withholding Taxes. The Company has the right to deduct or otherwise effect a withholding of the amount of any taxes (including, but not limited to, any FICA, FUTA, and similar taxes) required by federal, state, local or foreign laws to be withheld or otherwise deducted and paid with respect to the grant, vesting or settlement of the Restricted Stock Units; or, in lieu of such withholding, to require that the Grantee

1

pay to the Company in cash (or, at the sole discretion of the Board or the Committee, in the form of Shares) the amount of any taxes required to be withheld or otherwise deducted and paid by the Company or its Subsidiary in connection with the grant, vesting or settlement of the Restricted Stock Units.  Unless the tax withholding obligations of the Company or any affiliate are satisfied, the Company will have no obligation to issue a certificate for any of the Shares subject to the Restricted Stock Units (whether vested or unvested).

8.Non-transferability. Neither the Grantee nor the Grantee’s beneficiaries shall sell, exchange, transfer, assign, or otherwise dispose of any Restricted Stock Units (whether vested or unvested) or any rights or interests therein (including any Shares subject to Restricted Stock Units (whether vested or unvested) that have not yet been delivered to the Grantee).  The Grantee shall not pledge, encumber, or otherwise hypothecate the Restricted Stock Units (whether vested or unvested) or any rights or interests therein (including any Shares subject to Restricted Stock Units (whether vested or unvested) that have not yet been delivered to the Grantee) in any way at any time.  The Restricted Stock Units (and any undelivered Shares subject thereto) shall not be subject to execution, attachment, or similar legal process.  Any attempted sale, pledge, or other disposition of the Restricted Stock Units (or any undelivered Shares subject thereto) in violation of this paragraph shall be void and of no force or effect.

9.Entire Agreement; Amendment. This Agreement contains the entire agreement between the parties and supersedes other oral and written agreements previously entered into by the parties concerning the same subject matter.  This Agreement may be modified or rescinded only with the written consent of both parties.

10.Governing Law. Nevada law shall govern this Agreement and its interpretation.  The issuance of the Restricted Stock pursuant to this Agreement shall be subject to, and shall comply with, any applicable requirements of any federal and state securities laws, rules, and regulations (including but not limited to the Securities Act, the Exchange Act, and the respective rules and regulations promulgated thereunder) and any other applicable law or regulation.

11.Binding Effect. This Agreement shall bind and inure to the benefit of the Company and its successors and assigns.

12.Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which, taken together, shall constitute one and the same instrument.

BALLY TECHNOLOGIES, INC.
By:	/s/ Neil Davidson	/s/ Ramesh Srinivasan
	Neil Davidson	Ramesh Srinivasan

2

Appendix A

The Restricted Stock Units shall vest as follows, subject to continued employment through the applicable vesting date.

1)Vesting.

a)For each Performance Period:

i)22,040 Restricted Stock Units shall vest if the CAGR of the Company’s TSR is 10 percent;

ii)11,020 Restricted Stock Units shall vest if the CAGR of the Company’s TSR is 8 percent;

iii)11,021 to 22,039 Restricted Stock Units (subject to linear interpolation) shall vest if the CAGR of the Company’s TSR is between 8 to 10 percent; and

iv)0 Restricted Stock Units shall vest if the CAGR of the Company’s TSR is below 8 percent.

b)Any Restricted Stock Units that could have, but did not vest in the first or second Performance Period, shall vest at the end of the second or third Performance Period, as applicable, as follows:

i)100 percent if the CAGR of the Company’s TSR is 10 percent;

ii)50 percent if the CAGR of the Company’s TSR is 8 percent; and

iii)50 to 100 percent (subject to linear interpolation) if the CAGR of the Company’s TSR is between 8 to 10 percent.

2)Definitions.

a)“CAGR” shall mean Compound Annual Growth Rate from the Starting Stock Price to the Closing Stock Price.

b)“Closing Stock Price” shall mean the average closing stock price over the 20-day trading period ending on the last trading day of the applicable Performance Period.

c)“Performance Period” shall mean each of the following three periods: December 14, 2012 – December 13, 2013, December 14, 2013 – December 13, 2014 and December 14, 2014 – December 13, 2015.

d)“Starting Stock Price” shall mean the average closing stock price over the 20-day trading period ending on the Grant Date.

e)“TSR” mean Total Shareholder Return.

3

EX-10.29

Exhibit 10.29

RESTRICTED STOCK UNIT AGREEMENT

Grantee: Ramesh Srinivasan	Grant Date: January 24, 2013
Plan: 2010 Long-Term Incentive Plan	Number of Units: 15,831 (target)

RESTRICTED STOCK UNIT AGREEMENT (this “Agreement”) dated as of the Grant Date specified above between Bally Technologies, Inc., a Nevada corporation (the “Company”), and the Grantee specified above, pursuant to the Plan specified above as in effect and as amended from time to time.

1.Incorporation By Reference. This Agreement is subject in all respects to the terms and provisions of the Plan, all of which are by this reference made a part of and incorporated in this Agreement.  Any capitalized term not defined in this Agreement shall have the meaning ascribed to it in the Plan.  If and to the extent this Agreement and the Plan conflict, the Plan shall control.

2.Grant of Restricted Stock Units. The Company grants to the Grantee, as of the Grant Date specified above, an award of a number of restricted stock units equal to the Number of Units specified above (the “Restricted Stock Units”).  Each Restricted Stock Unit represents the right of the Grantee to receive one share of the common stock, $.10 par value, of the Company (the “Shares”) pursuant to the terms and conditions of this Agreement.

3.Vesting of the Restricted Stock Units. Except as otherwise provided in the Employment Agreement, dated as of November 14, 2012, between the Company and the Grantee, as amended from time to time (the “Employment Agreement”), the Restricted Stock Units shall vest (i.e., become nonforfeitable) in accordance with Appendix A, attached hereto, so long as the Grantee remains in continuous service with the Company through any applicable vesting date.  Restricted Stock Units that have vested and are no longer subject to forfeiture are referred herein to as “Vested Units.”  Restricted Stock Units that have not yet vested and thus remain subject to forfeiture are referred herein to as “Unvested Units.”

4.Settlement of Restricted Stock Units. Each Vested Unit will be settled by the delivery of one Share (subject to adjustment under the Plan) to the Grantee or, in the event of the Grantee’s death, to the Grantee’s estate, heir or beneficiary, on the applicable vesting date; provided that the Grantee has satisfied all of the tax withholding obligations in connection with the vesting of the award, and that the Grantee has completed, signed and returned any documents and taken any additional action that the Company deems appropriate to enable it to accomplish the delivery of the Shares.  No fractional shares will be issued under this Agreement.

5.Rights as a Stockholder. The Grantee shall have no rights as a stockholder (including, without limitation, any voting rights with respect to the Shares subject to the Restricted Stock Units) with respect to either the Restricted Stock Units granted hereunder or the Shares underlying the Restricted Stock Units, unless and until such Shares are issued in respect of Vested Units, and then only to the extent of such issued Shares.

6.Forfeiture of Unvested Units. Except as otherwise provided in the Employment Agreement or any amendment thereto, if the Grantee’s service with the Company ceases, all Unvested Units shall be immediately forfeited.

7.Withholding Taxes. The Company has the right to deduct or otherwise effect a withholding of the amount of any taxes (including, but not limited to, any FICA, FUTA, and similar taxes) required by federal, state, local or foreign laws to be withheld or otherwise deducted and paid with respect to the grant, vesting or settlement of the Restricted Stock Units; or, in lieu of such withholding, to require that the Grantee

1

pay to the Company in cash (or, at the sole discretion of the Board or the Committee, in the form of Shares) the amount of any taxes required to be withheld or otherwise deducted and paid by the Company or its Subsidiary in connection with the grant, vesting or settlement of the Restricted Stock Units.  Unless the tax withholding obligations of the Company or any affiliate are satisfied, the Company will have no obligation to issue a certificate for any of the Shares subject to the Restricted Stock Units (whether vested or unvested).

8.Non-transferability. Neither the Grantee nor the Grantee’s beneficiaries shall sell, exchange, transfer, assign, or otherwise dispose of any Restricted Stock Units (whether vested or unvested) or any rights or interests therein (including any Shares subject to Restricted Stock Units (whether vested or unvested) that have not yet been delivered to the Grantee).  The Grantee shall not pledge, encumber, or otherwise hypothecate the Restricted Stock Units (whether vested or unvested) or any rights or interests therein (including any Shares subject to Restricted Stock Units (whether vested or unvested) that have not yet been delivered to the Grantee) in any way at any time.  The Restricted Stock Units (and any undelivered Shares subject thereto) shall not be subject to execution, attachment, or similar legal process.  Any attempted sale, pledge, or other disposition of the Restricted Stock Units (or any undelivered Shares subject thereto) in violation of this paragraph shall be void and of no force or effect.

9.Entire Agreement; Amendment. This Agreement contains the entire agreement between the parties and supersedes other oral and written agreements previously entered into by the parties concerning the same subject matter.  This Agreement may be modified or rescinded only with the written consent of both parties.

10.Governing Law. Nevada law shall govern this Agreement and its interpretation.  The issuance of the Restricted Stock pursuant to this Agreement shall be subject to, and shall comply with, any applicable requirements of any federal and state securities laws, rules, and regulations (including but not limited to the Securities Act, the Exchange Act, and the respective rules and regulations promulgated thereunder) and any other applicable law or regulation.

11.Binding Effect. This Agreement shall bind and inure to the benefit of the Company and its successors and assigns.

12.Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which, taken together, shall constitute one and the same instrument.

BALLY TECHNOLOGIES, INC.
By:	/s/ Neil Davidson	/s/ Ramesh Srinivasan
	Neil Davidson, Treasurer	Ramesh Srinivasan

2

Appendix A

The Restricted Stock Units shall vest as follows, subject to continued employment through the applicable vesting date.

1)Vesting.  For the Performance Period:

i)7,916 Restricted Stock Units shall vest if the CAGR of the Company’s TSR is 10.0 percent;

ii)15,831 Restricted Stock Units shall vest if the CAGR of the Company’s TSR is 12.5 percent;

iii)23,747 Restricted Stock Units shall vest if the CAGR of the Company’s TSR is 15.0 percent;

iv)If the CAGR of the Company’s TSR is between 10.0 to 12.5 percent or between 12.5 to 15.0 percent linear interpolation shall be applied to determine the number of Restricted Stock Units that shall vest; and

v)0 Restricted Stock Units shall vest if the CAGR of the Company’s TSR is below 10.0 percent.

2)Definitions.

a)“CAGR” shall mean Compound Annual Growth Rate from the Starting Stock Price to the Closing Stock Price.

b)“Closing Stock Price” shall mean the average closing stock price over the 20-day trading period ending on the last trading day of the Performance Period.

c)“Performance Period” shall mean: December 14, 2012 — December 13, 2015.

d)“Starting Stock Price” shall mean the average closing stock price over the 20-day trading period preceding the Performance Period start date.

e)“TSR” mean Total Shareholder Return.

3

EX-21

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Exhibit 21

Subsidiaries	State or Country of Incorporation
All subsidiaries are wholly owned except as indicated.
Bally Technologies, Inc.	Nevada
Alliance Holding Company	Nevada
Bally Gaming International, Inc.	Delaware
Bally Gaming, Inc.	Nevada
Bally Technologies India Private Limited	India
BGI Australia Pty. Limited	Australia
BGI Gaming & Systems, S. de R.L. de C.V.+	Mexico
Bally Gaming Services, LLC	Nevada
Bally Servicios, S. de R.L. de C.V.++	Mexico
Bally Gaming Africa (Proprietary) Ltd.	South Africa
Bally Gaming de Puerto Rico, Inc.	Puerto Rico
Bally Gaming and Systems, S.A.	Uruguay
Bally Gaming and Systems UK Limited	United Kingdom
Bally Gaming Hong Kong Limited	Hong Kong
Bally Gaming Canada Ltd.	Canada
Bally Gaming GP, LLC	Nevada
Bally Gaming LP, LLC	Nevada
Bally Technologies Bermuda, L.P.++++	Bermuda
Bally Gaming Netherlands II B.V.	Netherlands
Bally Gaming and Systems	France
Bally Gaming d.o.o.	Slovenia
Bally Gaming International GmbH	Germany
Bally Gaming Netherlands I B.V.	Netherlands
Bally Gaming Netherlands III B.V.	Netherlands
Importadora Bally Technologies Chile Limitada+++++	Chile
Bally Macau Limited+++	Macau
Bally Technologies (Gibraltar) Limited	Gibraltar
Bally Technologies Italy S.R.L. Unipersonale	Italy
Bally Technologies New Zealand Limited	New Zealand
Bally Technologies Singapore PTE. Ltd.	Singapore
Bally Technologies Spain, S.L.U.	Spain
Bally Technologies Colombia SAS	Colombia
Bally Technologies Malta Limited+	Malta
Compudigm Services, Inc.	Nevada
Sierra Design Group	Nevada
Arcade Planet, Inc.	California
Casino Electronics, Inc.	Nevada

+

99% owned by Bally Gaming, Inc. and 1% owned by Bally Gaming International, Inc.

++

99% owned by BGI Gaming & Systems and 1% owned by Bally Gaming Services, LLC

+++

90% owned by Bally Gaming Netherlands II B.V. and 10% owned by Bally Gaming Netherlands I B.V.

++++

99% owned by Bally Gaming LP, LLC and 1% owned by Bally Gaming GP, LLC

+++++

99.9% owned by Bally Gaming Netherlands III B.V. and 0.1% owned by Bally Gaming Netherlands I B.V.

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Exhibit 21

EX-23.1

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Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statements Nos. 333-20685, 333-115271, 333-105087, 333-81154, 333-34077, 333-115271, 333-149637, 333-122064 and 333-173190 on Form S-8 of our report dated August 27, 2013, relating to the consolidated financial statements and financial statement schedule of Bally Technologies, Inc. and subsidiaries, and the effectiveness of Bally Technologies, Inc. and subsidiaries internal control over financial reporting, appearing in this Annual Report on Form 10-K of Bally Technologies, Inc. and subsidiaries for the year ended June 30, 2013.

/s/ DELOITTE & TOUCHE LLP

Las Vegas, Nevada
August 27, 2013

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Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

EX-31.1

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Exhibit 31.1

CERTIFICATION

I, Ramesh Srinivasan, certify that:

1.

I have reviewed this Annual Report on Form 10-K of Bally Technologies, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b.

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 27, 2013

/s/ Ramesh Srinivasan
Ramesh Srinivasan
Chief Executive Officer
(Principal Executive Officer)

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Exhibit 31.1

EX-31.2

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Exhibit 31.2

CERTIFICATION

I, Neil P. Davidson, certify that:

1.

I have reviewed this Annual Report on Form 10-K of Bally Technologies, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b.

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 27, 2013

/s/ Neil P. Davidson
Neil P. Davidson
Senior Vice President, Chief
Financial Officer and Treasurer
(Principal Financial Officer)

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Exhibit 31.2

EX-32.1

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Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K for the fiscal year ended June 30, 2013 of Bally Technologies, Inc. (the "Company"), as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Ramesh Srinivasan, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.

The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Dated: August 27, 2013

/s/ Ramesh Srinivasan
Ramesh Srinivasan
Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

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Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

EX-32.2

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Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K for the fiscal year ended June 30, 2013 of Bally Technologies, Inc. (the "Company") as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Neil P. Davidson, Senior Vice President, Chief Financial Officer and Treasurer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.

The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Dated: August 27, 2013

/s/ Neil P. Davidson
Neil P. Davidson
Senior Vice President, Chief
Financial Officer and Treasurer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

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Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

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SHARE-BASED COMPENSATION

12 Months Ended

Jun. 30, 2013

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION

9.     SHARE-BASED COMPENSATION

Employee Stock Purchase Plan

The 2008 Employee Stock Purchase Plan (the "2008 ESPP") provides that eligible employees are able to contribute up to 10% of their eligible earnings towards the quarterly purchase of the Company's common stock. The employee's purchase price is equal to 85% of the fair market value. During the years ended June 30, 2013, 2012 and 2011, employees purchased 77,094, 76,526 and 67,730 shares of common stock for approximately $3.2 million, $2.6 million and $2.1 million, respectively.

Share-Based Award Plans

The Company's 2010 Long-Term Incentive Plan, which was an amendment and restatement of the Company's 2001 Long-Term Incentive Plan, as amended, (the "2010 Plan") provides for the issuance of up to 15,050,000 shares of common stock, with awards of restricted stock, restricted stock units ("RSUs") or performance stock units ("PSUs") reducing the 2010 Plan by 1.75 shares for every share granted. Generally, options are granted at the fair value of the Company's common stock at the date of grant and are exercisable for up to ten years.

The Company's 1996 Long-Term Incentive Plan (the "1996 Plan") provided for the issuance of up to 3,428,000 shares of common stock to Company employees, directors and designated paid consultants. Generally, options were granted at the fair value of the Company's common stock at the date of grant and are exercisable for up to ten years. No shares of common stock remain available under the 1996 Plan for the grant of new awards.

Restricted Stock and RSUs are converted into the right to receive common stock upon vesting. The Company permits the holders to satisfy their tax withholding requirements by net settlement, whereby the Company withholds a portion of the shares to cover the applicable taxes based on the fair market value of the Company's stock at the vesting date. During fiscal years 2013, 2012 and 2011, tax payments made were $10.1 million, $1.7 million and $3.2 million, respectively.

The Company issues new shares for shares delivered under the 1996 Plan, the 2010 Plan and the 2008 ESPP (collectively, the "Plans").

Stock option activity is summarized below:

				Weighted Average
	Shares			Exercise Price		Remaining Contractual Term		Aggregate Intrinsic Value
	(in 000s)			(per share)		(years)		(in 000s)
Balance outstanding as of June 30, 2012		2,545		$	26.40			$	51,655
Granted		30			46.78
Exercised		(1,385	)		24.06
Forfeited or expired		(20	)		31.77
Balance outstanding as of June 30, 2013		1,170		$	29.60		3.20	$	31,391
Exercisable as of June 30, 2013		858		$	26.50		2.70	$	25,678

Restricted stock, PSU and RSU activity is summarized below:

	Restricted Stock			Weighted Average Grant Date Fair Value		RSUs / PSUs			Weighted Average Grant Date Fair Value
	(in 000s)			(per share)		(in 000s)			(per share)
Balance outstanding as of June 30, 2012		568		$	41.31		570		$	17.69
Granted		187			47.07		82			45.65
Released		(170	)		40.61		(570	)		17.69
Forfeited or expired		(14	)		39.87		—			—
Balance outstanding as of June 30, 2013		571		$	43.45		82			45.65

The following is additional information about stock options, restricted stock, PSUs and RSUs exercised, granted and vested during the periods:

	Year Ended June 30,
	2013		2012		2011
	(in 000s, except per share amounts)
Weighted average grant-date fair value per share:
Stock options granted	$	18.07	$	17.04	$	16.86
Stock options vested	$	15.55	$	16.05	$	11.47
Restricted stock, PSUs and RSUs vested	$	40.86	$	39.34	$	33.31
Total grant-date fair value of stock options vested	$	4,481	$	6,097	$	6,458
Total grant-date fair value of restricted stock, PSUs and RSUs vested	$	8,663	$	7,289	$	8,962
Exercises under all share-based payment arrangements:
Total intrinsic value	$	35,324	$	26,973	$	37,915
Cash received	$	32,472	$	23,225	$	26,314
Tax benefit realized	$	20,447	$	6,390	$	8,718

Shares Reserved

The following shares are reserved for issue under the Plans:

	(in 000s)
Shares issued and currently outstanding		1,252
Shares available for future issuance		1,937
Total		3,189

Share-Based Compensation

The following table presents share-based compensation expense and related effect of the income tax benefit included in the Company's consolidated statements of operations:

	Year Ended June 30,
	2013			2012			2011
	(in 000s)
Selling, general and administrative	$	8,841		$	9,996		$	9,624
Research and development		4,500			3,956			3,104
Cost of gaming equipment and systems and operations		39			220			179
Share-based compensation expense before tax	$	13,380		$	14,172		$	12,907
Income tax benefit		(4,683	)		(4,960	)		(4,517	)
Net share-based compensation expense	$	8,697		$	9,212		$	8,390

Included in share-based compensation expense in the consolidated statements of operations for the years ended June 30, 2013, 2012 and 2011 is restricted stock amortization of $9.3 million, $8.9 million and $7.0 million, respectively.

As of June 30, 2013, there was $3.5 million of total unrecognized compensation expense related to the unvested portion of stock options which will be recognized over the subsequent 1.43 years. In addition, as of June 30, 2013, there was $20.5 million of total unrecognized compensation expense related to the unvested portion of restricted stock, PSUs and RSUs which will be recognized over the subsequent 1.71 years.

The Company estimates the fair value of stock options using the Black-Scholes valuation model. Key input assumptions used to estimate the fair value of stock options include the exercise price of the option, the expected option term, the expected volatility of the Company's common stock over the option's expected term, the risk-free interest rate over the option's expected term and the Company's expected annual dividend yield. The Company believes that the valuation technique and the approach utilized to develop the underlying assumptions are appropriate in calculating the fair values of the Company's stock options granted. Estimates of fair value are not intended to predict actual future events, or the value ultimately realized by the recipients of equity awards.

The fair value of each option granted during the periods referenced below was estimated on the grant date using the Black-Scholes valuation model with the following assumptions:

	Year Ended June 30,
	2013			2012			2011
Weighted Average:
Expected option term (in years)		4.17			4.36			4.61
Expected volatility		48.30	%		56.90	%		54.91	%
Risk-free interest rate		0.63	%		0.89	%		1.76	%
Expected annual dividend yield		0	%		0	%		0	%

The Company uses its historical exercise activity to estimated expected term. Expected volatility is based on historical market factors related to the Company's common stock. Risk-free interest rate is based on U.S. Treasury rates appropriate for the expected term.

The Company has granted certain PSU awards which contain performance goals related to total shareholder return. The Company utilized a Monte Carlo simulation to derive the grant date fair value of each award.

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LEASES (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2011
Operating rental expense
Equipment, auto and office space leases	$ 11,220	$ 9,273	$ 9,060
Sublease rental income		(317)	(357)
Equipment, auto and office space leases, net	11,220	8,956	8,703
Future minimum rental payments
2014	8,872
2015	6,594
2016	5,152
2017	3,059
2018	1,192
Thereafter	521
Total minimum payments	$ 25,390

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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Jun. 30, 2013		Jun. 30, 2012		Jun. 30, 2011
Revenues:
Gaming equipment and systems	$ 592,061		$ 522,342		$ 439,534
Gaming operations	404,978		357,417		318,621
Total revenues	997,039		879,759		758,155
Costs and expenses:
Cost of gaming equipment and systems	228,805	[1]	226,636	[1]	184,836	[1]
Cost of gaming operations	122,188		99,680		88,820
Selling, general and administrative	276,685		255,043		225,033
Research and development costs	111,118		96,182		88,086
Depreciation and amortization	22,733		22,775		19,845
Total costs and expenses	761,529		700,316		606,620
Operating income	235,510		179,443		151,535
Other income (expense):
Interest income	5,328		5,221		4,960
Interest expense	(18,120)		(17,378)		(11,984)
Loss on extinguishment of debt					(4,119)
Other, net	(6,443)		(2,827)		3,001
Income from continuing operations before income taxes	216,275		164,459		143,393
Income tax expense	(76,574)		(63,549)		(45,182)
Income from continuing operations	139,701		100,910		98,211
Discontinued operations:
Loss on sale of discontinued operations, net of tax					(403)
Loss from discontinued operations, net of tax					(403)
Net income	139,701		100,910		97,808
Less net loss attributable to noncontrolling interests	(1,743)		(238)		(455)
Net income attributable to Bally Technologies, Inc.	141,444		101,148		98,263
Basic earnings per share attributable to Bally Technologies, Inc.:
Income from continuing operations (in dollars per share)	$ 3.53		$ 2.35		$ 1.90
Loss on sale of discontinued operations (in dollars per share)					$ (0.01)
Basic earnings per share (in dollars per share)	$ 3.53		$ 2.35		$ 1.89
Diluted earnings per share attributable to Bally Technologies, Inc.:
Income from continuing operations (in dollars per share)	$ 3.45		$ 2.28		$ 1.82
Loss on sale of discontinued operations (in dollars per share)					$ (0.01)
Diluted earnings per share (in dollars per share)	$ 3.45		$ 2.28		$ 1.81
Weighted average shares outstanding:
Basic (in shares)	40,120		42,985		51,960
Diluted (in shares)	40,992		44,420		54,420
Amounts attributable to Bally Technologies, Inc.:
Income from continuing operations, net of tax	141,444		101,148		98,666
Loss on sale of discontinued operations, net of tax					(403)
Net income attributable to Bally Technologies, Inc.	$ 141,444		$ 101,148		$ 98,263

[1] Cost of gaming equipment and systems exclude amortization related to certain intangibles, including core technology and license rights, which are included in depreciation and amortization.

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EARNINGS PER SHARE

12 Months Ended

Jun. 30, 2013

EARNINGS PER SHARE

EARNINGS PER SHARE

2.     EARNINGS PER SHARE

Basic earnings per share are computed by dividing earnings by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share reflect the additional dilution from all potentially dilutive securities.

The following computation of basic and diluted earnings per share applicable to the Company's common stock is as follows:

	Year Ended June 30,
	2013		2012		2011
	(in 000s, except per share amounts)
Amounts attributable to Bally Technologies, Inc.:
Income from continuing operations, net of tax	$	141,444	$	101,148	$	98,666
Loss on sale of discontinued operations, net of tax		—		—		(403	)
Diluted earnings attributable to Bally Technologies, Inc.	$	141,444	$	101,148	$	98,263
Weighted average common shares outstanding		40,120		42,985		51,960
Dilutive effect of:
Stock options, Restricted Stock Units ("RSU") and restricted stock		872		1,435		2,459
Warrants		—		—		1
Weighted average diluted shares outstanding		40,992		44,420		54,420
Basic earnings per share attributable to Bally Technologies, Inc.:
Income from continuing operations	$	3.53	$	2.35	$	1.90
Loss on sale of discontinued operations		—		—		(0.01	)
Basic earnings per share	$	3.53	$	2.35	$	1.89
Diluted earnings per share attributable to Bally Technologies, Inc.:
Income from continuing operations	$	3.45	$	2.28	$	1.82
Loss on sale of discontinued operations		—		—		(0.01	)
Diluted earnings per share	$	3.45	$	2.28	$	1.81

Certain securities were excluded from the diluted per share calculation because their inclusion would be anti-dilutive. Such securities consist of the following:

	Year Ended June 30,
	2013		2012		2011
	(in 000s)
Stock options, RSU and restricted stock		70		574		688

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SUBSEQUENT EVENTS

12 Months Ended

Jun. 30, 2013

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

16.   SUBSEQUENT EVENTS

On July 16, 2013, the Company entered into a definitive agreement to acquire SHFL entertainment, Inc. ("SHFL") at a per share price of $23.25 in cash for total consideration of approximately $1.3 billion. The transaction is subject to approval by SHFL's shareholders, required regulatory and other approvals and customary closing conditions. The Company has obtained committed financing to complete the acquisition and the transaction is not subject to a financing contingency.

A number of putative class actions and shareholder derivative actions challenging the transaction have been filed against the Company, Manhattan Merger Corp., SHFL, and SHFL's directors in various jurisdictions that generally allege breach of fiduciary duties and that the entity defendants aided and abetted those alleged breaches, and seek, among other relief, declaratory judgment and an injunction against the transaction. The outcome of these lawsuits cannot be predicted with any certainty. An adverse judgment for monetary damages could have a material adverse effect on the operations and liquidity of the Company. A preliminary injunction could delay or jeopardize the completion of the transaction, and an adverse judgment granting permanent injunctive relief could indefinitely enjoin completion of the transaction. The Company believes that the claims asserted against it in the lawsuits are without merit and is defending against them vigorously. Additional lawsuits arising out of or relating to the transaction may be filed in the future.

In August 2013, the Company entered into Amendment No. 1 to the Second Amended and Restated Credit Agreement (see Note 7 to consolidated financial statements, Long-Term Debt) to, among other things, permit the acquisition of SHFL, allow for an incremental term loan B facility in an amount not exceeding $1.1 billion to be used to finance the acquisition of SHFL, allow for additional incremental facilities not exceeding $250 million plus an additional amount such that, on a pro forma basis, the Company's consolidated total leverage ratio would be less than 3.50 to 1.00, and increase the maximum permitted consolidated total leverage ratio to 4.75 to 1.0. Loans will bear interest at a variable rate equal to either the applicable base rate or LIBOR, plus an interest margin determined by the Company's consolidated total leverage ratio, with a range of base rate margins from 25 basis points to 175 basis points and a range of LIBOR margins from 125 basis points to 275 basis points.

The amendments to the Second Amended and Restated Credit Agreement will become effective when specified conditions precedent, including consummation of the acquisition of SHFL, are met.

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SUBSEQUENT EVENTS (Details) (SUBSEQUENT EVENT, USD $) In Millions, except Per Share data, unless otherwise specified		1 Months Ended						0 Months Ended	1 Months Ended
	Jul. 31, 2013 Amendment No. 1 to Second Amended and Restated Credit Agreement Maximum	Jul. 31, 2013 Amendment No. 1 to Second Amended and Restated Credit Agreement Base rate	Jul. 31, 2013 Amendment No. 1 to Second Amended and Restated Credit Agreement Base rate Minimum	Jul. 31, 2013 Amendment No. 1 to Second Amended and Restated Credit Agreement Base rate Maximum	Jul. 31, 2013 Amendment No. 1 to Second Amended and Restated Credit Agreement LIBOR	Jul. 31, 2013 Amendment No. 1 to Second Amended and Restated Credit Agreement LIBOR Minimum	Jul. 31, 2013 Amendment No. 1 to Second Amended and Restated Credit Agreement LIBOR Maximum	Jul. 16, 2013 SHFL	Jul. 31, 2013 SHFL Term loan B facility Maximum	Jul. 31, 2013 SHFL Facilities Maximum
Subsequent Events
Cash price per share (in dollars per share)								$ 23.25
Total consideration								$ 1,300.0
Incremental borrowings available									$ 1,100	$ 250
Consolidated total leverage ratio, before amendment	3.50
Consolidated total leverage ratio	4.75
Variable rate basis		base rate			LIBOR
Interest margin (as a percent)			0.25%	1.75%		1.25%	2.75%

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SHARE-BASED COMPENSATION (Details 3) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2011
Share-based Compensation
Share-based compensation expense before tax	$ 13,380	$ 14,172	$ 12,907
Income tax benefit	(4,683)	(4,960)	(4,517)
Net share-based compensation expense	8,697	9,212	8,390
Restricted stock
Share-based Compensation
Net share-based compensation expense	9,300	8,900	7,000
Selling, general and administrative
Share-based Compensation
Share-based compensation expense before tax	8,841	9,996	9,624
Research and development
Share-based Compensation
Share-based compensation expense before tax	4,500	3,956	3,104
Cost of gaming equipment and systems and gaming operations
Share-based Compensation
Share-based compensation expense before tax	$ 39	$ 220	$ 179

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STOCKHOLDERS' EQUITY, OPTIONS, WARRANTS AND RIGHTS

12 Months Ended

Jun. 30, 2013

STOCKHOLDERS' EQUITY, OPTIONS, WARRANTS AND RIGHTS

STOCKHOLDERS' EQUITY, OPTIONS, WARRANTS AND RIGHTS

10.   STOCKHOLDERS' EQUITY, OPTIONS, WARRANTS AND RIGHTS

Warrants

The Company previously issued 100,000 stock purchase warrants in connection with a prior acquisition. The strike price of the warrant was $24.69 with a term of seven years. During the year ended June 30, 2011, 125 stock purchase warrants were exercised and converted into 125 shares of the Company's common stock.

Share Repurchase Plan

The Company's Board of Directors have approved a variety of share repurchase plans under which, subject to price and market conditions, purchases of shares can be made from time to time in the open market or in privately negotiated transactions using available cash.

On April 6, 2011, the Company's Board of Directors increased the authorized capacity under the Company's existing share repurchase plan to $550 million minus the amount repurchased in the Company's modified Dutch auction tender offer to purchase up to $400 million in value of its common stock launched on April 8, 2011. Shareholders tendered 9.9 million shares of the Company's common stock at $40.18 per share for an aggregate cost of approximately $398.3 million.

On May 2, 2012 and October 24, 2012, the Company's Board of Directors approved a $150 million share-repurchase program, which replaced the existing repurchase program at the time of approval.

On April 24, 2013, the Company's Board of Directors approved a $300 million share repurchase program which replaced the existing repurchase program at the time of approval.

On April 24, 2013, the Company entered into an accelerated share repurchase agreement ("ASR Program") with JP Morgan Securities LLC ("JPMorgan") under which it paid JPMorgan $150 million and received an initial delivery of 2.3 million shares, which shares represented 85% of the ASR Program's value at price of $54.27 per share at the inception of the program. Shares representing the remaining 15% of the ASR Program's value will be delivered at maturity date of the program, with the final number of shares to be repurchased based on the volume-weighted average price of our common stock during the repurchase period, less an agreed upon discount and adjusted for the initial share delivery. Under the terms of the ASR Program, at settlement, we could either receive additional shares from the counterparty or be required to deliver additional shares or cash, at our option, to the counterparty. The total number of shares ultimately repurchased will not be known until the calculation period ends and a final settlement occurs. The agreement is subject to customary termination and adjustment provisions following the occurrence of specified events, including major corporate transactions such as announcements of mergers and acquisitions. The ASR Program will be completed during the first quarter of fiscal year 2014. As of June 30, 2013, $149.8 million is available for repurchases of shares of our common stock under the program.

The ASR Program was accounted for as two separate transactions: (i) as shares of common stock acquired in a share repurchase transaction and (ii) as a forward contract indexed to our own common stock. The initial delivery of shares resulted in an immediate reduction of the outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted net earnings per share from the effective date of the ASR Program. The Company has determined that the forward contract indexed to our common stock met all of the applicable criteria for equity classification. As such, the Company recorded the $150 million of shares repurchased as a purchase of treasury stock of $127.5 million and a forward contract included in additional-paid-in-capital of $22.5 million.

The following purchases have been made under the Company's share repurchase plans:

	Shares		Average price per share		Amount (in 000s)
Year Ended June 30,
2011		11,957,208	$	39.65		474,054
2012		3,860,778	$	40.06		154,645
2013		5,197,431	$	53.90		280,148
Total		21,015,417	$	43.25	$	908,847

Special Stock

The Company's Articles of Incorporation authorize the issuance of up to 10,000,000 shares of special stock ("Special Stock"). The Special Stock may be issued from time to time in one or more series, each having such designations, preferences and relative, participating, optional or other special rights, qualifications, limitations or restrictions as shall be stated and expressed in the resolution providing for the issuance of Special Stock or any series thereof adopted by the Board of Directors. Special Stock consists of non-voting stock where no holder of the Special Stock shall be entitled to vote at any meeting of stockholders or otherwise, except as may be specifically provided by law or as approved by the Board of Directors in certain limited circumstances at the time of the stock issuance.

To date, there have been four series of Special Stock authorized for issuance: the Initial Series, the Series B, the Series E and the Series F. In June 1996, the Company issued shares of Series E Special Stock to certain holders of the Company's 7¹/2% Convertible Subordinated Debentures (which were retired in 1996) who elected to receive such stock in lieu of receiving common stock. The holders of shares of Series E Special Stock have no voting rights except as required by law. A total of 115 shares of Series E Special Stock remained outstanding as of June 30, 2012. These shares were purchased and retired as of June 30, 2013. No other shares of Special Stock remain outstanding.

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PROPERTY, PLANT AND EQUIPMENT AND LEASED GAMING EQUIPMENT (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Jun. 30, 2012
Property, plant and equipment and leased gaming equipment
Less accumulated depreciation	$ (60,556)	$ (58,823)
Property, plant and equipment, net	35,097	30,667
Leased gaming equipment	323,431	306,997
Less accumulated depreciation	(209,680)	(185,846)
Leased gaming equipment, net	113,751	121,151
Land and land improvements
Property, plant and equipment and leased gaming equipment
Property, plant and equipment	1,975	1,975
Buildings and leasehold improvements
Property, plant and equipment and leased gaming equipment
Property, plant and equipment	29,582	25,908
Gaming equipment
Property, plant and equipment and leased gaming equipment
Property, plant and equipment	30,552	29,293
Furniture, fixtures and equipment
Property, plant and equipment and leased gaming equipment
Property, plant and equipment	$ 33,544	$ 32,314

XML

SHARE-BASED COMPENSATION (Details 4) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2011
Stock options
Share-Based Compensation
Unrecognized compensation cost	$ 3.5
Unrecognized compensation cost, period for recognition	1 year 5 months 5 days
Assumptions for determining the fair value of each option granted during the period
Expected option term	4 years 2 months 1 day	4 years 4 months 10 days	4 years 7 months 10 days
Expected volatility (as a percent)	48.30%	56.90%	54.91%
Risk-free interest rate (as a percent)	0.63%	0.89%	1.76%
Expected annual dividend yield (as a percent)	0.00%	0.00%	0.00%
Restricted stock, RSUs and PSUs
Share-Based Compensation
Unrecognized compensation cost	$ 20.5
Unrecognized compensation cost, period for recognition	1 year 8 months 16 days

XML

SEGMENT AND GEOGRAPHICAL INFORMATION (Tables)

12 Months Ended

Jun. 30, 2013

SEGMENT AND GEOGRAPHICAL INFORMATION

Summary of revenues and gross margin by segment based on information from the entity's internal management system

	Year Ended June 30,
	2013		2012		2011
	(in 000s)
Revenues:
Gaming Equipment and Systems
Gaming Equipment	$	339,842	$	310,651	$	246,514
Gaming Operations		404,978		357,417		318,621
Systems		252,219		211,691		193,020
Total revenues	$	997,039	$	879,759	$	758,155
Gross Margin(1):
Gaming Equipment and Systems
Gaming Equipment	$	170,629	$	139,845	$	112,096
Gaming Operations		282,790		257,737		229,801
Systems		192,627		155,861		142,602
Total gross margin	$	646,046	$	553,443	$	484,499

(1)

Gross Margin from Gaming Equipment and Systems excludes amortization related to certain intangibles including core technology and license rights, which are included in depreciation and amortization.

Schedule of revenues, operating income and identifiable assets by geographic region

	Year Ended June 30,
	2013		2012		2011
	(in 000s)
Revenues:
United States and Canada	$	826,975	$	716,075	$	619,219
International		170,064		163,684		138,936
Total revenues	$	997,039	$	879,759	$	758,155
Operating income:
United States and Canada	$	214,527	$	159,324	$	135,096
International		20,983		20,119		16,439
Total operating income	$	235,510	$	179,443	$	151,535
Identifiable assets:
United States and Canada	$	742,900	$	730,758	$	692,778
International		236,365		239,709		234,616
Total identifiable assets	$	979,265	$	970,467	$	927,394

XML

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Jun. 30, 2013

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of fair value of derivative financial instruments

	Fair Value Measurements Using Input Type
	Level 1		Level 2		Level 3
	(in 000s)
As of June 30, 2013:
Other current assets:
Foreign currency derivative financial instrument	$	—	$	397	$	—
Liabilities:
Accrued and other liabilities:
Foreign currency derivative financial instrument	$	—	$	22	$	—
Interest rate derivative financial instruments	$	—	$	4,689	$	—
Other liabilities:
Interest rate derivative financial instrument	$	—	$	4,927	$	—

	Fair Value Measurements Using Input Type
	Level 1		Level 2		Level 3
	(in 000s)
As of June 30, 2012:
Other current assets:
Foreign currency derivative financial instrument	$	—	$	2,850	$	—
Liabilities:
Accrued and other liabilities:
Foreign currency derivative financial instrument	$	—	$	115	$	—
Interest rate derivative financial instruments	$	—	$	4,804	$	—
Other liabilities:
Interest rate derivative financial instrument	$	—	$	9,028	$	—

Schedule of impact of the cash flow hedge and non-designated foreign currency derivatives on the unaudited condensed consolidated financial statements

	Amount of Loss Recognized in OCI on Derivative (Effective Portion)										Amount of Loss Reclassified From Accumulated OCI into Income (Effective Portion)
Cash Flow Hedging Derivative	Year Ended June 30, 2013			Year Ended June 30, 2012			Year Ended June 30, 2011			Location of Loss	Year Ended June 30, 2013			Year Ended June 30, 2012			Year Ended June 30, 2011
	(in 000s)										(in 000s)
Interest rate swap agreement	$	(921	)	$	(14,969	)	$	(3,661	)	Interest expense	$	(5,137	)	$	(5,039	)	$	(2,458	)

	Amount of Loss Recognized in Income on Derivative (Ineffective Portion)
Location of Loss	Year Ended June 30, 2013			Year Ended June 30, 2012		Year Ended June 30, 2011
	(in 000s)
Interest expense	$	(9	)	$	—	$	—

	Amount of Income (Loss) Recognized in Other Income (Expense)
Non-Designated Derivative	Year Ended June 30, 2013			Year Ended June 30, 2012		Year Ended June 30, 2011
	(in 000s)
Foreign Currency Forward Contract	$	(1,151	)	$	4,246	$	(135	)

Schedule of inventory

	June 30,
	2013		2012
	(in 000s)
Raw materials	$	42,464	$	50,498
Work-in-process		1,508		1,713
Finished goods		24,435		22,855
Total	$	68,407	$	75,066

XML

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Jun. 30, 2013

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of presentation and consolidation

Principles of presentation and consolidation

The accompanying consolidated financial statements include the accounts of Bally Technologies, Inc., and its wholly owned and partially owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and, pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"), include all adjustments necessary to fairly present the Company's consolidated financial position, results of operations and cash flows for each period presented. References to specific U.S. GAAP within this report cite topics within the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC").

All intercompany accounts and transactions have been eliminated in consolidation.

Use of estimates

Use of estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Discontinued Operations

Discontinued Operations

The Company was the general partner of Rainbow Casino Vicksburg Partnership ("RCVP"), which operated the Rainbow Casino, a dockside riverboat casino in Vicksburg, Mississippi. On April 5, 2010, the Company entered into a definitive purchase agreement to sell the Rainbow Casino which closed on June 8, 2010. Per the terms of the sale agreement, the Company had certain post-closing adjustments during fiscal year 2011, which reduced its gain on the sale of the Rainbow Casino in fiscal year 2010 by approximately $0.4 million, net of income taxes. The Company's Casino Operations have been classified as discontinued operations in the accompanying financial statements.

Fair value of financial instruments

Fair value of financial instruments

The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amounts reflected in the accompanying consolidated balance sheets for cash equivalents, accounts and notes receivable, investment securities to fund jackpot liabilities, accounts payable, jackpot liabilities and long-term debt approximate their respective fair values.

All financial assets and liabilities are recognized or disclosed at fair value using a fair value hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

There are three levels of inputs that may be used to measure fair value:

• •

  Level 1: quoted prices in active markets for identical assets or liabilities;

  •

  Level 2: inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or

  •

  Level 3: unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The carrying amounts reflected in the accompanying consolidated balance sheets for cash equivalents, accounts and notes receivable, investment securities to fund jackpot liabilities, accounts payable, jackpot liabilities and long-term debt approximate their respective fair values. Cash equivalents and investment securities to fund jackpot liabilities have Level 1 inputs with values based on quoted market prices. Accounts and notes receivable and jackpot liabilities have Level 3 inputs and were valued using Discounted Cash Flows ("DCF") incorporating expected future payment timing and current borrowing rates. Long-term debt has Level 2 inputs and was valued using DCF incorporating expected future payment timing and current borrowing rates.

The Company transacts business in various foreign currencies and has international sales and expenses denominated in foreign currencies, subjecting the Company to foreign currency risk. The Company enters into foreign currency forward contracts, generally with maturities of twelve months or less, to hedge recognized foreign currency assets and liabilities to reduce the risk that earnings and cash flows will be adversely affected by changes in foreign currency exchange rates. The gains or losses resulting from changes in the fair value of these forward contracts, which are not designated as accounting hedges, are reported in other income (expense) in the consolidated statements of operations, and generally offset the gains and losses associated with the underlying foreign-currency-denominated balances, which are also reported in other income (expense). As of June 30, 2013 and 2012, euro forward contracts for a total of $33.0 million and $38.0 million, respectively, or the notional equivalent of €25.3 million and €30 million, were outstanding. In addition, as of June 30, 2013, a pound sterling forward contract for $2.3 million, or the equivalent of £1.5 million, was outstanding.

The Company also uses interest rate derivatives to manage the interest expense generated by variable rate debt. See Note 7 to consolidated financial statements, Long-Term Debt.

The Company's derivative financial instruments are measured at fair value on a recurring basis, and the balances were as follows:

	Fair Value Measurements Using Input Type
	Level 1		Level 2		Level 3
	(in 000s)
As of June 30, 2013:
Other current assets:
Foreign currency derivative financial instrument	$	—	$	397	$	—
Liabilities:
Accrued and other liabilities:
Foreign currency derivative financial instrument	$	—	$	22	$	—
Interest rate derivative financial instruments	$	—	$	4,689	$	—
Other liabilities:
Interest rate derivative financial instrument	$	—	$	4,927	$	—

	Fair Value Measurements Using Input Type
	Level 1		Level 2		Level 3
	(in 000s)
As of June 30, 2012:
Other current assets:
Foreign currency derivative financial instrument	$	—	$	2,850	$	—
Liabilities:
Accrued and other liabilities:
Foreign currency derivative financial instrument	$	—	$	115	$	—
Interest rate derivative financial instruments	$	—	$	4,804	$	—
Other liabilities:
Interest rate derivative financial instrument	$	—	$	9,028	$	—

The valuation techniques used to measure the fair value of the derivative financial instruments above in which the counterparties have high credit ratings, were derived from pricing models, such as discounted cash flow techniques, with all significant inputs derived from or corroborated by observable market data. The Company's discounted cash flow techniques use observable market inputs, such as LIBOR-based yield curves and foreign currency forward rates.

Accounting for Derivative Instruments and Hedging Activity

Accounting for Derivative Instruments and Hedging Activity

The Company assesses, both at the inception of each hedge and on an on-going basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of the hedged items resulting in hedge accounting treatment. The interest rate derivative instruments meet these requirements and are accounted for as a cash flow hedges.

The impact of the cash flow hedge and non-designated foreign currency derivatives on the consolidated financial statements is depicted below:

	Amount of Loss Recognized in OCI on Derivative (Effective Portion)										Amount of Loss Reclassified From Accumulated OCI into Income (Effective Portion)
Cash Flow Hedging Derivative	Year Ended June 30, 2013			Year Ended June 30, 2012			Year Ended June 30, 2011			Location of Loss	Year Ended June 30, 2013			Year Ended June 30, 2012			Year Ended June 30, 2011
	(in 000s)										(in 000s)
Interest rate swap agreement	$	(921	)	$	(14,969	)	$	(3,661	)	Interest expense	$	(5,137	)	$	(5,039	)	$	(2,458	)

	Amount of Loss Recognized in Income on Derivative (Ineffective Portion)
Location of Loss	Year Ended June 30, 2013			Year Ended June 30, 2012		Year Ended June 30, 2011
	(in 000s)
Interest expense	$	(9	)	$	—	$	—

	Amount of Income (Loss) Recognized in Other Income (Expense)
Non-Designated Derivative	Year Ended June 30, 2013			Year Ended June 30, 2012		Year Ended June 30, 2011
	(in 000s)
Foreign Currency Forward Contract	$	(1,151	)	$	4,246	$	(135	)

Cash and cash equivalents

Cash and cash equivalents

Cash and cash equivalents consist of highly liquid debt instruments purchased with an original maturity of three months or less at the date of purchase and are carried at cost, which approximates fair value.

Restricted cash

Restricted cash

The Company maintains jackpot funds totaling approximately $12.9 million and $13.6 million at June 30, 2013 and 2012, respectively, to ensure availability of funds to pay wide-area progressive jackpot awards.

Accounts and notes receivable and allowances for doubtful accounts

Accounts and notes receivable and allowances for doubtful accounts

Accounts and notes receivable are stated at face value less an allowance for doubtful accounts. The Company generally grants customers credit terms for periods of 30 to 120 days, but may also grant extended payment terms to some customers for periods generally up to three years, with interest generally at market rates.

The Company evaluates the credit quality of its accounts and notes receivable and establishes an allowance for doubtful accounts based on a combination of factors including, but not limited to, customer collection experience, economic conditions, and the customer's financial condition. In addition to specific account identification, which includes the review of any modifications of accounts and notes receivable, if applicable, the Company utilizes historic collection experience for the most recent twelve month period to establish an allowance for doubtful accounts. Receivables are written off only after the Company has exhausted all collection efforts.

Inventories

Inventories

Inventories are stated at the lower of cost, determined on a first in, first out basis, or market. Cost elements included in work-in-process and finished goods include raw materials, direct labor and manufacturing overhead. Inventories consist of the following:

	June 30,
	2013		2012
	(in 000s)
Raw materials	$	42,464	$	50,498
Work-in-process		1,508		1,713
Finished goods		24,435		22,855
Total	$	68,407	$	75,066

The Company regularly reviews inventory quantities and updates estimates for the net realizable value of inventories to estimate potential excess or obsolete inventory. Our process includes examining the carrying values of new and used gaming devices, parts and ancillary equipment in comparison to the current fair market values for such equipment (less costs to sell or dispose). The determination of obsolete or excess inventory requires us to estimate the future demand for our products within specific time horizons, generally one year or less. Additional factors involved in this analysis include the overall levels of our inventories, the costs required to sell the products, including refurbishment costs, importation costs for international shipments, and the overall projected demand for products after release of the next generation of products. Demand for parts inventory is also subject to technical obsolescence.

The Company recorded inventory write-downs totaling approximately $6.1 million, $5.9 million and $3.6 million during the years ended June 30, 2013, 2012 and 2011, respectively. Additional valuation charges could occur in the future as a result of changes in the factors listed above. These charges are included in the cost of gaming equipment and systems in the consolidated statements of operations.

Deferred revenue and deferred cost of revenue

Deferred revenue and deferred cost of revenue

Deferred revenue arises from the timing differences between the shipment or installation of gaming equipment and systems products and the satisfaction of all revenue recognition criteria consistent with the Company's revenue recognition policy. Deferred cost of revenue consists of the direct costs associated with the manufacture of gaming equipment and systems products for which revenue has been deferred. Deferred revenue and deferred cost of revenue that are expected to be realized within one year are classified as current liabilities and current assets, respectively.

Restricted long-term investments

Restricted long-term investments

The Company purchases U.S. Treasury Strip Securities for the benefit of jackpot winners who elect to receive annual or weekly installment payments. These securities are held to maturity and recorded at cost plus interest accretion to date. Such securities are included in restricted long-term investments in the consolidated balance sheets, and totaled $14.8 million and $12.2 million as of June 30, 2013 and 2012, respectively.

Property, plant and equipment and leased gaming equipment

Property, plant and equipment and leased gaming equipment

Property, plant and equipment is stated at cost and depreciated over the estimated useful lives or lease term, if less, using the straight line method as follows: buildings and improvements, ten years; furniture, fixtures and equipment, three to seven years; and leasehold improvements, the shorter of lease term or ten years. Leased gaming equipment is stated at cost and depreciated over the estimated useful lives ranging from one to three and one-half years. Depreciation and asset charges related to leased gaming equipment are recorded to cost of gaming operations in the consolidated statements of operations.

Significant replacements and improvements are capitalized while other maintenance and repairs are expensed. The cost and accumulated depreciation of assets retired or otherwise disposed of are eliminated from the accounts and any resulting gain or loss is credited or charged to income.

Depreciation and amortization expense

Depreciation and amortization expense

For the years ended June 30, 2013, 2012 and 2011, depreciation and amortization expense from continuing operations totaled $88.3 million, $81.5 million and $75.0 million, respectively. Of these amounts, $65.6 million, $58.7 million and $55.1 million of depreciation and amortization expense were included in cost of gaming equipment and systems and cost of gaming operations in the consolidated statements of operations.

Impairment of long-lived assets and goodwill

Impairment of long-lived assets and goodwill

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets are measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset, undiscounted and without interest. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets.

The Company reviews goodwill for impairment annually at the beginning of its fourth fiscal quarter, or whenever events or changes in circumstances indicate the carrying value may not be recoverable or warrant a revision to the estimated remaining useful life. The Company performs the impairment analysis of goodwill at a reporting unit level by comparing the fair value of a reporting unit with its carrying value, including goodwill. If the fair value is less than the carrying value, the impairment to be recognized is measured as the amount by which the carrying amount of the goodwill exceeds the fair value of the reporting unit goodwill.

During the years ended June 30, 2013, 2012 and 2011, no impairment charges related to long-lived assets or goodwill were recorded.

Jackpot liabilities

Jackpot liabilities

The Company recognizes jackpot expense, included in cost of gaming operations in the consolidated statements of operations, and a liability for jackpots incurred but not yet won in each jurisdiction based on the discounted net present value of the progressive meter liability. Jackpots are payable either in weekly or annual installments, or immediately in the case of instant win progressive jackpots. Winners may elect to receive a single payment for the present value of a jackpot discounted at applicable interest rates in lieu of annual installments. Interest rates used in the single payment calculation vary by jurisdiction and are impacted by market forces and other economic conditions.

Revenue recognition

Revenue recognition

The Company's revenue recognition policy is to record revenue when all of the following criteria have been satisfied:

• •

  Persuasive evidence of an arrangement exists;

  •

  The price or fee to the customer is fixed or determinable;

  •

  Collectability is reasonably assured;

  •

  Delivery has occurred; and

  •

  No significant contractual obligations remain.

Revenues are reported net of incentive rebates, discounts, sales taxes, and all other items of a similar nature except for gaming industry taxes on certain Gaming Operations revenue. The gross amounts of these gaming taxes are not presented separately in the financial statements because they are not significant. For products sold under arrangements with extended payment terms the probability of collection is evaluated based on a review of the customer's credit worthiness and a review of historic collection experience on contracts with extended payment terms. As a result of such review, the Company recognizes revenue on extended payment term arrangements as the Company has determined that collectability is reasonably assured and the fee is considered fixed and determinable.

Games placed with customers on a trial basis are recorded as revenue once the trial period has ended, the customer has accepted the games and all other revenue recognition criteria have been satisfied. Amounts billed to customers prior to completing the earnings process are deferred until the revenue recognition criteria are satisfied.

Gaming Operations Revenue.    Gaming operations revenue consists of the operation of linked progressive systems and the rental of gaming devices, game content and the related systems placed with customers. Fees under these arrangements are earned and recognized based on a share of money wagered, a share of the net winnings, or on a fixed daily rate. The daily fee entitles the customer to full use of the gaming device and includes maintenance, licensing of the game content software and connection to a linked progressive system, where applicable. In certain markets, the Company also charges a daily system connection fee for the customer to connect to a central determination system and/or back-office system. The Company does not consider these arrangements to have multiple revenue-generating activities as the services offered are a comprehensive solution in exchange for a daily fee and all of the products and services are delivered simultaneously. Gaming operations revenue is recognized under general revenue recognition guidance as the deliverables provide the customer with rights to use tangible gaming devices and software that is essential to the functionality of the gaming devices.

Gaming Equipment Revenue.    Gaming Equipment revenue is generated from the sale of gaming devices and licensing rights to game content software that is installed in the gaming device, parts, and other ancillary equipment. Arrangements may also include sales of game content conversion kits which enable customers to replace game content without purchasing a new gaming device. Gaming equipment arrangements do not include maintenance and product support fees beyond a standard warranty period. The recognition of revenue from the sale of gaming devices occurs as title and risk of loss have passed to the customer and all other revenue recognition criteria have been satisfied.

As the combination of game content software and the tangible gaming device function together to deliver the product's essential functionality, revenue from the sale of gaming devices is recognized under general revenue recognition guidance. Game content conversion kits are considered software deliverables and are recognized in accordance with software revenue recognition guidance.

Systems Revenue.    Systems revenue arrangements generally include a combination of systems software licenses, systems-based hardware products, maintenance and product support fees and professional services. The primary function of systems software licensed by the Company is to aid customers to more effectively run their business with marketing, data management and analysis, accounting, player tracking and security features.

Revenue for systems software and maintenance and product support fees is recognized under software revenue recognition guidance. Although the systems software and certain systems-based hardware function together, the primary functionality of the systems software is derived from the software and the systems software is not essential to the functionality of the systems-based hardware.

The Company licenses systems software on a perpetual basis or under time-based licenses. Revenue from perpetual license software is recognized at the inception of the license term provided all revenue recognition criteria have been satisfied. Revenue from maintenance and product support fees sold with perpetual licenses is recognized over the term of the support period. The Company's time-based licenses are generally for twelve month terms and are bundled with software maintenance and product support fees. All revenue from such arrangements is recognized over the term of the license.

Systems-based hardware includes embedded software that is essential to the functionality of the hardware. Accordingly, revenue related to all systems-based hardware sales and related maintenance and product support fees are recognized under general revenue recognition guidance. Revenue from the sale of systems-based hardware is generally recognized upon delivery when title and risk of loss have passed to the customer and all other revenue recognition criteria are satisfied. However, in the case of arrangements involving a systems installation, revenue on the systems-based hardware is generally not recognized until the system has been installed and the customer has accepted the system. Hardware maintenance and product support fees are recognized on a straight-line basis over the term of the support period which is generally twelve months.

Software maintenance and product support provides customers with rights to unspecified software product upgrades, maintenance and patches released during the term of the support period. The Company's software maintenance and product support arrangements are generally for twelve month periods. Software maintenance and product support is recognized on a straight-line basis over the term of the support period.

Multiple Element Arrangements.    The Company enters into revenue arrangements that may consist of multiple deliverables of its products and services. For example, customers may enter into arrangements with the Company for the implementation of systems software and the sale of gaming devices. Arrangements for the implementation of systems software will generally include a combination of systems software licenses, systems-based hardware products, maintenance and product support fees, and professional services. Certain gaming equipment arrangements may also include the sale of gaming devices and game content conversion kits.

Revenue arrangements with multiple deliverables are allocated to separate units of accounting if the deliverables meet both of the following criteria:

• •

  The delivered items have value to the customer on a stand-alone basis. The items have value on a standalone basis if they are sold separately by any vendor or the customer could resell the delivered items on a standalone basis; and

  •

  If the arrangement includes a general right of return relative to the delivered items, delivery or performance of the undelivered items is considered probable and substantially in the control of the Company.

At the inception of a multiple element arrangement, fees under the arrangement are allocated to the nonsoftware deliverables, and to the software deliverables as a group based on their relative selling price. Software deliverables are further subject to separation and allocation based on software revenue recognition guidance as described in the following paragraph. When applying the relative selling price method, a hierarchy is used for estimating the selling price based first on vendor-specific objective evidence ("VSOE"), then third-party evidence ("TPE") and finally management's estimate of the selling price ("ESP"). Revenue for each unit of accounting is recognized when the relevant recognition criteria for each respective element has been met.

In allocating arrangement fees under the relative selling price hierarchy, the Company uses VSOE for all products which have been sold on a stand-alone basis or the stated renewal rate for maintenance and product support fees. As TPE is generally not available, the Company uses ESP for products that are not sold on a stand-alone basis and for recently introduced products that are sold on a stand-alone basis but for which a history of stand-alone sales has not yet been developed. Following these guidelines, the Company uses either VSOE or ESP for gaming devices, system-based hardware products, maintenance and product support fees associated with perpetual licenses and professional services; and ESP for perpetual and time-based software licenses and maintenance and product support fees associated with time-based licenses.

The Company uses the residual method to recognize revenue allocated to software deliverables. Under the residual method, the fair value of the undelivered elements is deferred and the remaining portion of the arrangement fee is allocated to the delivered element and is recognized as revenue. In arrangements in which the Company does not have VSOE of fair value of all undelivered software elements, revenue is deferred until delivery occurs or VSOE of fair value has been established for any remaining undelivered software elements. In the event the only undelivered software element is maintenance and product support for which VSOE of fair value does not exist, the revenue is recognized ratably over the maintenance and product support period.

The establishment of VSOE requires judgment as to whether there is a sufficient quantity of items sold on a stand-alone basis and whether the prices demonstrate an appropriate level of concentration to conclude that VSOE exists. In determining ESP, management considers a variety of information including historic pricing and discounting practices, competitive market activity, internal costs, and the pricing and discounting practices of products sold in bundled arrangements.

Advertising costs

Advertising costs

The Company expenses advertising costs as incurred, which totaled $10.0 million, $9.3 million and $9.6 million from continuing operations for the years ended June 30, 2013, 2012 and 2011, respectively.

Warranty and product indemnifications

Warranty and product indemnifications

Gaming devices are typically sold with a 90-day parts and labor warranty and certain sales agreements include third-party indemnifications for intellectual property infringement. Warranty expense is calculated using historical experience, and totaled $3.6 million, $4.1 million and $2.5 million for the years ended June 30, 2013, 2012 and 2011, respectively, and no costs have been incurred or accrued related to indemnities.

Research and development

Research and development

Research and development expenses related to product development are expensed until technological feasibility has been established. The Company has determined that technological feasibility is not established for its products until completion of the regulatory approval process. As this process is completed shortly before the products are made available to customers, any development costs incurred after the establishment of technological feasibility are typically not significant and expensed as incurred.

Income taxes

Income taxes

The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. Taxes on income of the Company's foreign subsidiaries are provided at the tax rates applicable to the tax jurisdictions in which they are located.

The Company recognizes tax benefits from an uncertain position only if it is more likely than not that the position will be sustained upon examination by taxing authorities based on the technical merits of the issue. The amount recognized is the largest benefit that the Company believes has greater than a 50% likelihood of being realized upon settlement. The Company recognizes interest and penalties related to uncertain tax positions as tax expense.

Share-based compensation

Share-based compensation

The Company accounts for share-based compensation based on the calculated fair value of the award measured on the grant date, which is recognized, net of estimated forfeitures, as an expense over the employee's requisite service period. The Company classifies share-based compensation expense in the same financial statement line as cash compensation, including cost of gaming equipment and systems and casino operations, research and development costs, and selling, general and administrative expenses.

The excess tax benefit from stock option exercises and tax deductions in excess of compensation cost recognized are classified as a financing activity in the statement of cash flows.

Foreign currency translation

Foreign currency translation

The functional currency of the Company's foreign subsidiaries is typically their local currency. Assets and liabilities of foreign operations are translated into U.S. dollars at the rate of exchange at the end of the period, and the income and expense accounts are translated at the average rate of exchange for the period. Translation adjustments are reflected as accumulated other comprehensive income within stockholders' equity. Gains and losses on foreign currency transactions are included in the consolidated statements of operations.

Recently adopted accounting pronouncements

Recently adopted accounting pronouncements

On July 1, 2011, the Company adopted new accounting guidance related to troubled debt restructuring. The guidance clarifies which loan modifications constitute troubled debt restructurings to assist creditors in determining whether a modification of the terms of a receivable meets the criteria to be considered a troubled debt restructuring, both for purposes of recording an impairment loss and for disclosures of troubled debt restructurings.

On July 1, 2011, the Company adopted new accounting guidance related to accruals for casino jackpot liabilities. Specifically, the guidance clarifies that an entity should not accrue jackpot liabilities, or portions thereof, before a jackpot is won if the entity can avoid paying the jackpot. Jackpots should be accrued and charged to revenue when an entity has the obligation to pay the jackpot. The guidance applies to both base and progressive jackpots. The new guidance was applied by recording a cumulative-effect adjustment to opening retained earnings of $2.4 million on July 1, 2011.

On December 31, 2011, the Company chose to early adopt new accounting guidance to make the presentation of items within other comprehensive income ("OCI") more prominent. The new standard requires companies to present items of net income, items of OCI and total comprehensive income in one continuous statement or two separate consecutive statements, and companies are no longer allowed to present items of OCI only in the statement of stockholders' equity. The Company chose to present the items in two separate consecutive statements. The new guidance was applied retrospectively.

Effective December 31, 2011, new accounting guidance for testing goodwill impairment permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The Company has not utilized this method in its evaluation of goodwill impairment.

Effective September 30, 2012, new accounting guidance for testing indefinite-lived intangible assets permits an entity to first access qualitative factors to determine whether the existence of events and circumstances indicate that it is more likely than not that the indefinite-lived intangible asset is impaired. The outcome of the assessment is used as a basis for determining whether it is necessary to determine the fair value of the indefinite-lived intangible asset and perform the quantitative impairment test by comparing the fair value with the carrying amount in accordance with ASC Topic 350. The Company has not yet utilized this method in its evaluation of indefinite-lived intangible assets impairment.

Recently issued accounting pronouncements not yet adopted

Recently issued accounting pronouncements not yet adopted

In December 2011, the FASB issued new accounting guidance for disclosures about offsetting assets and liabilities which requires an entity to disclose information about financial instruments that have been offset and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. Entities will be required to provide both net (offset amounts) and gross information in the notes to the financial statements for relevant assets and liabilities that are offset. The new guidance is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The Company expects to adopt this guidance in fiscal year 2014 and does not believe it will have a significant impact on its consolidated results of operations, financial condition and cash flows.

In February 2013, the FASB issued new accounting guidance to improve the reporting of reclassifications out of accumulated other comprehensive income ("AOCI"). Under the guidance, an entity is required to provide information about the amounts reclassified out of AOCI by component. In addition, an entity is required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income, but only if the amount reclassified is required to be reclassified in its entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about those amounts. The guidance did not change the requirements for reporting net income or other comprehensive income in the financial statements. The new guidance is effective for annual reporting periods beginning on or after December 15, 2012, and interim periods within those annual periods. The Company expects to adopt this guidance in fiscal year 2014 and does not believe it will have a significant impact on its consolidated results of operations, financial condition and cash flows.

In February 2013, the FASB issued new accounting guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation is fixed at the reporting date, including debt arrangements, other contractual obligations, and settled litigation and judicial rulings. The new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2013. The Company expects to adopt this guidance in fiscal year 2015 and does not believe it will have a significant impact on its consolidated results of operations, financial condition and cash flows.

The Company believes there is no additional new accounting guidance adopted but not yet effective that is relevant to the readers of our financial statements. However, there are numerous new proposals under development which, if and when enacted, may have a significant impact on its financial reporting.

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EARNINGS PER SHARE (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2011
Amounts attributable to Bally Technologies, Inc.:
Income from continuing operations, net of tax									$ 141,444	$ 101,148	$ 98,666
Loss on sale of discontinued operations, net of tax											(403)
Diluted earnings attributable to Bally Technologies, Inc.									$ 141,444	$ 101,148	$ 98,263
Weighted average common shares outstanding									40,120	42,985	51,960
Dilutive effect of:
Stock options, Restricted Stock Units ("RSU") and restricted stock (in shares)									872	1,435	2,459
Warrants (in shares)											1
Weighted average diluted shares outstanding (in shares)									40,992	44,420	54,420
Basic earnings per share attributable to Bally Technologies, Inc.:
Income from continuing operations (in dollars per share)									$ 3.53	$ 2.35	$ 1.90
Loss on sale of discontinued operations (in dollars per share)											$ (0.01)
Basic earnings per share (in dollars per share)	$ 0.96	$ 0.95	$ 0.82	$ 0.80	$ 0.63	$ 0.70	$ 0.57	$ 0.47	$ 3.53	$ 2.35	$ 1.89
Diluted earnings per share attributable to Bally Technologies, Inc.:
Income from continuing operations (in dollars per share)									$ 3.45	$ 2.28	$ 1.82
Loss on sale of discontinued operations (in dollars per share)											$ (0.01)
Diluted earnings per share (in dollars per share)	$ 0.95	$ 0.93	$ 0.80	$ 0.77	$ 0.61	$ 0.67	$ 0.54	$ 0.45	$ 3.45	$ 2.28	$ 1.81
Stock options, RSU and restricted stock having anti-dilutive effect in calculation of diluted earnings per share (in shares)									70	574	688

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LEASES (Tables)

12 Months Ended

Jun. 30, 2013

LEASES

Schedule of operating rental and auto lease expense

	Year Ended June 30,
	2013		2012			2011
	(in 000s)
Equipment, auto and office space leases	$	11,220	$	9,273		$	9,060
Sublease rental income		—		(317	)		(357	)
	$	11,220	$	8,956		$	8,703

Schedule of future minimum rental payments required under noncancelable operating leases

Year Ended June 30,	Operating
2014	$	8,872
2015		6,594
2016		5,152
2017		3,059
2018		1,192
Thereafter		521
Total minimum payments	$	25,390

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DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (Rainbow Casino, USD $) In Millions, unless otherwise specified	12 Months Ended
	Jun. 30, 2011
Rainbow Casino
Discontinued Operation
Post-closing adjustments to reduce gain on sale of discontinued operations, net of income taxes	$ 0.4

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GOODWILL AND INTANGIBLE ASSETS (Details) (USD $)	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2011
Intangible assets
Gross Carrying Amount of finite-lived intangible assets	$ 95,287,000	$ 99,636,000
Accumulated Amortization of finite-lived intangible assets	(77,711,000)	(67,970,000)
Total	17,576,000	31,666,000
Gross Carrying Amount of total intangible assets	102,787,000	107,136,000
Net Carrying Amount of total intangible assets	25,076,000	39,166,000
Amortization expense of finite-lived intangible assets	10,900,000	9,800,000	9,300,000
Future amortization of finite-lived intangible assets
2014	8,283,000
2015	4,495,000
2016	2,648,000
2017	858,000
2018	248,000
Thereafter	1,044,000
Total	17,576,000	31,666,000
Changes in the carrying amount of goodwill
Balance at the beginning of the period	171,971,000	162,110,000
Additions		10,656,000
Foreign currency translation adjustment	191,000	(795,000)
Balance at the end of the period	172,162,000	171,971,000	162,110,000
MacroView Labs
Intangible assets
Business acquisition, total purchase price		8,800,000
Chiligaming LTD
Intangible assets
Business acquisition, total purchase price		7,100,000
Trademarks
Intangible assets
Indefinite-lived intangible assets, carrying amount	7,500,000	7,500,000
Computer software
Intangible assets
Gross Carrying Amount of finite-lived intangible assets	39,484,000	39,633,000
Accumulated Amortization of finite-lived intangible assets	(35,796,000)	(34,442,000)
Total	3,688,000	5,191,000
Amortization expense of finite-lived intangible assets	2,100,000	2,300,000	3,300,000
Future amortization of finite-lived intangible assets
Total	3,688,000	5,191,000
Computer software | Minimum
Intangible assets
Useful Life	3 years
Computer software | Maximum
Intangible assets
Useful Life	5 years
License rights
Intangible assets
Gross Carrying Amount of finite-lived intangible assets	12,819,000	8,440,000
Accumulated Amortization of finite-lived intangible assets	(7,215,000)	(4,251,000)
Total	5,604,000	4,189,000
Future amortization of finite-lived intangible assets
Total	5,604,000	4,189,000
License rights | Minimum
Intangible assets
Useful Life	3 years
License rights | Maximum
Intangible assets
Useful Life	13 years
Trademarks
Intangible assets
Gross Carrying Amount of finite-lived intangible assets	2,430,000	2,430,000
Accumulated Amortization of finite-lived intangible assets	(2,239,000)	(2,216,000)
Total	191,000	214,000
Future amortization of finite-lived intangible assets
Total	191,000	214,000
Trademarks | Minimum
Intangible assets
Useful Life	5 years
Trademarks | Maximum
Intangible assets
Useful Life	10 years
Core technology
Intangible assets
Gross Carrying Amount of finite-lived intangible assets	27,063,000	27,063,000
Accumulated Amortization of finite-lived intangible assets	(21,887,000)	(17,935,000)
Total	5,176,000	9,128,000
Business acquisition, purchase price of finite-lived intangible assets		4,300,000
Future amortization of finite-lived intangible assets
Total	5,176,000	9,128,000
Core technology | Minimum
Intangible assets
Useful Life	5 years
Core technology | Maximum
Intangible assets
Useful Life	14 years
Contract rights
Intangible assets
Gross Carrying Amount of finite-lived intangible assets	10,943,000	15,496,000
Accumulated Amortization of finite-lived intangible assets	(9,766,000)	(8,522,000)
Total	1,177,000	6,974,000
Derecognized contract rights associated with HBG	4,600,000
Business acquisition, purchase price of finite-lived intangible assets		900,000
Future amortization of finite-lived intangible assets
Total	1,177,000	6,974,000
Contract rights | Minimum
Intangible assets
Useful Life	2 years
Contract rights | Maximum
Intangible assets
Useful Life	10 years
Other intangibles
Intangible assets
Gross Carrying Amount of finite-lived intangible assets	2,548,000	6,574,000
Accumulated Amortization of finite-lived intangible assets	(808,000)	(604,000)
Total	1,740,000	5,970,000
Future amortization of finite-lived intangible assets
Total	$ 1,740,000	$ 5,970,000
Other intangibles | Minimum
Intangible assets
Useful Life	3 years
Other intangibles | Maximum
Intangible assets
Useful Life	5 years

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GOODWILL AND INTANGIBLE ASSETS (Tables)

12 Months Ended

Jun. 30, 2013

GOODWILL AND INTANGIBLE ASSETS

Schedule of intangible assets

		June 30, 2013							June 30, 2012
	Useful Life (Years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	(dollars in 000s)
Computer software	3 - 5	$	39,484	$	(35,796	)	$	3,688	$	39,633	$	(34,442	)	$	5,191
License rights	3 - 13		12,819		(7,215	)		5,604		8,440		(4,251	)		4,189
Trademarks	5 - 10		2,430		(2,239	)		191		2,430		(2,216	)		214
Core technology	5 - 14		27,063		(21,887	)		5,176		27,063		(17,935	)		9,128
Contract rights	2 - 10		10,943		(9,766	)		1,177		15,496		(8,522	)		6,974
Other intangibles	3 - 5		2,548		(808	)		1,740		6,574		(604	)		5,970
Total finite-lived intangible assets		$	95,287	$	(77,711	)	$	17,576	$	99,636	$	(67,970	)	$	31,666
Trademark	indefinite		7,500		—			7,500		7,500		—			7,500
Total		$	102,787	$	(77,711	)	$	25,076	$	107,136	$	(67,970	)	$	39,166

Schedule of future amortization of finite-lived intangible assets

Year Ended June 30,	(in 000s)
2014	$	8,283
2015		4,495
2016		2,648
2017		858
2018		248
Thereafter		1,044
Total	$	17,576

Schedule of changes in the carrying amount of goodwill

	(in 000s)
Balance as of June 30, 2011	$	162,110
Additions		10,656
Foreign currency translation adjustment		(795	)
Balance as of June 30, 2012		171,971
Foreign currency translation adjustment		191
Balance as of June 30, 2013	$	172,162

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SEGMENT AND GEOGRAPHICAL INFORMATION (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2011
Revenues, operating income and identifiable assets by geographic region
Revenues	$ 264,402	$ 259,147	$ 238,339	$ 235,151	$ 245,795	$ 228,540	$ 210,457	$ 194,967	$ 997,039	$ 879,759	$ 758,155
Operating income									235,510	179,443	151,535
Identifiable assets	979,265				970,467				979,265	970,467	927,394
United States and Canada
Revenues, operating income and identifiable assets by geographic region
Revenues									826,975	716,075	619,219
Operating income									214,527	159,324	135,096
Identifiable assets	742,900				730,758				742,900	730,758	692,778
International
Revenues, operating income and identifiable assets by geographic region
Revenues									170,064	163,684	138,936
Operating income									20,983	20,119	16,439
Identifiable assets	$ 236,365				$ 239,709				$ 236,365	$ 239,709	$ 234,616

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SEGMENT AND GEOGRAPHICAL INFORMATION (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2013 item	Jun. 30, 2012	Jun. 30, 2011
SEGMENT AND GEOGRAPHICAL INFORMATION
Number of operating industry segments									1
Revenue and gross margin by segment
Revenues	$ 264,402	$ 259,147	$ 238,339	$ 235,151	$ 245,795	$ 228,540	$ 210,457	$ 194,967	$ 997,039	$ 879,759	$ 758,155
Gross margin									646,046	553,443	484,499
Gaming Equipment
Revenue and gross margin by segment
Revenues									339,842	310,651	246,514
Gross margin									170,629	139,845	112,096
Gaming Operations
Revenue and gross margin by segment
Revenues									404,978	357,417	318,621
Gross margin									282,790	257,737	229,801
Systems
Revenue and gross margin by segment
Revenues									252,219	211,691	193,020
Gross margin									$ 192,627	$ 155,861	$ 142,602

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DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 4) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2011
Inventories
Raw materials	$ 42,464	$ 50,498
Work-in-process	1,508	1,713
Finished goods	24,435	22,855
Total	68,407	75,066
Period of estimate of excess and obsolete inventory which requires estimating the future demand for production	1 year
Inventory write-downs	6,130	5,902	3,623
Restricted long-term investments
Restricted long-term investments	$ 14,786	$ 12,171
Minimum
Accounts and notes receivable and allowances for doubtful accounts
Credit term	30 days
Maximum
Accounts and notes receivable and allowances for doubtful accounts
Credit term	120 days
Extended credit term, maximum	3 years

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SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS

12 Months Ended

Jun. 30, 2013

SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS

SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS

Years ended June 30, 2013, 2012 and 2011

	Balance at Beginning of Year		Additions		Net Write-offs/ (Recoveries)		Balance at End of Year
	(in 000s)
Allowance for doubtful accounts (current and long-term):
Year Ended June 30, 2013(1)	$	17,102	$	11,173	$	11,698	$	16,577
Year Ended June 30, 2012	$	11,566	$	9,863	$	4,327	$	17,102
Year Ended June 30, 2011(1)	$	15,143	$	7,963	$	11,540	$	11,566

(1)

Net Write-offs in fiscal year 2013 and 2011 include $2.9 million and $5.5 million, respectively, related to development financing.

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CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) In Thousands, unless otherwise specified	Total	Common Stock	Series E Special Stock	Treasury Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss) ("OCI")	Retained Earnings	Noncontrolling Interests
Balances at Jun. 30, 2010	$ 544,192	$ 5,943	$ 12	$ (157,053)	$ 392,853	$ (3,044)	$ 303,100	$ 2,381
Balances (in shares) at Jun. 30, 2010		59,495
Increase (Decrease) in Stockholders' Equity
Income from continuing operations, net of tax	98,211						98,666	(455)
Loss on sale of discontinued operations, net of tax	(403)						(403)
Foreign currency translation adjustment	762					762
Unrealized gain (loss) on derivative financial instruments, net of tax	(782)					(782)
Total comprehensive income	97,788
Distributions to noncontrolling interests	(239)							(239)
Issuance and receipt of restricted stock, ESPP shares, stock options and related tax and tax benefit	33,998	206		(3,161)	36,953
Issuance and receipt of restricted stock, ESPP shares, stock options and related tax and tax benefit (in shares)		2,046
Purchase of common stock for treasury	(474,054)			(474,054)
Share-based compensation	12,907				12,907
Balances at Jun. 30, 2011	214,592	6,149	12	(634,268)	442,713	(3,064)	401,363	1,687
Balances (in shares) at Jun. 30, 2011		61,541
Increase (Decrease) in Stockholders' Equity
Income from continuing operations, net of tax	100,910						101,148	(238)
Foreign currency translation adjustment	(3,959)					(3,959)
Unrealized gain (loss) on derivative financial instruments, net of tax	(6,454)					(6,454)
Total comprehensive income	90,497
Distributions to noncontrolling interests	(82)							(82)
Cumulative effect of adoption of ASU 2010-16 for change in jackpot accounting (ASU 2010-16)	2,384						2,384
Issuance and receipt of restricted stock, ESPP shares, stock options and related tax and tax benefit	30,557	160		(1,720)	32,117
Issuance and receipt of restricted stock, ESPP shares, stock options and related tax and tax benefit (in shares)		1,609
Purchase of common stock for treasury	(154,645)			(154,645)
Share-based compensation	14,172				14,172
Balances at Jun. 30, 2012	197,475	6,309	12	(790,633)	489,002	(13,477)	504,895	1,367
Balances (in shares) at Jun. 30, 2012		63,150
Increase (Decrease) in Stockholders' Equity
Income from continuing operations, net of tax	139,701						141,444	(1,743)
Foreign currency translation adjustment	45					45
Unrealized gain (loss) on derivative financial instruments, net of tax	2,740					2,740
Total comprehensive income	142,486
Purchase of Series E special stock	(12)		(12)
Issuance and receipt of restricted stock, ESPP shares, stock options and related tax and tax benefit	45,992	214		(10,099)	55,877
Issuance and receipt of restricted stock, ESPP shares, stock options and related tax and tax benefit (in shares)		2,168
Accelerated share repurchase forward contract				22,500	(22,500)
Purchase of common stock for treasury	(280,149)			(280,149)
Share-based compensation	13,380				13,380
Balances at Jun. 30, 2013	$ 119,172	$ 6,523		$ (1,058,381)	$ 535,759	$ (10,692)	$ 646,339	$ (376)
Balances (in shares) at Jun. 30, 2013		65,318

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CONSOLIDATED SUPPLEMENTAL CASH FLOW INFORMATION (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Jun. 30, 2013		Jun. 30, 2012		Jun. 30, 2011
The following supplemental information is related to the consolidated statements of cash flows:
Cash paid for interest	$ 16,124		$ 17,119		$ 11,985
Cash paid for income taxes	63,693		29,297		46,132
Non-cash investing and financing transactions:
Transfer of inventory to leased gaming equipment	74,840	[1]	104,512	[1]	87,307	[1]
Reclassify property, plant and equipment to inventory	17,112	[1]	16,685	[1]	15,519	[1]
Liabilities assumed in acquisitions			$ 5,395

[1] As a result of the inability to separately identify the cash flows associated with the construction of leased gaming equipment, the Company has included all additions to leased gaming equipment as an increase in inventory under cash used in operating activities in the consolidated statement of cash flows. In addition, cash generated from the sale of used gaming equipment classified as leased gaming equipment is also included in cash provided by operating activities in the consolidated statement of cash flows. The Company has one process to procure raw materials for the assembly of both inventory and leased gaming equipment. The materials requisition planning process considers the number of devices the Company expects to build for sale and for use in gaming operations during a particular period, but it does not separately earmark purchases for leased gaming equipment. Without such an earmarking process, the Company is unable to determine whether the parts used to construct leased gaming equipment during a particular period came from inventory on hand at the beginning of the period or was constructed from inventory procured during the period of deployment, thus requiring the expenditure of cash.

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ACCOUNTS AND NOTES RECEIVABLE AND ALLOWANCES FOR DOUBTFUL ACCOUNTS

12 Months Ended

Jun. 30, 2013

ACCOUNTS AND NOTES RECEIVABLE AND ALLOWANCES FOR DOUBTFUL ACCOUNTS

ACCOUNTS AND NOTES RECEIVABLE AND ALLOWANCES FOR DOUBTFUL ACCOUNTS

3.     ACCOUNTS AND NOTES RECEIVABLE AND ALLOWANCES FOR DOUBTFUL ACCOUNTS

The Company has one portfolio segment, the gaming industry customer, and four classes of receivables including its trade receivables with a contract term less than one year, trade receivables with a contract term greater than one year, sales-type leasing arrangements, and notes receivable, which are related to development financing loans. Trade receivables with contract terms greater than one year relate to the sale of gaming equipment and systems transactions, and are generally collateralized by the related equipment sold, although the value of such equipment, if repossessed, may be less than the receivable balance outstanding. Sales-type leasing arrangements relate to gaming equipment and include options to purchase the equipment at the end of the lease term at established prices. Customers with sales-type leasing arrangements typically have a long-standing credit history with the Company.

The Company's accounts and notes receivable were as follows:

	Accounts and Notes Receivable as of June 30, 2013
							Accounts and Notes Receivable as of June 30, 2012
			Ending Balance Individually Evaluated for Impairment
	Ending Balance				Ending Balance Collectively Evaluated for Impairment		Ending Balance		Ending Balance Individually Evaluated for Impairment		Ending Balance Collectively Evaluated for Impairment
	(in 000s)
Contract term less than one year:
Trade and other receivables, current	$	170,598	$	1,589	$	169,009	$	173,889	$	3,655	$	170,234
Contract term greater than one year:
Trade receivables, current		82,600		63,193		19,407		85,075		41,213		43,862
Trade receivables, noncurrent		40,178		17,961		22,217		30,476		7,213		23,263
		122,778		81,154		41,624		115,551		48,426		67,125
Lease receivables, current		6,701		6,701		—		14,763		14,763		—
Lease receivables, noncurrent		9,928		9,928		—		15,070		15,070		—
		16,629		16,629		—		29,833		29,833		—
Notes receivable, current		3,411		3,411		—		5,188		5,188		—
Notes receivable, noncurrent		17,114		17,114		—		13,269		13,269		—
		20,525		20,525		—		18,457		18,457		—
Total current		263,310		74,894		188,416		278,915		64,819		214,096
Total noncurrent		67,220		45,003		22,217		58,815		35,552		23,263
Total	$	330,530	$	119,897	$	210,633	$	337,730	$	100,371	$	237,359

The activity related to the allowance for doubtful accounts for the year ended June 30, 2013 is summarized below:

	Allowance for Doubtful Accounts
	Beginning Balance as of June 30, 2012			Charge- offs		Recoveries		Provision			Ending Balance as of June 30, 2013			Ending Balance Individually Evaluated for Impairment			Ending Balance Collectively Evaluated for Impairment
	(in 000s)
Contract term less than one year:
Trade and other receivables, current	$	(6,138	)	$	1,449	$	—	$	184		$	(4,505	)	$	(1,445	)	$	(3,060	)
Contract term greater than one year:
Trade receivables, current		(7,935	)		3,973		822		(7,168	)		(10,308	)		(8,101	)		(2,207	)
Trade receivables, noncurrent		(1,279	)		2,598		—		(3,083	)		(1,764	)		—			(1,764	)
		(9,214	)		6,571		822		(10,251	)		(12,072	)		(8,101	)		(3,971	)
Lease receivables, current		—			—		—		—			—			—			—
Lease receivables, noncurrent		—			—		—		—			—			—			—
		—			—		—		—			—			—			—
Notes receivable, current		—			—		—		—			—			—			—
Notes receivable, noncurrent		(1,750	)		2,856		—		(1,106	)		—			—			—
		(1,750	)		2,856		—		(1,106	)		—			—			—
Total current		(14,073	)		5,422		822		(6,984	)		(14,813	)		(9,546	)		(5,267	)
Total noncurrent		(3,029	)		5,454		—		(4,189	)		(1,764	)		—			(1,764	)
Total	$	(17,102	)	$	10,876	$	822	$	(11,173	)	$	(16,577	)	$	(9,546	)	$	(7,031	)

The activity related to the allowance for doubtful accounts for the year ended June 30, 2012 is summarized below:

	Allowance for Doubtful Accounts
	Beginning Balance as of June 30, 2011			Charge- offs		Recoveries		Provision			Ending Balance as of June 30, 2012			Ending Balance Individually Evaluated for Impairment			Ending Balance Collectively Evaluated for Impairment
	(in 000s)
Contract term less than one year:
Trade and other receivables, current	$	(5,875	)	$	1,550	$	243	$	(2,056	)	$	(6,138	)	$	(2,163	)	$	(3,975	)
Contract term greater than one year:
Trade receivables, current		(5,184	)		355		513		(3,619	)		(7,935	)		(4,867	)		(3,068	)
Trade receivables, noncurrent		(507	)		1,666		—		(2,438	)		(1,279	)		(118	)		(1,161	)
		(5,691	)		2,021		513		(6,057	)		(9,214	)		(4,985	)		(4,229	)
Lease receivables, current		—			—		—		—			—			—			—
Lease receivables, noncurrent		—			—		—		—			—			—			—
		—			—		—		—			—			—			—
Notes receivable, current		—			—		—		—			—			—			—
Notes receivable, noncurrent		—			—		—		(1,750	)		(1,750	)		(1,750	)		—
		—			—		—		(1,750	)		(1,750	)		(1,750	)		—
Total current		(11,059	)		1,905		756		(5,675	)		(14,073	)		(7,030	)		(7,043	)
Total noncurrent		(507	)		1,666		—		(4,188	)		(3,029	)		(1,868	)		(1,161	)
Total	$	(11,566	)	$	3,571	$	756	$	(9,863	)	$	(17,102	)	$	(8,898	)	$	(8,204	)

Gaming is a highly regulated industry requiring customers to obtain a licensing and verify with the applicable regulatory agency that they have the financial resources to operate a gaming establishment. Many of the Company's customers, including new casinos that have opened in recent years, are owned by existing multi-property customers that have established a favorable payment history with the Company. Customer accounts typically include a mix of trade receivables balances with terms for periods of 30 to 120 days and financing receivables resulting from extended payment terms.

The Company monitors the credit quality of its accounts receivable by reviewing an aging of customer invoices. Invoices are considered past due if a scheduled payment is not received within agreed upon terms. The Company's notes receivable are reviewed quarterly, at a minimum, for impairment. The Company also reviews a variety of other relevant qualitative information such as collection experience, economic conditions and specific customer financial conditions to evaluate credit risk in recording the allowance for doubtful accounts or as an indicator of an impaired loan.

The Company accrues interest, if applicable, on its accounts and notes receivables per the terms of the agreement. Interest is not accrued on past due accounts and notes receivable, or individual amounts that the Company has determined and specifically identified as not collectible.

The following summarizes the aging of past due receivables, excluding trade accounts receivable with a contract term less than one year, as of June 30, 2013:

	1 to 90 Days Past Due		91 to 180 Days Past Due		181 + Days Past Due		Total Past Due		Current		Total Receivable		Recorded Investment in Receivables on Nonaccrual Status		Recorded Investment 90 Days and Accruing
	(in 000s)
Trade receivables	$	9,636	$	2,851	$	6,869	$	19,356	$	103,422	$	122,778	$	19,356	$	—
Lease receivables		—		—		—		—		16,629		16,629		—		—
Notes receivable		—		—		—		—		20,525		20,525		—		—
Total	$	9,636	$	2,851	$	6,869	$	19,356	$	140,576	$	159,932	$	19,356	$	—

The following summarizes the aging of past due receivables, excluding trade accounts receivable with a contract term less than one year, as of June 30, 2012:

	1 to 90 Days Past Due		91 to 180 Days Past Due		181 + Days Past Due		Total Past Due		Current		Total Receivable		Recorded Investment in Receivables on Nonaccrual Status		Recorded Investment 90 Days and Accruing
	(in 000s)
Trade receivables	$	7,278	$	4,197	$	8,735	$	20,210	$	95,341	$	115,551	$	20,210	$	—
Lease receivables		—		—		—		—		29,833		29,833		—		—
Notes receivable		1,427		1,423		319		3,169		15,288		18,457		18,457		—
Total	$	8,705	$	5,620	$	9,054	$	23,379	$	140,462	$	163,841	$	38,667	$	—

The aging of customer invoices and note balances are based on their contractually agreed upon payment terms, which in certain rare circumstances have been modified from the original financing terms. The modification of original financing terms are infrequent and generally do not represent a concession as they result only in a delay of payment that is typically insignificant to total trade, lease and notes receivable balances.

The Company provided development financing to certain customers in the form of notes receivable. Notes receivable as of June 30, 2012, include $15.6 million, net of discounts of $3.3 million, and as of June 30, 2013, $19.5 million related to development financing loans made to HBG Connex S.P.A. ("HBG") to allow it to make advance payments necessary to obtain gaming licenses in the Italian Video Lottery Terminal ("VLT") market. The Company entered into a settlement agreement with HBG (see Note 12 to consolidated financial statements, Commitments and Contingencies) which, amongst other matters, resulted in the replacement of the existing non-interest bearing development financing notes receivable with a new note receivable bearing a stated interest rate of 4% per annum with graduated monthly installments over four years from July 2013 to June 2017. In connection with the settlement agreement, the discounts totaling $3.3 million associated with the original HBG notes receivable were reversed during the year ended June 30, 2013 and the $4.6 million in contract rights associated with HBG were derecognized (see Note 5 to consolidated financial statements, Goodwill and Intangible Assets). This resulted in a $1.3 million charge recorded to SG&A. There were no significant modifications of accounts receivable during the period.

Impairment is recognized when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of a note arrangement. During the year ended June 30, 2012, based on an individual customer's filing of a bankruptcy petition, the Company recognized an impairment charge on notes receivable and a related allowance of $1.8 million after estimating the fair value of the collateral less costs to sell. During the year ended June 30, 2013, the Company recognized an impairment charge of $1.1 million based on the actual proceeds received from the sale of the collateral. As a result, there were no recorded investments in impaired loans as of June 30, 2013.

The impaired loan balance as of June 30, 2012 was as follows:

	Recorded Investment		Unpaid Principal Balance		Related Allowance			Average Recorded Investment		Interest Income Recognized
	(in 000s)
With an allowance recorded:
Notes receivable	$	2,856	$	2,856	$	(1,750	)	$	2,856	$	—
With no related allowance recorded:
Notes receivable		—		—		—			—		—
Total	$	2,856	$	2,856	$	(1,750	)	$	2,856	$	—

The fair value of accounts and notes receivable, net, is estimated by discounting expected future cash flows using current interest rates at which similar loans would be made to borrowers, with similar credit ratings and remaining maturities. As of June 30, 2013 and 2012, respectively, the fair value of the accounts and notes receivable, net, approximate the carrying value.

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DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Jun. 30, 2013

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1.     DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Bally Technologies, Inc. ("Bally" or the "Company"), a Nevada corporation, is a diversified global gaming company that designs, manufactures, operates, and distributes advanced technology-based gaming devices, systems, server-based solutions, custom mobile applications, and interactive applications. The Company's innovations and technology solutions allow its customers to more effectively manage their operations using our wide range of marketing, data management and analysis, accounting, player tracking, security, and other software applications and tools. The Company also provides hardware, including spinning-reel and video gaming devices, specialty gaming devices, and wide-area progressive systems. Under its business-to-business model, the Company supports customers that include traditional land-based, riverboat, and Native American casinos, video lottery and central determination markets.

Principles of presentation and consolidation

The accompanying consolidated financial statements include the accounts of Bally Technologies, Inc., and its wholly owned and partially owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and, pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"), include all adjustments necessary to fairly present the Company's consolidated financial position, results of operations and cash flows for each period presented. References to specific U.S. GAAP within this report cite topics within the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC").

All intercompany accounts and transactions have been eliminated in consolidation.

Use of estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Discontinued Operations

The Company was the general partner of Rainbow Casino Vicksburg Partnership ("RCVP"), which operated the Rainbow Casino, a dockside riverboat casino in Vicksburg, Mississippi. On April 5, 2010, the Company entered into a definitive purchase agreement to sell the Rainbow Casino which closed on June 8, 2010. Per the terms of the sale agreement, the Company had certain post-closing adjustments during fiscal year 2011, which reduced its gain on the sale of the Rainbow Casino in fiscal year 2010 by approximately $0.4 million, net of income taxes. The Company's Casino Operations have been classified as discontinued operations in the accompanying financial statements.

Fair value of financial instruments

The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amounts reflected in the accompanying consolidated balance sheets for cash equivalents, accounts and notes receivable, investment securities to fund jackpot liabilities, accounts payable, jackpot liabilities and long-term debt approximate their respective fair values.

All financial assets and liabilities are recognized or disclosed at fair value using a fair value hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

There are three levels of inputs that may be used to measure fair value:

• •

  Level 1: quoted prices in active markets for identical assets or liabilities;

  •

  Level 2: inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or

  •

  Level 3: unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The carrying amounts reflected in the accompanying consolidated balance sheets for cash equivalents, accounts and notes receivable, investment securities to fund jackpot liabilities, accounts payable, jackpot liabilities and long-term debt approximate their respective fair values. Cash equivalents and investment securities to fund jackpot liabilities have Level 1 inputs with values based on quoted market prices. Accounts and notes receivable and jackpot liabilities have Level 3 inputs and were valued using Discounted Cash Flows ("DCF") incorporating expected future payment timing and current borrowing rates. Long-term debt has Level 2 inputs and was valued using DCF incorporating expected future payment timing and current borrowing rates.

The Company transacts business in various foreign currencies and has international sales and expenses denominated in foreign currencies, subjecting the Company to foreign currency risk. The Company enters into foreign currency forward contracts, generally with maturities of twelve months or less, to hedge recognized foreign currency assets and liabilities to reduce the risk that earnings and cash flows will be adversely affected by changes in foreign currency exchange rates. The gains or losses resulting from changes in the fair value of these forward contracts, which are not designated as accounting hedges, are reported in other income (expense) in the consolidated statements of operations, and generally offset the gains and losses associated with the underlying foreign-currency-denominated balances, which are also reported in other income (expense). As of June 30, 2013 and 2012, euro forward contracts for a total of $33.0 million and $38.0 million, respectively, or the notional equivalent of €25.3 million and €30 million, were outstanding. In addition, as of June 30, 2013, a pound sterling forward contract for $2.3 million, or the equivalent of £1.5 million, was outstanding.

The Company also uses interest rate derivatives to manage the interest expense generated by variable rate debt. See Note 7 to consolidated financial statements, Long-Term Debt.

The Company's derivative financial instruments are measured at fair value on a recurring basis, and the balances were as follows:

	Fair Value Measurements Using Input Type
	Level 1		Level 2		Level 3
	(in 000s)
As of June 30, 2013:
Other current assets:
Foreign currency derivative financial instrument	$	—	$	397	$	—
Liabilities:
Accrued and other liabilities:
Foreign currency derivative financial instrument	$	—	$	22	$	—
Interest rate derivative financial instruments	$	—	$	4,689	$	—
Other liabilities:
Interest rate derivative financial instrument	$	—	$	4,927	$	—

	Fair Value Measurements Using Input Type
	Level 1		Level 2		Level 3
	(in 000s)
As of June 30, 2012:
Other current assets:
Foreign currency derivative financial instrument	$	—	$	2,850	$	—
Liabilities:
Accrued and other liabilities:
Foreign currency derivative financial instrument	$	—	$	115	$	—
Interest rate derivative financial instruments	$	—	$	4,804	$	—
Other liabilities:
Interest rate derivative financial instrument	$	—	$	9,028	$	—

The valuation techniques used to measure the fair value of the derivative financial instruments above in which the counterparties have high credit ratings, were derived from pricing models, such as discounted cash flow techniques, with all significant inputs derived from or corroborated by observable market data. The Company's discounted cash flow techniques use observable market inputs, such as LIBOR-based yield curves and foreign currency forward rates.

Accounting for Derivative Instruments and Hedging Activity

The Company assesses, both at the inception of each hedge and on an on-going basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of the hedged items resulting in hedge accounting treatment. The interest rate derivative instruments meet these requirements and are accounted for as a cash flow hedges.

The impact of the cash flow hedge and non-designated foreign currency derivatives on the consolidated financial statements is depicted below:

	Amount of Loss Recognized in OCI on Derivative (Effective Portion)										Amount of Loss Reclassified From Accumulated OCI into Income (Effective Portion)
Cash Flow Hedging Derivative	Year Ended June 30, 2013			Year Ended June 30, 2012			Year Ended June 30, 2011			Location of Loss	Year Ended June 30, 2013			Year Ended June 30, 2012			Year Ended June 30, 2011
	(in 000s)										(in 000s)
Interest rate swap agreement	$	(921	)	$	(14,969	)	$	(3,661	)	Interest expense	$	(5,137	)	$	(5,039	)	$	(2,458	)

	Amount of Loss Recognized in Income on Derivative (Ineffective Portion)
Location of Loss	Year Ended June 30, 2013			Year Ended June 30, 2012		Year Ended June 30, 2011
	(in 000s)
Interest expense	$	(9	)	$	—	$	—

	Amount of Income (Loss) Recognized in Other Income (Expense)
Non-Designated Derivative	Year Ended June 30, 2013			Year Ended June 30, 2012		Year Ended June 30, 2011
	(in 000s)
Foreign Currency Forward Contract	$	(1,151	)	$	4,246	$	(135	)

Cash and cash equivalents

Cash and cash equivalents consist of highly liquid debt instruments purchased with an original maturity of three months or less at the date of purchase and are carried at cost, which approximates fair value.

Restricted cash

The Company maintains jackpot funds totaling approximately $12.9 million and $13.6 million at June 30, 2013 and 2012, respectively, to ensure availability of funds to pay wide-area progressive jackpot awards.

Accounts and notes receivable and allowances for doubtful accounts

Accounts and notes receivable are stated at face value less an allowance for doubtful accounts. The Company generally grants customers credit terms for periods of 30 to 120 days, but may also grant extended payment terms to some customers for periods generally up to three years, with interest generally at market rates.

The Company evaluates the credit quality of its accounts and notes receivable and establishes an allowance for doubtful accounts based on a combination of factors including, but not limited to, customer collection experience, economic conditions, and the customer's financial condition. In addition to specific account identification, which includes the review of any modifications of accounts and notes receivable, if applicable, the Company utilizes historic collection experience for the most recent twelve month period to establish an allowance for doubtful accounts. Receivables are written off only after the Company has exhausted all collection efforts.

Inventories

Inventories are stated at the lower of cost, determined on a first in, first out basis, or market. Cost elements included in work-in-process and finished goods include raw materials, direct labor and manufacturing overhead. Inventories consist of the following:

	June 30,
	2013		2012
	(in 000s)
Raw materials	$	42,464	$	50,498
Work-in-process		1,508		1,713
Finished goods		24,435		22,855
Total	$	68,407	$	75,066

The Company regularly reviews inventory quantities and updates estimates for the net realizable value of inventories to estimate potential excess or obsolete inventory. Our process includes examining the carrying values of new and used gaming devices, parts and ancillary equipment in comparison to the current fair market values for such equipment (less costs to sell or dispose). The determination of obsolete or excess inventory requires us to estimate the future demand for our products within specific time horizons, generally one year or less. Additional factors involved in this analysis include the overall levels of our inventories, the costs required to sell the products, including refurbishment costs, importation costs for international shipments, and the overall projected demand for products after release of the next generation of products. Demand for parts inventory is also subject to technical obsolescence.

The Company recorded inventory write-downs totaling approximately $6.1 million, $5.9 million and $3.6 million during the years ended June 30, 2013, 2012 and 2011, respectively. Additional valuation charges could occur in the future as a result of changes in the factors listed above. These charges are included in the cost of gaming equipment and systems in the consolidated statements of operations.

Deferred revenue and deferred cost of revenue

Deferred revenue arises from the timing differences between the shipment or installation of gaming equipment and systems products and the satisfaction of all revenue recognition criteria consistent with the Company's revenue recognition policy. Deferred cost of revenue consists of the direct costs associated with the manufacture of gaming equipment and systems products for which revenue has been deferred. Deferred revenue and deferred cost of revenue that are expected to be realized within one year are classified as current liabilities and current assets, respectively.

Restricted long-term investments

The Company purchases U.S. Treasury Strip Securities for the benefit of jackpot winners who elect to receive annual or weekly installment payments. These securities are held to maturity and recorded at cost plus interest accretion to date. Such securities are included in restricted long-term investments in the consolidated balance sheets, and totaled $14.8 million and $12.2 million as of June 30, 2013 and 2012, respectively.

Property, plant and equipment and leased gaming equipment

Property, plant and equipment is stated at cost and depreciated over the estimated useful lives or lease term, if less, using the straight line method as follows: buildings and improvements, ten years; furniture, fixtures and equipment, three to seven years; and leasehold improvements, the shorter of lease term or ten years. Leased gaming equipment is stated at cost and depreciated over the estimated useful lives ranging from one to three and one-half years. Depreciation and asset charges related to leased gaming equipment are recorded to cost of gaming operations in the consolidated statements of operations.

Significant replacements and improvements are capitalized while other maintenance and repairs are expensed. The cost and accumulated depreciation of assets retired or otherwise disposed of are eliminated from the accounts and any resulting gain or loss is credited or charged to income.

Depreciation and amortization expense

For the years ended June 30, 2013, 2012 and 2011, depreciation and amortization expense from continuing operations totaled $88.3 million, $81.5 million and $75.0 million, respectively. Of these amounts, $65.6 million, $58.7 million and $55.1 million of depreciation and amortization expense were included in cost of gaming equipment and systems and cost of gaming operations in the consolidated statements of operations.

Impairment of long-lived assets and goodwill

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets are measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset, undiscounted and without interest. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets.

The Company reviews goodwill for impairment annually at the beginning of its fourth fiscal quarter, or whenever events or changes in circumstances indicate the carrying value may not be recoverable or warrant a revision to the estimated remaining useful life. The Company performs the impairment analysis of goodwill at a reporting unit level by comparing the fair value of a reporting unit with its carrying value, including goodwill. If the fair value is less than the carrying value, the impairment to be recognized is measured as the amount by which the carrying amount of the goodwill exceeds the fair value of the reporting unit goodwill.

During the years ended June 30, 2013, 2012 and 2011, no impairment charges related to long-lived assets or goodwill were recorded.

Jackpot liabilities

The Company recognizes jackpot expense, included in cost of gaming operations in the consolidated statements of operations, and a liability for jackpots incurred but not yet won in each jurisdiction based on the discounted net present value of the progressive meter liability. Jackpots are payable either in weekly or annual installments, or immediately in the case of instant win progressive jackpots. Winners may elect to receive a single payment for the present value of a jackpot discounted at applicable interest rates in lieu of annual installments. Interest rates used in the single payment calculation vary by jurisdiction and are impacted by market forces and other economic conditions.

Revenue recognition

The Company's revenue recognition policy is to record revenue when all of the following criteria have been satisfied:

• •

  Persuasive evidence of an arrangement exists;

  •

  The price or fee to the customer is fixed or determinable;

  •

  Collectability is reasonably assured;

  •

  Delivery has occurred; and

  •

  No significant contractual obligations remain.

Revenues are reported net of incentive rebates, discounts, sales taxes, and all other items of a similar nature except for gaming industry taxes on certain Gaming Operations revenue. The gross amounts of these gaming taxes are not presented separately in the financial statements because they are not significant. For products sold under arrangements with extended payment terms the probability of collection is evaluated based on a review of the customer's credit worthiness and a review of historic collection experience on contracts with extended payment terms. As a result of such review, the Company recognizes revenue on extended payment term arrangements as the Company has determined that collectability is reasonably assured and the fee is considered fixed and determinable.

Games placed with customers on a trial basis are recorded as revenue once the trial period has ended, the customer has accepted the games and all other revenue recognition criteria have been satisfied. Amounts billed to customers prior to completing the earnings process are deferred until the revenue recognition criteria are satisfied.

Gaming Operations Revenue.    Gaming operations revenue consists of the operation of linked progressive systems and the rental of gaming devices, game content and the related systems placed with customers. Fees under these arrangements are earned and recognized based on a share of money wagered, a share of the net winnings, or on a fixed daily rate. The daily fee entitles the customer to full use of the gaming device and includes maintenance, licensing of the game content software and connection to a linked progressive system, where applicable. In certain markets, the Company also charges a daily system connection fee for the customer to connect to a central determination system and/or back-office system. The Company does not consider these arrangements to have multiple revenue-generating activities as the services offered are a comprehensive solution in exchange for a daily fee and all of the products and services are delivered simultaneously. Gaming operations revenue is recognized under general revenue recognition guidance as the deliverables provide the customer with rights to use tangible gaming devices and software that is essential to the functionality of the gaming devices.

Gaming Equipment Revenue.    Gaming Equipment revenue is generated from the sale of gaming devices and licensing rights to game content software that is installed in the gaming device, parts, and other ancillary equipment. Arrangements may also include sales of game content conversion kits which enable customers to replace game content without purchasing a new gaming device. Gaming equipment arrangements do not include maintenance and product support fees beyond a standard warranty period. The recognition of revenue from the sale of gaming devices occurs as title and risk of loss have passed to the customer and all other revenue recognition criteria have been satisfied.

As the combination of game content software and the tangible gaming device function together to deliver the product's essential functionality, revenue from the sale of gaming devices is recognized under general revenue recognition guidance. Game content conversion kits are considered software deliverables and are recognized in accordance with software revenue recognition guidance.

Systems Revenue.    Systems revenue arrangements generally include a combination of systems software licenses, systems-based hardware products, maintenance and product support fees and professional services. The primary function of systems software licensed by the Company is to aid customers to more effectively run their business with marketing, data management and analysis, accounting, player tracking and security features.

Revenue for systems software and maintenance and product support fees is recognized under software revenue recognition guidance. Although the systems software and certain systems-based hardware function together, the primary functionality of the systems software is derived from the software and the systems software is not essential to the functionality of the systems-based hardware.

The Company licenses systems software on a perpetual basis or under time-based licenses. Revenue from perpetual license software is recognized at the inception of the license term provided all revenue recognition criteria have been satisfied. Revenue from maintenance and product support fees sold with perpetual licenses is recognized over the term of the support period. The Company's time-based licenses are generally for twelve month terms and are bundled with software maintenance and product support fees. All revenue from such arrangements is recognized over the term of the license.

Systems-based hardware includes embedded software that is essential to the functionality of the hardware. Accordingly, revenue related to all systems-based hardware sales and related maintenance and product support fees are recognized under general revenue recognition guidance. Revenue from the sale of systems-based hardware is generally recognized upon delivery when title and risk of loss have passed to the customer and all other revenue recognition criteria are satisfied. However, in the case of arrangements involving a systems installation, revenue on the systems-based hardware is generally not recognized until the system has been installed and the customer has accepted the system. Hardware maintenance and product support fees are recognized on a straight-line basis over the term of the support period which is generally twelve months.

Software maintenance and product support provides customers with rights to unspecified software product upgrades, maintenance and patches released during the term of the support period. The Company's software maintenance and product support arrangements are generally for twelve month periods. Software maintenance and product support is recognized on a straight-line basis over the term of the support period.

Multiple Element Arrangements.    The Company enters into revenue arrangements that may consist of multiple deliverables of its products and services. For example, customers may enter into arrangements with the Company for the implementation of systems software and the sale of gaming devices. Arrangements for the implementation of systems software will generally include a combination of systems software licenses, systems-based hardware products, maintenance and product support fees, and professional services. Certain gaming equipment arrangements may also include the sale of gaming devices and game content conversion kits.

Revenue arrangements with multiple deliverables are allocated to separate units of accounting if the deliverables meet both of the following criteria:

• •

  The delivered items have value to the customer on a stand-alone basis. The items have value on a standalone basis if they are sold separately by any vendor or the customer could resell the delivered items on a standalone basis; and

  •

  If the arrangement includes a general right of return relative to the delivered items, delivery or performance of the undelivered items is considered probable and substantially in the control of the Company.

At the inception of a multiple element arrangement, fees under the arrangement are allocated to the nonsoftware deliverables, and to the software deliverables as a group based on their relative selling price. Software deliverables are further subject to separation and allocation based on software revenue recognition guidance as described in the following paragraph. When applying the relative selling price method, a hierarchy is used for estimating the selling price based first on vendor-specific objective evidence ("VSOE"), then third-party evidence ("TPE") and finally management's estimate of the selling price ("ESP"). Revenue for each unit of accounting is recognized when the relevant recognition criteria for each respective element has been met.

In allocating arrangement fees under the relative selling price hierarchy, the Company uses VSOE for all products which have been sold on a stand-alone basis or the stated renewal rate for maintenance and product support fees. As TPE is generally not available, the Company uses ESP for products that are not sold on a stand-alone basis and for recently introduced products that are sold on a stand-alone basis but for which a history of stand-alone sales has not yet been developed. Following these guidelines, the Company uses either VSOE or ESP for gaming devices, system-based hardware products, maintenance and product support fees associated with perpetual licenses and professional services; and ESP for perpetual and time-based software licenses and maintenance and product support fees associated with time-based licenses.

The Company uses the residual method to recognize revenue allocated to software deliverables. Under the residual method, the fair value of the undelivered elements is deferred and the remaining portion of the arrangement fee is allocated to the delivered element and is recognized as revenue. In arrangements in which the Company does not have VSOE of fair value of all undelivered software elements, revenue is deferred until delivery occurs or VSOE of fair value has been established for any remaining undelivered software elements. In the event the only undelivered software element is maintenance and product support for which VSOE of fair value does not exist, the revenue is recognized ratably over the maintenance and product support period.

The establishment of VSOE requires judgment as to whether there is a sufficient quantity of items sold on a stand-alone basis and whether the prices demonstrate an appropriate level of concentration to conclude that VSOE exists. In determining ESP, management considers a variety of information including historic pricing and discounting practices, competitive market activity, internal costs, and the pricing and discounting practices of products sold in bundled arrangements.

Advertising costs

The Company expenses advertising costs as incurred, which totaled $10.0 million, $9.3 million and $9.6 million from continuing operations for the years ended June 30, 2013, 2012 and 2011, respectively.

Warranty and product indemnifications

Gaming devices are typically sold with a 90-day parts and labor warranty and certain sales agreements include third-party indemnifications for intellectual property infringement. Warranty expense is calculated using historical experience, and totaled $3.6 million, $4.1 million and $2.5 million for the years ended June 30, 2013, 2012 and 2011, respectively, and no costs have been incurred or accrued related to indemnities.

Research and development

Research and development expenses related to product development are expensed until technological feasibility has been established. The Company has determined that technological feasibility is not established for its products until completion of the regulatory approval process. As this process is completed shortly before the products are made available to customers, any development costs incurred after the establishment of technological feasibility are typically not significant and expensed as incurred.

Income taxes

The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. Taxes on income of the Company's foreign subsidiaries are provided at the tax rates applicable to the tax jurisdictions in which they are located.

The Company recognizes tax benefits from an uncertain position only if it is more likely than not that the position will be sustained upon examination by taxing authorities based on the technical merits of the issue. The amount recognized is the largest benefit that the Company believes has greater than a 50% likelihood of being realized upon settlement. The Company recognizes interest and penalties related to uncertain tax positions as tax expense.

Share-based compensation

The Company accounts for share-based compensation based on the calculated fair value of the award measured on the grant date, which is recognized, net of estimated forfeitures, as an expense over the employee's requisite service period. The Company classifies share-based compensation expense in the same financial statement line as cash compensation, including cost of gaming equipment and systems and casino operations, research and development costs, and selling, general and administrative expenses.

The excess tax benefit from stock option exercises and tax deductions in excess of compensation cost recognized are classified as a financing activity in the statement of cash flows.

Foreign currency translation

The functional currency of the Company's foreign subsidiaries is typically their local currency. Assets and liabilities of foreign operations are translated into U.S. dollars at the rate of exchange at the end of the period, and the income and expense accounts are translated at the average rate of exchange for the period. Translation adjustments are reflected as accumulated other comprehensive income within stockholders' equity. Gains and losses on foreign currency transactions are included in the consolidated statements of operations.

Recently adopted accounting pronouncements

On July 1, 2011, the Company adopted new accounting guidance related to troubled debt restructuring. The guidance clarifies which loan modifications constitute troubled debt restructurings to assist creditors in determining whether a modification of the terms of a receivable meets the criteria to be considered a troubled debt restructuring, both for purposes of recording an impairment loss and for disclosures of troubled debt restructurings.

On July 1, 2011, the Company adopted new accounting guidance related to accruals for casino jackpot liabilities. Specifically, the guidance clarifies that an entity should not accrue jackpot liabilities, or portions thereof, before a jackpot is won if the entity can avoid paying the jackpot. Jackpots should be accrued and charged to revenue when an entity has the obligation to pay the jackpot. The guidance applies to both base and progressive jackpots. The new guidance was applied by recording a cumulative-effect adjustment to opening retained earnings of $2.4 million on July 1, 2011.

On December 31, 2011, the Company chose to early adopt new accounting guidance to make the presentation of items within other comprehensive income ("OCI") more prominent. The new standard requires companies to present items of net income, items of OCI and total comprehensive income in one continuous statement or two separate consecutive statements, and companies are no longer allowed to present items of OCI only in the statement of stockholders' equity. The Company chose to present the items in two separate consecutive statements. The new guidance was applied retrospectively.

Effective December 31, 2011, new accounting guidance for testing goodwill impairment permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The Company has not utilized this method in its evaluation of goodwill impairment.

Effective September 30, 2012, new accounting guidance for testing indefinite-lived intangible assets permits an entity to first access qualitative factors to determine whether the existence of events and circumstances indicate that it is more likely than not that the indefinite-lived intangible asset is impaired. The outcome of the assessment is used as a basis for determining whether it is necessary to determine the fair value of the indefinite-lived intangible asset and perform the quantitative impairment test by comparing the fair value with the carrying amount in accordance with ASC Topic 350. The Company has not yet utilized this method in its evaluation of indefinite-lived intangible assets impairment.

Recently issued accounting pronouncements not yet adopted

In December 2011, the FASB issued new accounting guidance for disclosures about offsetting assets and liabilities which requires an entity to disclose information about financial instruments that have been offset and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. Entities will be required to provide both net (offset amounts) and gross information in the notes to the financial statements for relevant assets and liabilities that are offset. The new guidance is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The Company expects to adopt this guidance in fiscal year 2014 and does not believe it will have a significant impact on its consolidated results of operations, financial condition and cash flows.

In February 2013, the FASB issued new accounting guidance to improve the reporting of reclassifications out of accumulated other comprehensive income ("AOCI"). Under the guidance, an entity is required to provide information about the amounts reclassified out of AOCI by component. In addition, an entity is required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income, but only if the amount reclassified is required to be reclassified in its entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about those amounts. The guidance did not change the requirements for reporting net income or other comprehensive income in the financial statements. The new guidance is effective for annual reporting periods beginning on or after December 15, 2012, and interim periods within those annual periods. The Company expects to adopt this guidance in fiscal year 2014 and does not believe it will have a significant impact on its consolidated results of operations, financial condition and cash flows.

In February 2013, the FASB issued new accounting guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation is fixed at the reporting date, including debt arrangements, other contractual obligations, and settled litigation and judicial rulings. The new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2013. The Company expects to adopt this guidance in fiscal year 2015 and does not believe it will have a significant impact on its consolidated results of operations, financial condition and cash flows.

The Company believes there is no additional new accounting guidance adopted but not yet effective that is relevant to the readers of our financial statements. However, there are numerous new proposals under development which, if and when enacted, may have a significant impact on its financial reporting.

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DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) In Millions, unless otherwise specified	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2013 Foreign exchange forward contracts Derivative instruments not designated as hedging instruments EUR USD ($)	Jun. 30, 2013 Foreign exchange forward contracts Derivative instruments not designated as hedging instruments EUR EUR (€)	Jun. 30, 2012 Foreign exchange forward contracts Derivative instruments not designated as hedging instruments EUR USD ($)	Jun. 30, 2012 Foreign exchange forward contracts Derivative instruments not designated as hedging instruments EUR EUR (€)	Jun. 30, 2013 Foreign exchange forward contracts Derivative instruments not designated as hedging instruments GBP USD ($)	Jun. 30, 2013 Foreign exchange forward contracts Derivative instruments not designated as hedging instruments GBP GBP (£)
Financial instruments
Maximum maturity period for foreign currency forward contracts	12 months
Fair value of financial instruments
Total amount outstanding under foreign currency forward contracts		$ 33.0	€ 25.3	$ 38.0	€ 30.0	$ 2.3	£ 1.5

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EARNINGS PER SHARE (Tables)

12 Months Ended

Jun. 30, 2013

EARNINGS PER SHARE

Schedule of basic and diluted earnings per share

	Year Ended June 30,
	2013		2012		2011
	(in 000s, except per share amounts)
Amounts attributable to Bally Technologies, Inc.:
Income from continuing operations, net of tax	$	141,444	$	101,148	$	98,666
Loss on sale of discontinued operations, net of tax		—		—		(403	)
Diluted earnings attributable to Bally Technologies, Inc.	$	141,444	$	101,148	$	98,263
Weighted average common shares outstanding		40,120		42,985		51,960
Dilutive effect of:
Stock options, Restricted Stock Units ("RSU") and restricted stock		872		1,435		2,459
Warrants		—		—		1
Weighted average diluted shares outstanding		40,992		44,420		54,420
Basic earnings per share attributable to Bally Technologies, Inc.:
Income from continuing operations	$	3.53	$	2.35	$	1.90
Loss on sale of discontinued operations		—		—		(0.01	)
Basic earnings per share	$	3.53	$	2.35	$	1.89
Diluted earnings per share attributable to Bally Technologies, Inc.:
Income from continuing operations	$	3.45	$	2.28	$	1.82
Loss on sale of discontinued operations		—		—		(0.01	)
Diluted earnings per share	$	3.45	$	2.28	$	1.81

Schedule of anti-dilutive securities excluded from computation of earnings per share

	Year Ended June 30,
	2013		2012		2011
	(in 000s)
Stock options, RSU and restricted stock		70		574		688

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ACCRUED AND OTHER LIABILITIES (Tables)

12 Months Ended

Jun. 30, 2013

ACCRUED AND OTHER LIABILITIES

Schedule of accrued and other liabilities

	June 30,
	2013		2012
	(in 000s)
Payroll and related costs	$	39,077	$	30,212
Legal, professional and consulting costs		9,948		13,548
Customer deposits		9,430		6,154
Royalties		4,919		4,019
Regulatory approval costs		2,922		2,394
Sales, use and gaming taxes		3,957		4,322
Interest rate derivative financial instruments		4,689		4,804
Foreign currency derivative financial instrument		22		115
Accrued purchase of treasury stock		—		2,130
Other		16,163		17,612
Total accrued and other liabilities	$	91,127	$	85,310

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INCOME TAXES (Tables)

12 Months Ended

Jun. 30, 2013

INCOME TAXES

Schedule of consolidated income from continuing operations before taxes and noncontrolling interest for domestic and foreign operations

	Year Ended June 30,
	2013			2012		2011
	(in 000s)
United States	$	220,439		$	161,043	$	131,668
Foreign		(4,164	)		3,416		11,725
Total	$	216,275		$	164,459	$	143,393

Schedule of components of the Company's income tax expense from continuing operations

	Year Ended June 30,
	2013			2012			2011
	(in 000s)
Current:
Federal	$	73,441		$	61,115		$	12,614
State		8,623			9,085			5,585
Foreign		4,299			2,902			3,245
		86,363			73,102			21,444
Deferred:
Federal		(5,346	)		(7,169	)		23,984
State		(509	)		(1,383	)		(919	)
Foreign		(3,934	)		(1,001	)		673
		(9,789	)		(9,553	)		23,738
Income tax expense	$	76,574		$	63,549		$	45,182

Schedule of the difference between the U.S. statutory federal income tax rate and the Company's effective income tax rate

	Year Ended June 30,
	2013			2012			2011
U.S. federal statutory income tax rate		35.0	%		35.0	%		35.0	%
Change in income tax contingencies		1.4			2.1			(2.5	)
State income taxes, net of federal benefit		2.6			2.8			2.0
Foreign earnings subject to U.S. tax		(0.3	)		(0.3	)		2.9
Change in valuation allowance		—			(0.6	)		(0.2	)
Tax credits		(2.5	)		(1.2	)		(4.7	)
Domestic production activities deduction		(2.7	)		(2.7	)		(1.5	)
Foreign losses-no future benefit		0.9			2.0			—
Other, net		1.0			1.5			0.5
		35.4	%		38.6	%		31.5	%

Schedule of major components of the deferred tax assets and liabilities from continuing operations

	June 30,
	2013			2012
	(in 000s)
Deferred tax assets:
Share-based compensation	$	11,421		$	11,838
Deferred revenue, net of deferred costs		15,947			14,145
Accruals not currently deductible for tax purposes		21,764			21,537
Inventory		5,250			5,518
Net operating loss carryforwards		5,949			2,988
Intangible assets		6,438			4,825
Allowance for doubtful accounts		2,708			4,132
Foreign tax credit carryforwards		—			1,588
Other tax credits		—			969
Interest rate swap agreement		3,515			5,043
Other		1,571			1,176
Total gross deferred tax assets		74,563			73,759
Less: Valuation allowance		(62	)		(68	)
Deferred tax assets	$	74,501		$	73,691
Deferred tax liabilities:
Property and equipment	$	18,322		$	22,955
Other		100			1,153
Total gross deferred tax liabilities	$	18,422		$	24,108
Net deferred tax assets	$	56,079		$	49,583

Schedule of changes in unrecognized tax benefits

	June 30,
	2013			2012
	(in 000s)
Balance, beginning of year	$	12,707		$	8,364
Additions based on tax provisions related to current year		2,361			3,099
Additions for tax positions of prior years		578			1,461
Reductions for tax positions of prior years		—			(128	)
Lapse of statute of limitations		(75	)		(36	)
Foreign currency translation adjustment		7			(53	)
Balance, end of year	$	15,578		$	12,707

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SHARE-BASED COMPENSATION (Details 2) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2011
Exercises under all share-based payment arrangements
Total intrinsic value of exercises under all share-based payments arrangements	$ 35,324	$ 26,973	$ 37,915
Cash received from exercises under all share-based payments arrangements	32,472	23,225	26,314
Tax benefit realized from exercises under all share-based payments arrangements	20,447	6,390	8,718
Shares reserved for issue under the Plans
Shares issued and currently outstanding (in shares)	1,252,000
Shares available for future issuance	1,937,000
Total (in shares)	3,189,000
Stock options
Weighted average grant-date fair value per share:
Stock options granted (in dollars per share)	$ 18.07	$ 17.04	$ 16.86
Stock options vested (in dollars per share)	$ 15.55	$ 16.05	$ 11.47
Total grant-date fair value of stock options vested	4,481	6,097	6,458
Restricted stock, RSUs and PSU's
Weighted average grant-date fair value per share:
Restricted stock, PSUs and RSUs vested (in dollars per share)	$ 40.86	$ 39.34	$ 33.31
Total grant-date fair value of restricted stock, PSUs and RSUs vested	$ 8,663	$ 7,289	$ 8,962

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ACCRUED AND OTHER LIABILITIES (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Jun. 30, 2012
ACCRUED AND OTHER LIABILITIES
Payroll and related costs	$ 39,077	$ 30,212
Legal, professional and consulting costs	9,948	13,548
Customer deposits	9,430	6,154
Royalties	4,919	4,019
Regulatory approval costs	2,922	2,394
Sales, use and gaming taxes	3,957	4,322
Interest rate derivative financial instruments	4,689	4,804
Foreign currency derivative financial instrument	22	115
Accrued purchase of treasury stock		2,130
Other	16,163	17,612
Total accrued and other liabilities	$ 91,127	$ 85,310

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DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 6) (USD $)	12 Months Ended			0 Months Ended
	Jun. 30, 2013 statement	Jun. 30, 2012	Jun. 30, 2011	Jul. 02, 2012 Adoption of new accounting guidance	Jul. 02, 2011 Adoption of new accounting guidance
Depreciation and amortization expense
Depreciation and amortization expense from continuing operations	$ 88,272,000	$ 81,453,000	$ 74,980,000
Portion of depreciation and amortization expenses included in cost of gaming equipment and systems and cost of gaming operations	65,600,000	58,700,000	55,100,000
Impairment of long-lived assets and goodwill
Impairment charge related to long-lived assets	0	0	0
Impairment charges related to goodwill	0	0	0
Revenue recognition
Time-based licenses term	12 months
Period for fee recognition on hardware maintenance and product support arrangements	12 months
Period for software maintenance and product support arrangements	12 months
Advertising costs
Advertising costs incurred	10,000,000	9,300,000	9,600,000
Warranty expense
Parts and labor warranty period on gaming devices	90 days
Warranty expense	3,600,000	4,100,000	2,500,000
Indemnity costs incurred	0	0	0
Indemnity costs accrued	0	0	0
Income taxes
Percentage of likelihood of realization of recognized tax benefit	50.00%
Recently adopted accounting pronouncements
Cumulative effect adjustment to opening retained earnings					2,400,000
Number of continuous statements	1
Number of separate consecutive statements	2
Cumulative effect adjustment to opening retained earnings				$ 2,400,000

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Jun. 30, 2013	Jun. 30, 2012
CONSOLIDATED BALANCE SHEETS
Accounts and notes receivable, allowances for doubtful accounts (in dollars)	$ 14,813	$ 14,073
Long-term accounts and notes receivables, allowances for doubtful accounts (in dollars)	$ 1,764	$ 3,029
Special stock, shares authorized	10,000,000	10,000,000
Special stock, Series E, liquidation value (in dollars per share)	$ 100	$ 100
Special stock, shares issued	0	115
Special stock, shares outstanding	0	115
Common stock, par value (in dollars per share)	$ 0.10	$ 0.10
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	65,318,000	63,150,000
Common stock, shares outstanding	38,855,000	42,102,000
Treasury stock, shares	26,463,000	21,048,000

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ACCRUED AND OTHER LIABILITIES

12 Months Ended

Jun. 30, 2013

ACCRUED AND OTHER LIABILITIES

ACCRUED AND OTHER LIABILITIES

6.     ACCRUED AND OTHER LIABILITIES

	June 30,
	2013		2012
	(in 000s)
Payroll and related costs	$	39,077	$	30,212
Legal, professional and consulting costs		9,948		13,548
Customer deposits		9,430		6,154
Royalties		4,919		4,019
Regulatory approval costs		2,922		2,394
Sales, use and gaming taxes		3,957		4,322
Interest rate derivative financial instruments		4,689		4,804
Foreign currency derivative financial instrument		22		115
Accrued purchase of treasury stock		—		2,130
Other		16,163		17,612
Total accrued and other liabilities	$	91,127	$	85,310

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2011
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 139,701	$ 100,910	$ 97,808
Other comprehensive income (loss):
Foreign currency translation adjustment before income taxes	45	(3,959)	762
Foreign currency translation adjustment	45	(3,959)	762
Unrealized gain (loss) on derivative financial instruments before income taxes	4,216	(9,930)	(1,204)
Income tax (expense) benefit	(1,476)	3,476	422
Unrealized gain (loss) on derivative financial instruments	2,740	(6,454)	(782)
Total other comprehensive income (loss), net of income taxes	2,785	(10,413)	(20)
Comprehensive income	142,486	90,497	97,788
Less: comprehensive loss attributable to noncontrolling interests	(1,743)	(238)	(455)
Comprehensive income attributable to Bally Technologies, Inc.	$ 144,229	$ 90,735	$ 98,243

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STOCKHOLDERS' EQUITY, OPTIONS, WARRANTS AND RIGHTS (Details) (USD $)	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2011
Warrants
Number of warrants previously issued (in shares)	100,000
Exercise price of warrants (in dollars per share)	$ 24.69
Exercisable period of warrants	7 years
Warrants exercised (in shares)		125
Shares issued upon exercise of warrants		125

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Jun. 30, 2012
Current assets:
Cash and cash equivalents	$ 63,220	$ 32,673
Restricted cash	12,939	13,645
Accounts and notes receivable, net of allowances for doubtful accounts of $14,813 and $14,073	248,497	264,842
Inventories	68,407	75,066
Prepaid and refundable income tax	21,845	13,755
Deferred income tax assets	38,305	42,822
Deferred cost of revenue	22,417	17,615
Prepaid assets	14,527	13,061
Other current assets	2,920	6,980
Total current assets	493,077	480,459
Restricted long-term investments	14,786	12,171
Long-term accounts and notes receivables, net of allowances for doubtful accounts of $1,764 and $3,029	65,456	55,786
Property, plant and equipment, net	35,097	30,667
Leased gaming equipment, net	113,751	121,151
Goodwill	172,162	171,971
Intangible assets, net	25,076	39,166
Deferred income tax assets	17,944	7,409
Income tax receivable	1,837	12,041
Deferred cost of revenue	12,105	16,542
Other assets, net	27,974	23,104
Total assets	979,265	970,467
Current liabilities:
Accounts payable	25,863	41,414
Accrued and other liabilities	91,127	85,310
Jackpot liabilities	11,731	11,682
Deferred revenue	62,254	46,314
Income tax payable	11,345	12,226
Current maturities of long-term debt	24,615	17,091
Total current liabilities	226,935	214,037
Long-term debt, net of current maturities	580,000	494,375
Deferred revenue	23,696	26,715
Other income tax liability	12,658	13,922
Other liabilities	16,804	23,943
Total liabilities	860,093	772,992
Stockholders' equity:
Special stock, 10,000,000 shares authorized: Series E, $100 liquidation value; 0 and 115 shares issued and outstanding		12
Common stock, $.10 par value; 100,000,000 shares authorized; 65,318,000 and 63,150,000 shares issued and 38,855,000 and 42,102,000 outstanding	6,523	6,309
Treasury stock at cost, 26,463,000 and 21,048,000 shares	(1,058,381)	(790,633)
Additional paid-in capital	535,759	489,002
Accumulated other comprehensive loss	(10,692)	(13,477)
Retained earnings	646,339	504,895
Total Bally Technologies, Inc. stockholders' equity	119,548	196,108
Noncontrolling interests	(376)	1,367
Total stockholders' equity	119,172	197,475
Total liabilities and stockholders' equity	$ 979,265	$ 970,467

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LONG-TERM DEBT (Details) (USD $)					12 Months Ended								0 Months Ended			0 Months Ended	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013 Term loan facility	Jun. 30, 2012 Term loan facility	Jun. 30, 2013 Term loan facility Quarterly principal reduction through March 2014	Jun. 30, 2013 Term loan facility Quarterly principal reduction from June 2014 through March 2016	Jun. 30, 2013 Term loan facility Quarterly principal reduction from June 2016 through April 2018	Jun. 30, 2013 Term loan facility Principal reduction April 2018	Jun. 30, 2013 Revolving credit facility	Jun. 30, 2012 Revolving credit facility	Jun. 30, 2013 Other, generally unsecured	Jun. 30, 2012 Other, generally unsecured	Apr. 15, 2011 2011 Credit Agreement Senior Secured Credit Facility	Apr. 15, 2011 2011 Credit Agreement Term loan facility	Apr. 15, 2011 2011 Credit Agreement Revolving credit facility	Apr. 19, 2013 2013 Credit Agreement Senior Secured Credit Facility	Jun. 30, 2013 2013 Credit Agreement Senior Secured Credit Facility	Jun. 30, 2013 2013 Credit Agreement Senior Secured Credit Facility Minimum	Jun. 30, 2013 2013 Credit Agreement Senior Secured Credit Facility Maximum	Apr. 19, 2013 2013 Credit Agreement Term loan facility	Apr. 19, 2013 2013 Credit Agreement Revolving credit facility
Components of long-term debt
Long-term debt	$ 604,615,000	$ 511,466,000	$ 364,375,000	$ 281,250,000					$ 240,000,000	$ 230,000,000	$ 240,000	$ 216,000
Less current maturities	(24,615,000)	(17,091,000)
Long-term debt, net of current maturities	580,000,000	494,375,000
Total undrawn revolver capacity									460,000,000	170,000,000
Maximum borrowing capacity													700,000,000	300,000,000	400,000,000	1,070,000,000				370,000,000	700,000,000
Term of facility													5 years			5 years
Sublimit under the revolving credit facility related to standby letters of credit															50,000,000
Sublimit under the revolving credit facility related to swingline loans															10,000,000
Sublimit under the revolving credit facility related to multicurrency borrowings															150,000,000
Variable rate basis																	LIBOR
Debt, margin on LIBOR rate (as a percent)																		1.00%	2.00%
Effective interest rate after giving effect to the floating-to-fixed interest rate swaps (as a percent)			3.59%	3.58%					1.45%	1.75%
Principal reduction amount					$ 5,625,000	$ 7,500,000	$ 5,000,000	$ 247,500,000

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ACCOUNTS AND NOTES RECEIVABLE AND ALLOWANCES FOR DOUBTFUL ACCOUNTS (Tables)

12 Months Ended

Jun. 30, 2013

ACCOUNTS AND NOTES RECEIVABLE AND ALLOWANCES FOR DOUBTFUL ACCOUNTS

Schedule of accounts and notes receivable

	Accounts and Notes Receivable as of June 30, 2013
							Accounts and Notes Receivable as of June 30, 2012
			Ending Balance Individually Evaluated for Impairment
	Ending Balance				Ending Balance Collectively Evaluated for Impairment		Ending Balance		Ending Balance Individually Evaluated for Impairment		Ending Balance Collectively Evaluated for Impairment
	(in 000s)
Contract term less than one year:
Trade and other receivables, current	$	170,598	$	1,589	$	169,009	$	173,889	$	3,655	$	170,234
Contract term greater than one year:
Trade receivables, current		82,600		63,193		19,407		85,075		41,213		43,862
Trade receivables, noncurrent		40,178		17,961		22,217		30,476		7,213		23,263
		122,778		81,154		41,624		115,551		48,426		67,125
Lease receivables, current		6,701		6,701		—		14,763		14,763		—
Lease receivables, noncurrent		9,928		9,928		—		15,070		15,070		—
		16,629		16,629		—		29,833		29,833		—
Notes receivable, current		3,411		3,411		—		5,188		5,188		—
Notes receivable, noncurrent		17,114		17,114		—		13,269		13,269		—
		20,525		20,525		—		18,457		18,457		—
Total current		263,310		74,894		188,416		278,915		64,819		214,096
Total noncurrent		67,220		45,003		22,217		58,815		35,552		23,263
Total	$	330,530	$	119,897	$	210,633	$	337,730	$	100,371	$	237,359

Schedule of the allowance for doubtful accounts on accounts and notes receivable

	Allowance for Doubtful Accounts
	Beginning Balance as of June 30, 2012			Charge- offs		Recoveries		Provision			Ending Balance as of June 30, 2013			Ending Balance Individually Evaluated for Impairment			Ending Balance Collectively Evaluated for Impairment
	(in 000s)
Contract term less than one year:
Trade and other receivables, current	$	(6,138	)	$	1,449	$	—	$	184		$	(4,505	)	$	(1,445	)	$	(3,060	)
Contract term greater than one year:
Trade receivables, current		(7,935	)		3,973		822		(7,168	)		(10,308	)		(8,101	)		(2,207	)
Trade receivables, noncurrent		(1,279	)		2,598		—		(3,083	)		(1,764	)		—			(1,764	)
		(9,214	)		6,571		822		(10,251	)		(12,072	)		(8,101	)		(3,971	)
Lease receivables, current		—			—		—		—			—			—			—
Lease receivables, noncurrent		—			—		—		—			—			—			—
		—			—		—		—			—			—			—
Notes receivable, current		—			—		—		—			—			—			—
Notes receivable, noncurrent		(1,750	)		2,856		—		(1,106	)		—			—			—
		(1,750	)		2,856		—		(1,106	)		—			—			—
Total current		(14,073	)		5,422		822		(6,984	)		(14,813	)		(9,546	)		(5,267	)
Total noncurrent		(3,029	)		5,454		—		(4,189	)		(1,764	)		—			(1,764	)
Total	$	(17,102	)	$	10,876	$	822	$	(11,173	)	$	(16,577	)	$	(9,546	)	$	(7,031	)

	Allowance for Doubtful Accounts
	Beginning Balance as of June 30, 2011			Charge- offs		Recoveries		Provision			Ending Balance as of June 30, 2012			Ending Balance Individually Evaluated for Impairment			Ending Balance Collectively Evaluated for Impairment
	(in 000s)
Contract term less than one year:
Trade and other receivables, current	$	(5,875	)	$	1,550	$	243	$	(2,056	)	$	(6,138	)	$	(2,163	)	$	(3,975	)
Contract term greater than one year:
Trade receivables, current		(5,184	)		355		513		(3,619	)		(7,935	)		(4,867	)		(3,068	)
Trade receivables, noncurrent		(507	)		1,666		—		(2,438	)		(1,279	)		(118	)		(1,161	)
		(5,691	)		2,021		513		(6,057	)		(9,214	)		(4,985	)		(4,229	)
Lease receivables, current		—			—		—		—			—			—			—
Lease receivables, noncurrent		—			—		—		—			—			—			—
		—			—		—		—			—			—			—
Notes receivable, current		—			—		—		—			—			—			—
Notes receivable, noncurrent		—			—		—		(1,750	)		(1,750	)		(1,750	)		—
		—			—		—		(1,750	)		(1,750	)		(1,750	)		—
Total current		(11,059	)		1,905		756		(5,675	)		(14,073	)		(7,030	)		(7,043	)
Total noncurrent		(507	)		1,666		—		(4,188	)		(3,029	)		(1,868	)		(1,161	)
Total	$	(11,566	)	$	3,571	$	756	$	(9,863	)	$	(17,102	)	$	(8,898	)	$	(8,204	)

Schedule of aging of past due accounts receivables

The following summarizes the aging of past due receivables, excluding trade accounts receivable with a contract term less than one year, as of June 30, 2013:

	1 to 90 Days Past Due		91 to 180 Days Past Due		181 + Days Past Due		Total Past Due		Current		Total Receivable		Recorded Investment in Receivables on Nonaccrual Status		Recorded Investment 90 Days and Accruing
	(in 000s)
Trade receivables	$	9,636	$	2,851	$	6,869	$	19,356	$	103,422	$	122,778	$	19,356	$	—
Lease receivables		—		—		—		—		16,629		16,629		—		—
Notes receivable		—		—		—		—		20,525		20,525		—		—
Total	$	9,636	$	2,851	$	6,869	$	19,356	$	140,576	$	159,932	$	19,356	$	—

The following summarizes the aging of past due receivables, excluding trade accounts receivable with a contract term less than one year, as of June 30, 2012:

	1 to 90 Days Past Due		91 to 180 Days Past Due		181 + Days Past Due		Total Past Due		Current		Total Receivable		Recorded Investment in Receivables on Nonaccrual Status		Recorded Investment 90 Days and Accruing
	(in 000s)
Trade receivables	$	7,278	$	4,197	$	8,735	$	20,210	$	95,341	$	115,551	$	20,210	$	—
Lease receivables		—		—		—		—		29,833		29,833		—		—
Notes receivable		1,427		1,423		319		3,169		15,288		18,457		18,457		—
Total	$	8,705	$	5,620	$	9,054	$	23,379	$	140,462	$	163,841	$	38,667	$	—

Impaired Loans

The impaired loan balance as of June 30, 2012 was as follows:

	Recorded Investment		Unpaid Principal Balance		Related Allowance			Average Recorded Investment		Interest Income Recognized
	(in 000s)
With an allowance recorded:
Notes receivable	$	2,856	$	2,856	$	(1,750	)	$	2,856	$	—
With no related allowance recorded:
Notes receivable		—		—		—			—		—
Total	$	2,856	$	2,856	$	(1,750	)	$	2,856	$	—

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SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

12 Months Ended

Jun. 30, 2013

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

15.   SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

	Fiscal Year 2013 Quarterly Results
	September 30,			December 31,			March 31,			June 30,
	(in 000s, except per share data)
Statement of Operations Data:
Revenues	$	235,151		$	238,339		$	259,147		$	264,402
Cost of revenues		86,347			81,540			91,411			91,695
Selling, general and administrative		64,516			67,852			72,218			72,099
Research and development costs		25,095			26,599			29,098			30,326
Income from operations before income taxes		49,373			52,467			55,933			58,502
Income tax expense		(18,429	)		(19,389	)		(17,527	)		(21,229	)
Income from operations		30,944			33,078			38,406			37,273
Less net loss attributable to noncontrolling interests		(1,588	)		(48	)		(43	)		(64	)
Net income attributable to Bally Technologies, Inc.	$	32,532		$	33,126		$	38,449		$	37,337
Basic earnings per share attributable to Bally Technologies, Inc.:
Basic earnings per share	$	0.80		$	0.82		$	0.95		$	0.96
Diluted earnings per share attributable to Bally Technologies, Inc.:
Diluted earnings per share	$	0.77		$	0.80		$	0.93		$	0.95

	Fiscal Year 2012 Quarterly Results
	September 30,			December 31,			March 31,			June 30,
	(in 000s, except per share data)
Statement of Operations Data:
Revenues	$	194,967		$	210,457		$	228,540		$	245,795
Cost of revenues		71,333			77,931			84,063			92,989
Selling, general and administrative		57,222			61,304			63,764			72,753
Research and development costs		23,386			22,377			24,838			25,581
Income from operations before income taxes		32,262			38,972			47,627			45,598
Income tax expense		(11,853	)		(14,688	)		(17,713	)		(19,295	)
Income from operations		20,409			24,284			29,914			26,303
Less net income (loss) attributable to noncontrolling interests		17			16			(53	)		(218	)
Net income attributable to Bally Technologies, Inc.	$	20,392		$	24,268		$	29,967		$	26,521
Basic earnings per share attributable to Bally Technologies, Inc.:
Basic earnings per share	$	0.47		$	0.57		$	0.70		$	0.63
Diluted earnings per share attributable to Bally Technologies, Inc.:
Diluted earnings per share	$	0.45		$	0.54		$	0.67		$	0.61

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DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 5)	12 Months Ended
	Jun. 30, 2013
Buildings and improvements
Estimated useful life of long-lived assets
Estimated useful life	10 years
Furniture, fixtures and equipment | Minimum
Estimated useful life of long-lived assets
Estimated useful life	3 years
Furniture, fixtures and equipment | Maximum
Estimated useful life of long-lived assets
Estimated useful life	7 years
Leasehold improvements | Maximum
Estimated useful life of long-lived assets
Estimated useful life	10 years
Leased gaming equipment | Minimum
Estimated useful life of long-lived assets
Estimated useful life	1 year
Leased gaming equipment | Maximum
Estimated useful life of long-lived assets
Estimated useful life	3 years 6 months

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SHARE-BASED COMPENSATION (Details) (USD $)	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2011
Share-Based Compensation
Shares of common stock available for the grant	1,937,000
Issuance and receipt of restricted stock, ESPP shares, stock options and related tax and tax benefit	$ 45,992,000	$ 30,557,000	$ 33,998,000
Restricted stock
Restricted stock, PSU and RSU activity
Balance at the beginning of the period (in shares)	568,000
Granted (in shares)	187,000
Released (in shares)	(170,000)
Forfeited or expired (in shares)	(14,000)
Balance at the end of the period (in shares)	571,000
Weighted Average Grant Date Fair Value
Balance at the beginning of the period (in dollars per share)	$ 41.31
Granted (in dollars per share)	$ 47.07
Released (in dollars per share)	$ 40.61
Forfeited or expired (in dollars per share)	$ 39.87
Balance at the end of the period (in dollars per share)	$ 43.45
RSUs / PSUs
Restricted stock, PSU and RSU activity
Balance at the beginning of the period (in shares)	570,000
Granted (in shares)	82,000
Released (in shares)	(570,000)
Balance at the end of the period (in shares)	82,000
Weighted Average Grant Date Fair Value
Balance at the beginning of the period (in dollars per share)	$ 17.69
Granted (in dollars per share)	$ 45.65
Released (in dollars per share)	$ 17.69
Balance at the end of the period (in dollars per share)	$ 45.65
Stock options
Stock options activity
Balance at the beginning of the period (in shares)	2,545,000
Granted (in shares)	30,000
Exercised (in shares)	(1,385,000)
Forfeited or expired (in shares)	(20,000)
Balance at the end of the period (in shares)	1,170,000
Exercisable at the end of the period (in shares)	858,000
Weighted Average Exercise Price
Balance at the beginning of the period (in dollars per share)	$ 26.40
Granted (in dollars per share)	$ 46.78
Exercised (in dollars per share)	$ 24.06
Forfeited or expired (in dollars per share)	$ 31.77
Balance at the end of the period (in dollars per share)	$ 29.60
Exercisable at the end of the period (in dollars per share)	$ 26.50
Weighted Average Remaining Contractual Term
Options outstanding at the end of the period	3 years 2 months 12 days
Options exercisable at the end of the period	2 years 8 months 12 days
Aggregate Intrinsic Value
Balance at the beginning of the period	51,655,000
Balance at the end of the period	31,391,000
Exercisable at the end of the period	25,678,000
Employee Stock Purchase Plan
Share-Based Compensation
Purchase price expressed as percentage of fair market value of common stock	85.00%
Shares purchased by the employees	77,094	76,526	67,730
Approximate value of shares purchased by the employees	3,200,000	2,600,000	2,100,000
Employee Stock Purchase Plan | Maximum
Share-Based Compensation
Maximum percentage of eligible earnings that can be contributed by the eligible employee	10.00%
2010 Long-Term Incentive Plan | Restricted stock and RSUs
Share-Based Compensation
Issuance and receipt of restricted stock, ESPP shares, stock options and related tax and tax benefit	$ 10,100,000	$ 1,700,000	$ 3,200,000
2010 Long-Term Incentive Plan | Restricted stock, RSUs and PSUs
Share-Based Compensation
Factor used for reducing every share granted with awards of restricted stock, RSUs and PSUs	1.75
2010 Long-Term Incentive Plan | Restricted stock, RSUs and PSUs | Maximum
Share-Based Compensation
Number of shares authorized for issuance	15,050,000
Exercisable period, high end of range	10 years
1996 Long-Term Incentive Plan
Share-Based Compensation
Shares of common stock available for the grant	0
1996 Long-Term Incentive Plan | Maximum
Share-Based Compensation
Number of shares authorized for issuance	3,428,000
Exercisable period, high end of range	10 years

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401(k) PLAN (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2011
401(k) PLAN
Maximum percentage of compensation the plan participants may defer	25.00%
Percentage of employer contribution of first 6 percent of eligible compensation deferred by employee	50.00%
Maximum percentage eligible compensation, 50% matched	6.00%
Matching contributions made by the employer	$ 2.4	$ 2.2	$ 1.9
Percentage of employer contribution vested immediately for employees hired through December 31, 2000	100.00%
Percentage of employer contribution vesting annually for employees hired on or after January 1, 2001	20.00%
Vesting period of employer match, for employees hired on or after January 1, 2001	5 years
Percentage of employer contribution vesting annually for employees effective October 1, 2005	25.00%
Vesting period of employer match, effective October 1, 2005	4 years

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SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables)

12 Months Ended

Jun. 30, 2013

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

Schedule of unaudited quarterly financial information

	Fiscal Year 2013 Quarterly Results
	September 30,			December 31,			March 31,			June 30,
	(in 000s, except per share data)
Statement of Operations Data:
Revenues	$	235,151		$	238,339		$	259,147		$	264,402
Cost of revenues		86,347			81,540			91,411			91,695
Selling, general and administrative		64,516			67,852			72,218			72,099
Research and development costs		25,095			26,599			29,098			30,326
Income from operations before income taxes		49,373			52,467			55,933			58,502
Income tax expense		(18,429	)		(19,389	)		(17,527	)		(21,229	)
Income from operations		30,944			33,078			38,406			37,273
Less net loss attributable to noncontrolling interests		(1,588	)		(48	)		(43	)		(64	)
Net income attributable to Bally Technologies, Inc.	$	32,532		$	33,126		$	38,449		$	37,337
Basic earnings per share attributable to Bally Technologies, Inc.:
Basic earnings per share	$	0.80		$	0.82		$	0.95		$	0.96
Diluted earnings per share attributable to Bally Technologies, Inc.:
Diluted earnings per share	$	0.77		$	0.80		$	0.93		$	0.95

	Fiscal Year 2012 Quarterly Results
	September 30,			December 31,			March 31,			June 30,
	(in 000s, except per share data)
Statement of Operations Data:
Revenues	$	194,967		$	210,457		$	228,540		$	245,795
Cost of revenues		71,333			77,931			84,063			92,989
Selling, general and administrative		57,222			61,304			63,764			72,753
Research and development costs		23,386			22,377			24,838			25,581
Income from operations before income taxes		32,262			38,972			47,627			45,598
Income tax expense		(11,853	)		(14,688	)		(17,713	)		(19,295	)
Income from operations		20,409			24,284			29,914			26,303
Less net income (loss) attributable to noncontrolling interests		17			16			(53	)		(218	)
Net income attributable to Bally Technologies, Inc.	$	20,392		$	24,268		$	29,967		$	26,521
Basic earnings per share attributable to Bally Technologies, Inc.:
Basic earnings per share	$	0.47		$	0.57		$	0.70		$	0.63
Diluted earnings per share attributable to Bally Technologies, Inc.:
Diluted earnings per share	$	0.45		$	0.54		$	0.67		$	0.61

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SHARE-BASED COMPENSATION (Tables)

12 Months Ended

Jun. 30, 2013

SHARE-BASED COMPENSATION

Schedule of stock option activity

				Weighted Average
	Shares			Exercise Price		Remaining Contractual Term		Aggregate Intrinsic Value
	(in 000s)			(per share)		(years)		(in 000s)
Balance outstanding as of June 30, 2012		2,545		$	26.40			$	51,655
Granted		30			46.78
Exercised		(1,385	)		24.06
Forfeited or expired		(20	)		31.77
Balance outstanding as of June 30, 2013		1,170		$	29.60		3.20	$	31,391
Exercisable as of June 30, 2013		858		$	26.50		2.70	$	25,678

Schedule of restricted stock, PSU and RSU activity

	Restricted Stock			Weighted Average Grant Date Fair Value		RSUs / PSUs			Weighted Average Grant Date Fair Value
	(in 000s)			(per share)		(in 000s)			(per share)
Balance outstanding as of June 30, 2012		568		$	41.31		570		$	17.69
Granted		187			47.07		82			45.65
Released		(170	)		40.61		(570	)		17.69
Forfeited or expired		(14	)		39.87		—			—
Balance outstanding as of June 30, 2013		571		$	43.45		82			45.65

Schedule of additional information about stock options, restricted stock, PSUs and RSUs exercised, granted and vested during the periods

	Year Ended June 30,
	2013		2012		2011
	(in 000s, except per share amounts)
Weighted average grant-date fair value per share:
Stock options granted	$	18.07	$	17.04	$	16.86
Stock options vested	$	15.55	$	16.05	$	11.47
Restricted stock, PSUs and RSUs vested	$	40.86	$	39.34	$	33.31
Total grant-date fair value of stock options vested	$	4,481	$	6,097	$	6,458
Total grant-date fair value of restricted stock, PSUs and RSUs vested	$	8,663	$	7,289	$	8,962
Exercises under all share-based payment arrangements:
Total intrinsic value	$	35,324	$	26,973	$	37,915
Cash received	$	32,472	$	23,225	$	26,314
Tax benefit realized	$	20,447	$	6,390	$	8,718

Schedule of shares which are reserved for issue under the Plans

	(in 000s)
Shares issued and currently outstanding		1,252
Shares available for future issuance		1,937
Total		3,189

Schedule of share-based compensation expense and related effect of the income tax benefit

	Year Ended June 30,
	2013			2012			2011
	(in 000s)
Selling, general and administrative	$	8,841		$	9,996		$	9,624
Research and development		4,500			3,956			3,104
Cost of gaming equipment and systems and operations		39			220			179
Share-based compensation expense before tax	$	13,380		$	14,172		$	12,907
Income tax benefit		(4,683	)		(4,960	)		(4,517	)
Net share-based compensation expense	$	8,697		$	9,212		$	8,390

Summary of assumptions to determine the fair value of each option granted

	Year Ended June 30,
	2013			2012			2011
Weighted Average:
Expected option term (in years)		4.17			4.36			4.61
Expected volatility		48.30	%		56.90	%		54.91	%
Risk-free interest rate		0.63	%		0.89	%		1.76	%
Expected annual dividend yield		0	%		0	%		0	%

XML

STOCKHOLDERS' EQUITY, OPTIONS, WARRANTS AND RIGHTS (Tables)

12 Months Ended

Jun. 30, 2013

STOCKHOLDERS' EQUITY, OPTIONS, WARRANTS AND RIGHTS

Schedule of purchases made under repurchase plans

	Shares		Average price per share		Amount (in 000s)
Year Ended June 30,
2011		11,957,208	$	39.65		474,054
2012		3,860,778	$	40.06		154,645
2013		5,197,431	$	53.90		280,148
Total		21,015,417	$	43.25	$	908,847

XML

GOODWILL AND INTANGIBLE ASSETS

12 Months Ended

Jun. 30, 2013

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS

5.     GOODWILL AND INTANGIBLE ASSETS

		June 30, 2013							June 30, 2012
	Useful Life (Years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	(dollars in 000s)
Computer software	3 - 5	$	39,484	$	(35,796	)	$	3,688	$	39,633	$	(34,442	)	$	5,191
License rights	3 - 13		12,819		(7,215	)		5,604		8,440		(4,251	)		4,189
Trademarks	5 - 10		2,430		(2,239	)		191		2,430		(2,216	)		214
Core technology	5 - 14		27,063		(21,887	)		5,176		27,063		(17,935	)		9,128
Contract rights	2 - 10		10,943		(9,766	)		1,177		15,496		(8,522	)		6,974
Other intangibles	3 - 5		2,548		(808	)		1,740		6,574		(604	)		5,970
Total finite-lived intangible assets		$	95,287	$	(77,711	)	$	17,576	$	99,636	$	(67,970	)	$	31,666
Trademark	indefinite		7,500		—			7,500		7,500		—			7,500
Total		$	102,787	$	(77,711	)	$	25,076	$	107,136	$	(67,970	)	$	39,166

Total amortization expense related to finite-lived intangible assets totaled $10.9 million, $9.8 million and $9.3 million for the years ended June 30, 2013, 2012 and 2011, respectively, which included computer software amortization expense of $2.1 million, $2.3 million and $3.3 million, respectively.

During the year ended June 30, 2013, contract rights of approximately $4.6 million associated with HBG were derecognized in conjunction with the settlement agreement (see Note 12 to consolidated financial statements, Commitments and Contingencies).

During the year ended June 30, 2012, the Company acquired substantially all the assets and liabilities of MacroView Labs and Chiligaming LTD for approximately $8.8 million and $7.1 million, respectively. As part of the transactions, the Company recognized $4.3 million in core technology, $0.9 million in contract rights, and $10.7 million in goodwill. The Company has not presented pro forma information for the acquisitions as the impact was insignificant both individually, and in the aggregate, to the Company's most recent consolidated financial statements.

The Company's indefinite-lived intangible asset of approximately $7.5 million was for one-time consideration given for a perpetual, world-wide license for the use of the Bally trademark in connection with the Company's business.

Future amortization of finite-lived intangible assets is scheduled as follows:

Year Ended June 30,	(in 000s)
2014	$	8,283
2015		4,495
2016		2,648
2017		858
2018		248
Thereafter		1,044
Total	$	17,576

All goodwill is associated with continuing operations. The changes in the carrying amount of goodwill for the years ended June 30, 2013 and 2012 are as follows:

	(in 000s)
Balance as of June 30, 2011	$	162,110
Additions		10,656
Foreign currency translation adjustment		(795	)
Balance as of June 30, 2012		171,971
Foreign currency translation adjustment		191
Balance as of June 30, 2013	$	172,162

XML

COMMITMENTS AND CONTINGENCIES (Details) In Millions, unless otherwise specified	12 Months Ended			0 Months Ended	12 Months Ended		1 Months Ended
	Jun. 30, 2013 USD ($)	Jun. 30, 2012 USD ($)	Jun. 30, 2011 USD ($)	Jul. 29, 2013 Breach of contract EUR (€)	Jun. 30, 2013 Breach of contract	Feb. 29, 2012 Breach of contract EUR (€)	Oct. 31, 2011 Patent infringement lawsuit filed by International Game Technology ("IGT") against the Company item	Apr. 30, 2009 Patent infringement lawsuit filed by International Game Technology ("IGT") against the Company item	Oct. 31, 2008 Patent infringement lawsuit filed by International Game Technology ("IGT") against the Company item	Oct. 31, 2010 WMS Gaming Inc. item
COMMITMENTS AND CONTINGENCIES
Royalty expense	$ 21.6	$ 20.8	$ 11.5
Litigation
Financial assistance provided by the company						15
Settlement amount to be received in monthly installments				15
Period of repayment of monthly installment payments of new note receivable by HBG	P4Y				P4Y
Number of products in infringement of patent claims								2
Number of products undergoing technical changes by the entity							2
Number of patents of plaintiff declared invalid by the court									2
Number of patents against which lawsuit is filed										2
Number of additional patents against which lawsuit is filed										3
Aggregate accrued liabilities, current	$ 6.7

XML

PROPERTY, PLANT AND EQUIPMENT AND LEASED GAMING EQUIPMENT (Tables)

12 Months Ended

Jun. 30, 2013

PROPERTY, PLANT AND EQUIPMENT AND LEASED GAMING EQUIPMENT

Schedule of property, plant and equipment and leased gaming equipment

	June 30,
	2013			2012
	(in 000s)
Land and land improvements	$	1,975		$	1,975
Buildings and leasehold improvements		29,582			25,908
Gaming equipment		30,552			29,293
Furniture, fixtures and equipment		33,544			32,314
Less accumulated depreciation		(60,556	)		(58,823	)
Property, plant and equipment, net	$	35,097		$	30,667
Leased gaming equipment	$	323,431		$	306,997
Less accumulated depreciation		(209,680	)		(185,846	)
Leased gaming equipment, net	$	113,751		$	121,151

XML

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2011
Fair value of derivative assets and liabilities
Liability: Interest rate derivative financial instruments	$ 9,616
Accounting for Derivative Instruments and Hedging Activity
Interest rate swap agreement, Amount of Loss Reclassified From Accumulated OCI into Income (Effective Portion)	(921)	(14,969)	(3,661)
Interest rate swap agreement, Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	(5,137)	(5,039)	(2,458)
Interest rate swap agreement, Amount of Loss Recognized in Income on Derivative (Ineffective Portion)	(9)
Foreign Currency Forward Contract, Amount of Income (Loss) Recognized in Other Income (Expense)	(1,151)	4,246	(135)
Restricted cash
Jackpot funds	12,900	13,600
Accrued and other liabilities
Fair value of derivative assets and liabilities
Liability: Interest rate derivative financial instruments	4,689
Other liabilities
Fair value of derivative assets and liabilities
Liability: Interest rate derivative financial instruments	4,927
Recurring basis | Level 2 | Other current assets
Fair value of derivative assets and liabilities
Asset: Foreign currency derivative financial instrument	397	2,850
Recurring basis | Level 2 | Accrued and other liabilities
Fair value of derivative assets and liabilities
Liability: Foreign currency derivative financial instrument	22	115
Liability: Interest rate derivative financial instruments	4,689	4,804
Recurring basis | Level 2 | Other liabilities
Fair value of derivative assets and liabilities
Liability: Interest rate derivative financial instruments	$ 4,927	$ 9,028

XML

LEASES

12 Months Ended

Jun. 30, 2013

LEASES

LEASES

8.     LEASES

The Company leases certain office space, equipment, autos, and warehouse facilities and other property locations under noncancelable operating leases which are generally included in selling, general and administrative expenses. Operating rental expense is as follows:

	Year Ended June 30,
	2013		2012			2011
	(in 000s)
Equipment, auto and office space leases	$	11,220	$	9,273		$	9,060
Sublease rental income		—		(317	)		(357	)
	$	11,220	$	8,956		$	8,703

Future minimum rental payments required under noncancelable operating leases are as follows:

Year Ended June 30,	Operating
2014	$	8,872
2015		6,594
2016		5,152
2017		3,059
2018		1,192
Thereafter		521
Total minimum payments	$	25,390

XML

PROPERTY, PLANT AND EQUIPMENT AND LEASED GAMING EQUIPMENT

12 Months Ended

Jun. 30, 2013

PROPERTY, PLANT AND EQUIPMENT AND LEASED GAMING EQUIPMENT

PROPERTY, PLANT AND EQUIPMENT AND LEASED GAMING EQUIPMENT

4.     PROPERTY, PLANT AND EQUIPMENT AND LEASED GAMING EQUIPMENT

	June 30,
	2013			2012
	(in 000s)
Land and land improvements	$	1,975		$	1,975
Buildings and leasehold improvements		29,582			25,908
Gaming equipment		30,552			29,293
Furniture, fixtures and equipment		33,544			32,314
Less accumulated depreciation		(60,556	)		(58,823	)
Property, plant and equipment, net	$	35,097		$	30,667
Leased gaming equipment	$	323,431		$	306,997
Less accumulated depreciation		(209,680	)		(185,846	)
Leased gaming equipment, net	$	113,751		$	121,151

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2011
Cash flows from operating activities:
Net income	$ 139,701	$ 100,910	$ 97,808
Adjustments to reconcile net income to net cash provided by operating activities:
Loss on sale of discontinued operations, net of tax			403
Loss on extinguishment of debt			4,119
Depreciation and amortization	88,272	81,453	74,980
Amortization of deferred debt issuance costs	1,810	1,807	3,404
Share-based compensation	13,380	14,172	12,907
Provision for doubtful accounts	11,173	9,863	7,963
Inventory write-downs	6,130	5,902	3,623
Income tax (benefit) expense	(6,723)	(5,986)	18,811
Excess tax benefit of stock option exercises	(18,899)	(5,523)	(8,214)
Other	2,333	3,949	(1,320)
Change in operating assets and liabilities:
Accounts and notes receivable	1,084	(35,934)	(46,647)
Inventories	(54,832)	(98,432)	(101,797)
Prepaid and refundable income tax and income tax payable	19,240	40,802	(24,849)
Other current assets	(83)	(7,111)	(557)
Accounts payable	(15,484)	(2,693)	14,615
Accrued and jackpot liabilities	5,374	15,376	3,393
Deferred revenue and deferred cost of revenue	12,896	12,428	(1,886)
Net cash provided by operating activities	205,372	130,983	56,756
Cash flows from investing activities:
Acquisitions		(10,490)
Capital expenditures	(16,802)	(11,464)	(13,202)
Restricted cash and investments	(1,909)	(4,913)	474
Development financing provided to customers	(1,228)		(9,940)
Payments received from development financing	223
Additions to other long-term assets	(1,932)	(8,331)	(6,552)
Net cash used in investing activities	(21,648)	(35,198)	(29,220)
Cash flows from financing activities:
Proceeds from borrowing	100,000		300,000
Proceeds from revolving credit facility	100,000	41,000	250,884
Payments on revolving credit facility	(90,000)	(30,000)	(31,884)
Capitalized debt issuance costs	(4,909)		(7,118)
Pay-off of debt from refinancing			(142,500)
Payments on long-term debt and capital leases	(16,964)	(15,040)	(35,049)
Acquisition-related contingent consideration	(1,351)
Distributions to noncontrolling interests		(82)	(239)
Purchase of treasury stock and forward contract	(292,378)	(154,235)	(477,215)
Purchase of series E special stock	(12)
Excess tax benefit of stock option exercises	18,899	5,523	8,214
Proceeds from exercise of stock options and employee stock purchases	35,642	25,888	28,441
Net cash used in financing activities	(151,073)	(126,946)	(106,466)
Effect of exchange rate changes on cash	(2,104)	(2,591)	669
Net cash used in operating activities of discontinued operations			(403)
Cash and cash equivalents:
Increase (decrease) for year	30,547	(33,752)	(78,664)
Balance, beginning of year	32,673	66,425	145,089
Balance, end of year	$ 63,220	$ 32,673	$ 66,425

XML

LONG-TERM DEBT (Details 2) (USD $)	12 Months Ended						12 Months Ended
	Jun. 30, 2013	Jun. 30, 2013 Accrued and other liabilities	Jun. 30, 2013 Other liabilities	Jun. 30, 2013 Interest rate swap Cash flow hedging	Jun. 30, 2012 Interest rate swap Cash flow hedging	Jun. 30, 2013 Interest rate swap agreement maturing on September 26, 2012 Cash flow hedging	Jun. 30, 2013 Interest rate swap agreement maturing on May 13, 2016	Jun. 30, 2013 Interest rate swap agreement maturing on May 13, 2016 Cash flow hedging
Interest rate swap agreement
Notional amount of interest rate swap				$ 264,400,000	$ 281,300,000	$ 218,800,000		$ 165,000,000
Variable interest rate description before hedging of debt							LIBOR
Effective interest rate for hedged variable rate debt (as a percent)							2.09%
Amounts expected to be reclassified from other comprehensive income to interest expense	4,700,000
Fair value of interest rate swap liability	9,616,000	4,689,000	4,927,000
Annual principal maturities of the Company's long-term debt
2014	24,615,000
2015	30,000,000
2016	27,500,000
2017	20,000,000
2018	502,500,000
Total	$ 604,615,000

XML

ACCOUNTS AND NOTES RECEIVABLE AND ALLOWANCES FOR DOUBTFUL ACCOUNTS (Details) (USD $)	12 Months Ended
	Jun. 30, 2013 segment classofreceivable	Jun. 30, 2012
Accounts and notes receivable, allowance for doubtful accounts and credit quality of financing receivables
Number of portfolio segments	1
Number of classes of receivables	4
Accounts and Notes Receivable
Ending Balance	$ 330,530,000	$ 337,730,000
Ending Balance Individually Evaluated for Impairment	119,897,000	100,371,000
Ending Balance Collectively Evaluated for Impairment	210,633,000	237,359,000
Allowance for Doubtful Accounts
Balance at the beginning of the period	(17,102,000)	(11,566,000)
Charge-offs	10,876,000	3,571,000
Recoveries	822,000	756,000
Provision	(11,173,000)	(9,863,000)
Balance at the end of the period	(16,577,000)	(17,102,000)
Ending Balance Individually Evaluated for Impairment	(9,546,000)	(8,898,000)
Ending Balance Collectively Evaluated for Impairment	(7,031,000)	(8,204,000)
Summarizes the aging of past due receivables
Development Financing loans made to HBG Connex S.P.A, net of discount	19,500,000	15,600,000
Discount amount on Development Financing loans made to HBG Connex S.P.A		3,300,000
State interest rate of note receivable (as a percent)	4.00%
Period of repayment of monthly installment payments of new note receivable by HBG	P4Y
Discounts reversed on notes receivable	3,300,000
Impaired financing receivables
Recognized investment impairment charge		1,800,000
SG&A
Summarizes the aging of past due receivables
Derecognition of contract rights	1,300,000
Contract rights
Summarizes the aging of past due receivables
Derecognition of contract rights	4,600,000
Current
Accounts and Notes Receivable
Ending Balance	263,310,000	278,915,000
Ending Balance Individually Evaluated for Impairment	74,894,000	64,819,000
Ending Balance Collectively Evaluated for Impairment	188,416,000	214,096,000
Allowance for Doubtful Accounts
Balance at the beginning of the period	(14,073,000)	(11,059,000)
Charge-offs	5,422,000	1,905,000
Recoveries	822,000	756,000
Provision	(6,984,000)	(5,675,000)
Balance at the end of the period	(14,813,000)	(14,073,000)
Ending Balance Individually Evaluated for Impairment	(9,546,000)	(7,030,000)
Ending Balance Collectively Evaluated for Impairment	(5,267,000)	(7,043,000)
Noncurrent
Accounts and Notes Receivable
Ending Balance	67,220,000	58,815,000
Ending Balance Individually Evaluated for Impairment	45,003,000	35,552,000
Ending Balance Collectively Evaluated for Impairment	22,217,000	23,263,000
Allowance for Doubtful Accounts
Balance at the beginning of the period	(3,029,000)	(507,000)
Charge-offs	5,454,000	1,666,000
Provision	(4,189,000)	(4,188,000)
Balance at the end of the period	(1,764,000)	(3,029,000)
Ending Balance Individually Evaluated for Impairment		(1,868,000)
Ending Balance Collectively Evaluated for Impairment	(1,764,000)	(1,161,000)
Contract term greater than one year
Summarizes the aging of past due receivables
1 to 90 Days Past Due	9,636,000	8,705,000
91 to 180 Days Past Due	2,851,000	5,620,000
181 + Days Past Due	6,869,000	9,054,000
Total Past Due	19,356,000	23,379,000
Current	140,576,000	140,462,000
Total Receivable	159,932,000	163,841,000
Recorded investment in Receivables on Nonaccrual Status	19,356,000	38,667,000
Trade and other receivables | Contract term less than one year | Current
Accounts and Notes Receivable
Ending Balance	170,598,000	173,889,000
Ending Balance Individually Evaluated for Impairment	1,589,000	3,655,000
Ending Balance Collectively Evaluated for Impairment	169,009,000	170,234,000
Allowance for Doubtful Accounts
Balance at the beginning of the period	(6,138,000)	(5,875,000)
Charge-offs	1,449,000	1,550,000
Recoveries		243,000
Provision	184,000	(2,056,000)
Balance at the end of the period	(4,505,000)	(6,138,000)
Ending Balance Individually Evaluated for Impairment	(1,445,000)	(2,163,000)
Ending Balance Collectively Evaluated for Impairment	(3,060,000)	(3,975,000)
Trade receivables | Contract term greater than one year
Accounts and Notes Receivable
Ending Balance	122,778,000	115,551,000
Ending Balance Individually Evaluated for Impairment	81,154,000	48,426,000
Ending Balance Collectively Evaluated for Impairment	41,624,000	67,125,000
Allowance for Doubtful Accounts
Balance at the beginning of the period	(9,214,000)	(5,691,000)
Charge-offs	6,571,000	2,021,000
Recoveries	822,000	513,000
Provision	(10,251,000)	(6,057,000)
Balance at the end of the period	(12,072,000)	(9,214,000)
Ending Balance Individually Evaluated for Impairment	(8,101,000)	(4,985,000)
Ending Balance Collectively Evaluated for Impairment	(3,971,000)	(4,229,000)
Summarizes the aging of past due receivables
1 to 90 Days Past Due	9,636,000	7,278,000
91 to 180 Days Past Due	2,851,000	4,197,000
181 + Days Past Due	6,869,000	8,735,000
Total Past Due	19,356,000	20,210,000
Current	103,422,000	95,341,000
Total Receivable	122,778,000	115,551,000
Recorded investment in Receivables on Nonaccrual Status	19,356,000	20,210,000
Trade receivables | Contract term greater than one year | Current
Accounts and Notes Receivable
Ending Balance	82,600,000	85,075,000
Ending Balance Individually Evaluated for Impairment	63,193,000	41,213,000
Ending Balance Collectively Evaluated for Impairment	19,407,000	43,862,000
Allowance for Doubtful Accounts
Balance at the beginning of the period	(7,935,000)	(5,184,000)
Charge-offs	3,973,000	355,000
Recoveries	822,000	513,000
Provision	(7,168,000)	(3,619,000)
Balance at the end of the period	(10,308,000)	(7,935,000)
Ending Balance Individually Evaluated for Impairment	(8,101,000)	(4,867,000)
Ending Balance Collectively Evaluated for Impairment	(2,207,000)	(3,068,000)
Trade receivables | Contract term greater than one year | Noncurrent
Accounts and Notes Receivable
Ending Balance	40,178,000	30,476,000
Ending Balance Individually Evaluated for Impairment	17,961,000	7,213,000
Ending Balance Collectively Evaluated for Impairment	22,217,000	23,263,000
Allowance for Doubtful Accounts
Balance at the beginning of the period	(1,279,000)	(507,000)
Charge-offs	2,598,000	1,666,000
Provision	(3,083,000)	(2,438,000)
Balance at the end of the period	(1,764,000)	(1,279,000)
Ending Balance Individually Evaluated for Impairment		(118,000)
Ending Balance Collectively Evaluated for Impairment	(1,764,000)	(1,161,000)
Notes receivable
Impaired financing receivables
Recorded Investment	0	2,856,000
Unpaid Principal Balance		2,856,000
Related Allowance		(1,750,000)
Average Recorded Investment		2,856,000
Notes receivable | With an allowance recorded:
Impaired financing receivables
Recorded Investment		2,856,000
Unpaid Principal Balance		2,856,000
Related Allowance		(1,750,000)
Average Recorded Investment		2,856,000
Recognized investment impairment charge	1,100,000
Notes receivable | Contract term greater than one year
Accounts and Notes Receivable
Ending Balance	20,525,000	18,457,000
Ending Balance Individually Evaluated for Impairment	20,525,000	18,457,000
Allowance for Doubtful Accounts
Balance at the beginning of the period	(1,750,000)
Charge-offs	2,856,000
Provision	(1,106,000)	(1,750,000)
Balance at the end of the period		(1,750,000)
Ending Balance Individually Evaluated for Impairment		(1,750,000)
Summarizes the aging of past due receivables
1 to 90 Days Past Due		1,427,000
91 to 180 Days Past Due		1,423,000
181 + Days Past Due		319,000
Total Past Due		3,169,000
Current	16,629,000	15,288,000
Total Receivable	16,629,000	18,457,000
Recorded investment in Receivables on Nonaccrual Status		18,457,000
Notes receivable | Contract term greater than one year | Current
Accounts and Notes Receivable
Ending Balance	3,411,000	5,188,000
Ending Balance Individually Evaluated for Impairment	3,411,000	5,188,000
Notes receivable | Contract term greater than one year | Noncurrent
Accounts and Notes Receivable
Ending Balance	17,114,000	13,269,000
Ending Balance Individually Evaluated for Impairment	17,114,000	13,269,000
Allowance for Doubtful Accounts
Balance at the beginning of the period	(1,750,000)
Charge-offs	2,856,000
Provision	(1,106,000)	(1,750,000)
Balance at the end of the period		(1,750,000)
Ending Balance Individually Evaluated for Impairment		(1,750,000)
Lease receivables | Contract term greater than one year
Accounts and Notes Receivable
Ending Balance	16,629,000	29,833,000
Ending Balance Individually Evaluated for Impairment	16,629,000	29,833,000
Summarizes the aging of past due receivables
Current	20,525,000	29,833,000
Total Receivable	20,525,000	29,833,000
Lease receivables | Contract term greater than one year | Current
Accounts and Notes Receivable
Ending Balance	6,701,000	14,763,000
Ending Balance Individually Evaluated for Impairment	6,701,000	14,763,000
Lease receivables | Contract term greater than one year | Noncurrent
Accounts and Notes Receivable
Ending Balance	9,928,000	15,070,000
Ending Balance Individually Evaluated for Impairment	$ 9,928,000	$ 15,070,000
Minimum
Accounts and notes receivable, allowance for doubtful accounts and credit quality of financing receivables
Contract term for sale of gaming equipment	1 year
Maximum
Accounts and notes receivable, allowance for doubtful accounts and credit quality of financing receivables
Contract term for sale of gaming equipment	1 year

XML

LONG-TERM DEBT (Tables)

12 Months Ended

Jun. 30, 2013

LONG-TERM DEBT

Schedule of long-term debt

	June 30,
	2013			2012
	(in 000s)
Revolving credit facility	$	240,000		$	230,000
Term loan facility		364,375			281,250
Other, generally unsecured		240			216
Long-term debt		604,615			511,466
Less current maturities		(24,615	)		(17,091	)
Long-term debt, net of current maturities	$	580,000		$	494,375

Schedule of additional information on the entity's interest rate swaps

Interest Rate Derivative Financial Instruments	Balance Sheet Location	Fair Value (in 000s)		Location of Offsetting Balance
Cash flow hedges—$264.4 million LIBOR based debt	Accrued and other liabilities	$	4,689
	Other liabilities		4,927
		$	9,616	Accumulated other comprehensive income (before income taxes)

Schedule of annual principal maturities of long-term debt

Year Ended June 30,	(in 000s)
2014	$	24,615
2015		30,000
2016		27,500
2017		20,000
2018		502,500
Total	$	604,615

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SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2011
Statement of Operations Data:
Revenues	$ 264,402	$ 259,147	$ 238,339	$ 235,151	$ 245,795	$ 228,540	$ 210,457	$ 194,967	$ 997,039	$ 879,759	$ 758,155
Cost of revenues	91,695	91,411	81,540	86,347	92,989	84,063	77,931	71,333
Selling, general and administrative	72,099	72,218	67,852	64,516	72,753	63,764	61,304	57,222	276,685	255,043	225,033
Research and development costs	30,326	29,098	26,599	25,095	25,581	24,838	22,377	23,386	111,118	96,182	88,086
Income from operations before income taxes	58,502	55,933	52,467	49,373	45,598	47,627	38,972	32,262	216,275	164,459	143,393
Income tax expense	(21,229)	(17,527)	(19,389)	(18,429)	(19,295)	(17,713)	(14,688)	(11,853)	(76,574)	(63,549)	(45,182)
Income from operations	37,273	38,406	33,078	30,944	26,303	29,914	24,284	20,409	139,701	100,910	97,808
Less net income (loss) attributable to noncontrolling interests	(64)	(43)	(48)	(1,588)	(218)	(53)	16	17	(1,743)	(238)	(455)
Net income attributable to Bally Technologies, Inc.	$ 37,337	$ 38,449	$ 33,126	$ 32,532	$ 26,521	$ 29,967	$ 24,268	$ 20,392	$ 141,444	$ 101,148	$ 98,263
Basic earnings per share attributable to Bally Technologies, Inc.:
Basic earnings per share (in dollars per share)	$ 0.96	$ 0.95	$ 0.82	$ 0.80	$ 0.63	$ 0.70	$ 0.57	$ 0.47	$ 3.53	$ 2.35	$ 1.89
Diluted earnings per share attributable to Bally Technologies, Inc.:
Diluted earnings per share (in dollars per share)	$ 0.95	$ 0.93	$ 0.80	$ 0.77	$ 0.61	$ 0.67	$ 0.54	$ 0.45	$ 3.45	$ 2.28	$ 1.81

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STOCKHOLDERS' EQUITY, OPTIONS, WARRANTS AND RIGHTS (Details 2) (USD $)	0 Months Ended			1 Months Ended	12 Months Ended			36 Months Ended
	Apr. 24, 2013	Oct. 24, 2012	May 02, 2012	Apr. 30, 2011	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2013
Share Repurchase Plan
Amount of common stock authorized to be repurchased by board of directors	$ 300,000,000	$ 150,000,000	$ 150,000,000	$ 550,000,000
Maximum amount of common stock authorized to be repurchased by board of directors for modified Dutch auction tender offer (in shares)				400,000,000
Shares of common stock repurchased under the accelerated share repurchase agreement	2,300,000			9,900,000	5,197,431	3,860,778	11,957,208	21,015,417
Average repurchase price per share (in dollars per share)	$ 54.27			$ 40.18	$ 53.90	$ 40.06	$ 39.65	$ 43.25
Aggregate cost of repurchase under share purchase plan	127,500,000			398,300,000	280,149,000	154,645,000	474,054,000	908,847,000
Amount paid for the repurchase of shares of common stock under the accelerated share repurchase agreement	150,000,000				292,378,000	154,235,000	477,215,000
Percentage value of shares of common stock repurchased under the accelerated share repurchase agreement	85.00%
Remaining percentage value of shares of common stock to be repurchased under the accelerated share repurchase agreement	15.00%
Remaining authorized amount available under the plan for repurchase in future periods					149,800,000
Additional Paid-In Capital
Share Repurchase Plan
Forward contract included in additional-paid-in-capital	$ (22,500,000)				$ (22,500,000)

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INCOME TAXES

12 Months Ended

Jun. 30, 2013

INCOME TAXES

INCOME TAXES

11.   INCOME TAXES

Consolidated income from continuing operations before taxes and noncontrolling interest for domestic and foreign operations is as follows:

	Year Ended June 30,
	2013			2012		2011
	(in 000s)
United States	$	220,439		$	161,043	$	131,668
Foreign		(4,164	)		3,416		11,725
Total	$	216,275		$	164,459	$	143,393

The components of the Company's income tax expense from continuing operations are as follows:

	Year Ended June 30,
	2013			2012			2011
	(in 000s)
Current:
Federal	$	73,441		$	61,115		$	12,614
State		8,623			9,085			5,585
Foreign		4,299			2,902			3,245
		86,363			73,102			21,444
Deferred:
Federal		(5,346	)		(7,169	)		23,984
State		(509	)		(1,383	)		(919	)
Foreign		(3,934	)		(1,001	)		673
		(9,789	)		(9,553	)		23,738
Income tax expense	$	76,574		$	63,549		$	45,182

The difference between the U.S. statutory federal income tax rate and the Company's effective income tax rate is as follows:

	Year Ended June 30,
	2013			2012			2011
U.S. federal statutory income tax rate		35.0	%		35.0	%		35.0	%
Change in income tax contingencies		1.4			2.1			(2.5	)
State income taxes, net of federal benefit		2.6			2.8			2.0
Foreign earnings subject to U.S. tax		(0.3	)		(0.3	)		2.9
Change in valuation allowance		—			(0.6	)		(0.2	)
Tax credits		(2.5	)		(1.2	)		(4.7	)
Domestic production activities deduction		(2.7	)		(2.7	)		(1.5	)
Foreign losses-no future benefit		0.9			2.0			—
Other, net		1.0			1.5			0.5
		35.4	%		38.6	%		31.5	%

The major components of the deferred tax assets and liabilities from continuing operations are as follows:

	June 30,
	2013			2012
	(in 000s)
Deferred tax assets:
Share-based compensation	$	11,421		$	11,838
Deferred revenue, net of deferred costs		15,947			14,145
Accruals not currently deductible for tax purposes		21,764			21,537
Inventory		5,250			5,518
Net operating loss carryforwards		5,949			2,988
Intangible assets		6,438			4,825
Allowance for doubtful accounts		2,708			4,132
Foreign tax credit carryforwards		—			1,588
Other tax credits		—			969
Interest rate swap agreement		3,515			5,043
Other		1,571			1,176
Total gross deferred tax assets		74,563			73,759
Less: Valuation allowance		(62	)		(68	)
Deferred tax assets	$	74,501		$	73,691
Deferred tax liabilities:
Property and equipment	$	18,322		$	22,955
Other		100			1,153
Total gross deferred tax liabilities	$	18,422		$	24,108
Net deferred tax assets	$	56,079		$	49,583

Current deferred income tax liabilities of $-0- and $21,000 of as of June 30, 2013 and 2012, respectively, are included in accrued and other liabilities, and noncurrent deferred income tax liabilities of $170,000 and $627,000 as of June 30, 2013 and 2012, respectively, are included in other liabilities in the accompanying Consolidated Balance Sheets.

The Company has not provided income taxes on approximately $15.2 million and $12.1 million of undistributed earnings as of June 30, 2013 and 2012, respectively, from certain foreign subsidiaries. The Company plans to permanently invest the earnings in the foreign subsidiaries and therefore has not recorded a deferred tax liability associated with the undistributed earnings. A determination of the potential deferred tax liability which would result from these earnings is not practicable at this time.

At June 30, 2013, the Company had net operating loss carryforwards for U.S. federal income tax purposes of approximately $4.5 million. The entire amount of the net operating loss carryforwards are subject to limitations under Section 382 of the Internal Revenue Code. Section 382 limits the amount of carryforwards available per year for use against future taxable income. Based on the Company's recent history of taxable income and projections of taxable income in the future, the Company expects to utilize all of its federal net operating loss carryforwards. The Company also has net operating losses in several foreign jurisdictions totaling approximately $16.7 million. Based on the Company's recent history of taxable income and projections of taxable income in the future, the Company expects to utilize all of its foreign net operating loss carryforwards and, therefore, no valuation allowance has been established for these losses.

The Company's subsidiary in India operated under a tax holiday that expired in March 2011.

The Company recorded $20.4 million and $6.4 million as an increase to stockholder's equity for certain tax benefits from employee share-based compensation for the years ended June 30, 2013 and 2012, respectively.

The Company had $15.6 million and $12.7 million of liabilities for unrecognized tax benefits as of June 30, 2013 and 2012, respectively. Of these amounts, $15.5 million and $12.7 million, respectively, if recognized, would impact the Company's effective tax rate. The Company recognizes interest and penalties related to unrecognized tax benefits as tax expense. As of June 30, 2013 and 2012, the Company had accrued interest and penalties of $2.1 million and $1.7 million, respectively. The Company increased the accrual of interest and penalties by $0.4 million and $0.4 million during the years ended June 30, 2013 and 2012, respectively.

Changes to the balance of unrecognized tax benefits are as follows:

	June 30,
	2013			2012
	(in 000s)
Balance, beginning of year	$	12,707		$	8,364
Additions based on tax provisions related to current year		2,361			3,099
Additions for tax positions of prior years		578			1,461
Reductions for tax positions of prior years		—			(128	)
Lapse of statute of limitations		(75	)		(36	)
Foreign currency translation adjustment		7			(53	)
Balance, end of year	$	15,578		$	12,707

The Internal Revenue Service ("IRS') commenced examination of the Company's United States federal income tax returns for 2006 through 2009 during fiscal year 2011. The IRS completed its field examination of the open tax years and issued a Revenue Agent's Report in January 2012. The Company filed a formal protest regarding certain unagreed adjustments in March 2012 and the case was assigned to the IRS Appeals Office in Laguna Niguel, California. In June 2013, the Company agreed to settle all remaining issues with the IRS which was approved by the Joint Committee on Taxation in July 2013. Consequently, the Company expects to receive a refund of approximately $7.1 million and will reduce unrecognized tax benefits by approximately $8.0 million with a corresponding reduction to the income tax provision of approximately $3.6 million in the first quarter of fiscal 2014.

Including the IRS case described above, it is reasonably possible that the Company's amount of unrecognized tax benefits may decrease within the next twelve months by a range up to $9.5 million.

The Company files numerous consolidated and separate income tax returns in the United States and various state and foreign jurisdictions. The Company is currently under examination in certain states and foreign jurisdictions. With few exceptions, the Company is no longer subject to United States federal, state and local, or foreign income tax examinations for years before fiscal year 2006.

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LONG-TERM DEBT

12 Months Ended

Jun. 30, 2013

LONG-TERM DEBT

LONG-TERM DEBT

7.     LONG-TERM DEBT

	June 30,
	2013			2012
	(in 000s)
Revolving credit facility	$	240,000		$	230,000
Term loan facility		364,375			281,250
Other, generally unsecured		240			216
Long-term debt		604,615			511,466
Less current maturities		(24,615	)		(17,091	)
Long-term debt, net of current maturities	$	580,000		$	494,375

As of June 30, 2013 and 2012, there was approximately $460.0 million and $170.0 million, respectively, of undrawn availability under the revolving credit facility. Availability under the revolving credit facility is reduced to the extent of outstanding letters of credit.

On April 15, 2011, the Company entered into an amended and restated credit agreement, that provides for a five-year $700 million senior secured credit facility comprised of a $300 million term loan and a $400 million revolving credit facility. On April 19, 2013, the Company entered into an second amended and restated credit agreement that provides for a five-year $1.07 billion senior secured credit facility comprised of a $370 million term loan and a $700 million revolving credit facility, including a $50 million sublimit for the issuance of standby letters of credit, a $10 million sublimit for swingline loans and a $150 million sublimit for multicurrency borrowings approved under the credit facility. The interest rate on the credit facility is subject to a leverage-based pricing grid that ranges from LIBOR plus a margin of 1.00% to 2.00%.

As of June 30, 2013 and 2012, the interest rate on the revolving credit facility was 1.45% and 1.75%, respectively, and the interest rate on the term loan was 3.59% and 3.58%, respectively, after giving effect to the floating-to-fixed interest rate swap(s).

Under the credit facility, the term loan requires quarterly principal reductions in an amount equal to $5,625,000, through March 2014; $7,500,000, from June 2014 through March 2016; and $5,000,000 from June 2016 until the term loan's maturity in April 2018 upon when the remaining outstanding principal balance of $247,500,000 is due.

The credit facility is collateralized by substantially all of the Company's domestic property and is guaranteed by each of the Company's domestic subsidiaries, excluding any noncontrolling interests, and is secured by a pledge agreement.

The fair value of long-term debt is estimated by discounting expected cash flows using current interest rates at which similar loans would be made to borrowers with similar credit ratings and remaining maturities. As of June 30, 2013 and 2012, the fair value of long-term debt approximated the carrying value.

The credit facility contains a number of covenants that, among other things, restrict the Company's ability and certain of its subsidiaries to dispose of assets, incur additional indebtedness or issue preferred stock, pay dividends or make other distributions, enter into certain acquisitions, repurchase equity interests or subordinated indebtedness, issue or sell equity interests of our subsidiaries, engage in mergers or acquisitions or certain transactions with subsidiaries and affiliates, and that otherwise restrict corporate activities.

The financial covenants under the credit facility consist of a leverage ratio and an interest coverage ratio. The leverage ratio is computed as total debt outstanding at the end of the quarter divided by the trailing twelve months Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), excluding certain cash and non-cash charges. The interest coverage ratio is computed as EBITDA for the trailing twelve months divided by the trailing twelve months of interest charges.

A breach of any of the covenants or the inability to comply with the required financial ratios could result in a default under the credit facility. In the event of any such default, the lenders could elect to declare all borrowings outstanding under the credit facility, together with any accrued interest and other fees, to be due and payable. If the Company were unable to repay the indebtedness upon its acceleration, the lenders could proceed against the underlying collateral. The Company was in compliance with all of the credit facility covenants as of June 30, 2013 and 2012.

Interest Rate Swap Agreements

Effective December 2008, the Company entered into a floating-to-fixed interest rate swap agreement with an original notional value of $218.8 million that matured on September 26, 2012. Effective June 2011, the Company entered into a second floating-to-fixed rate swap agreement with an original notional value of $165.0 million and a maturity date of May 13, 2016 to fix a portion of the floating LIBOR based debt under the new term loan to fixed rate debt at an interest rate of 2.09% (plus applicable margin). The second interest swap has an accreting and subsequently amortizing notional in order to hedge the targeted amount of debt over the life of the swap. At June 30, 2013 and 2012, the swap agreements had a notional value of $264.4 million and $281.3 million, respectively.

The Company has documented and designated these interest rate swaps as cash flow hedges. Based on the assessment of effectiveness using statistical regression, the Company determined that the interest rate swaps are effective. Effectiveness testing of the hedge relationships and measurement to quantify ineffectiveness is performed each fiscal quarter using the hypothetical derivative method. As the interest rate swaps qualify as cash flow hedges, the Company adjusts the cash flow hedges on a quarterly basis to their fair value with a corresponding offset to accumulated Other Comprehensive Income ("OCI"). The interest rate swaps have been and are expected to remain highly effective for the life of the hedges. Effective amounts are reclassified to interest expense as the related hedged expense is incurred. Any ineffectiveness is reclassified from accumulated other comprehensive income to other income (expense). As of June 30, 2013, the Company had no ineffectiveness on its cash flow hedges. Amounts related to the swaps expected to be reclassified from other comprehensive income to interest expense in the next twelve months total $4.7 million.

Additional information on the Company's interest rate swaps are as follows:

Interest Rate Derivative Financial Instruments	Balance Sheet Location	Fair Value (in 000s)		Location of Offsetting Balance
Cash flow hedges—$264.4 million LIBOR based debt	Accrued and other liabilities	$	4,689
	Other liabilities		4,927
		$	9,616	Accumulated other comprehensive income (before income taxes)

Principal Repayments

Annual principal maturities of the Company's long-term debt are as follows:

Year Ended June 30,	(in 000s)
2014	$	24,615
2015		30,000
2016		27,500
2017		20,000
2018		502,500
Total	$	604,615

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SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS (Details) (USD $)	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2011
Allowance for doubtful accounts (current and long-term):
Balance at Beginning of Year	$ 17,102,000	$ 11,566,000	$ 15,143,000
Additions	11,173,000	9,863,000	7,963,000
Net Write-offs/ (Recoveries)	11,698,000	4,327,000	11,540,000
Balance at End of Year	16,577,000	17,102,000	11,566,000
Net write-offs related to development financing	$ 2,900,000		$ 5,500,000

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401(k) PLAN

12 Months Ended

Jun. 30, 2013

401(k) PLAN

401(k) PLAN

14.   401(k) PLAN

The Company is the sponsor of the Bally Technologies, Inc. 401(k) Savings Plan (the "401(k) Plan"). The 401(k) Plan was adopted for domestic employees of Bally Technologies, Inc. and all its domestic subsidiaries. Employees may enroll in the plan after meeting certain age and length of employment criteria, and plan participants may defer up to 25% of their compensation, up to certain IRS imposed limitations.

The Company matches 50% of any participant's contributions, up to the first 6% of their compensation (as defined in the plan document). Company matching contributions totaled approximately $2.4 million, $2.2 million and $1.9 million for each of the years ended June 30, 2013, 2012 and 2011, respectively.

For participants hired through December 31, 2000, employee and employer matching contributions are 100% vested immediately. For employees hired on or after January 1, 2001, vesting of the employer match is on a 20%, 5-year vesting schedule. Effective October 1, 2005, vesting of employer match is on a 25%, 4-year vesting schedule.

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COMMITMENTS AND CONTINGENCIES

12 Months Ended

Jun. 30, 2013

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

12.   COMMITMENTS AND CONTINGENCIES

Commitments

The Company is obligated under several agreements to pay certain royalties on the sale or rental of gaming devices. In addition, the Company has obtained the rights to certain game themes and intellectual property that call for payment of royalties based on either fixed amounts or variable amounts based on game performance. Total royalty expense for the Company for the years ended June 30, 2013, 2012 and 2011 was $21.6 million, $20.8 million and $11.5 million, respectively, and is included in the cost of gaming equipment and systems in the accompanying consolidated statements of operations. In addition, the Company has obtained the rights to certain game themes and intellectual property that call for payment of royalties based on either fixed amounts or variable amounts based on game performance.

Litigation

The Company is subject to legal proceedings, claims and investigations in the ordinary course of business, including claims of alleged infringement of third-party patents and other intellectual property rights, indemnification claims, commercial, employment, regulatory and other matters. Liabilities related to such matters are recorded when it is both probable that a liability has been incurred and the amount of the liability can be reasonably estimated. All legal costs associated with litigation are expensed as incurred.

In February 2012, HBG filed requests for arbitration in the National and International Chamber of Arbitration of Milan, Italy, against the Company's Dutch and Italian subsidiaries ("Bally Netherlands" and "Bally Italy", respectively). HBG alleged breach of contract (i) by Bally Netherlands in connection with a contractual arrangement pursuant to which the Company agreed to supply certain gaming equipment and (ii) by Bally Italy in connection with €15 million in financial assistance provided by Bally Italy for HBG's acquisition of licenses to operate gaming equipment in certain Italian markets. The Company responded in March 2012 denying the allegations and seeking to dismiss HBG's claims, asserting counterclaims against HBG for breach of contract, and seeking equitable relief compelling HBG to perform its contractual obligations as well as an undetermined amount of monetary damages. On July 29, 2013, the parties entered into a settlement agreement pursuant to which they agreed to waive all claims, terminate the arbitration and all contractual arrangements, and HBG agreed to repay the Company €15 million in graduated monthly installments over four years from July 2013 to June 2017. Termination of the arbitral proceedings is pending the Arbitral Tribunal's approval of the parties' joint requests for termination which is expected in September 2013.

In April 2006, International Game Technology ("IGT") filed a patent infringement lawsuit against the Company in the United States District Court for the District of Delaware. The complaint asserted that the Company's Bally Power Bonusing products infringe patents held by IGT, and sought injunctive relief and damages in unspecified amounts. In April 2009, the district court issued an order finding that two of the Company's products, ACSC Power Winners and ACSC Power Reward, infringe some patent claims asserted by IGT, but not others. Both parties appealed. In the meantime, the Company undertook technical changes to ensure non-infringement for the two products partially in question. In October 2011, the Federal Circuit Court of Appeals affirmed the district court's decision, and the case was remanded back to the district court for discovery and trial on the issue of damages. In October 2012, the parties entered into a settlement and license agreement ending the case.

In December 2004, IGT filed a patent infringement lawsuit against the Company in the United States District Court for the District of Nevada. The complaint asserted that the Company's wheel-based games, its games with a reel in the top box and its iVIEW™ products infringed on patents held by IGT, and sought injunctive relief and damages in unspecified amounts. As part of the defense, the Company asserted counterclaims seeking damages and other relief against IGT, including claims that IGT's patents were invalid, unenforceable and not infringed, as well as several claims that IGT engaged in anti-competitive conduct in violation of state and federal antitrust laws. In October 2008, the court granted the Company's motions for summary judgment, ruling that IGT's two "wheel" patents and a touch-screen player-tracking patent were invalid; that even if the patents were valid, the Company's wheel-based games at issue would not infringe; and that certain of its iVIEW products do not infringe the two asserted player- tracking patents. The summary judgment determinations were upheld by the Federal Circuit Court of Appeals. Upon remand, the District Court granted summary judgment in favor of IGT on the remaining portion of the case regarding IGT's alleged antitrust violations and in favor of Bally on IGT's remaining claim that Bally infringed an IGT player tracking patent. The Company appealed the summary judgment on Bally's antitrust claims against IGT, and on December 17, 2012, a divided panel of the Federal Circuit Court of Appeals affirmed. The Company's petition for rehearing by the full court was denied on January 29, 2013.

In October 2010, WMS Gaming Inc. ("WMS") filed a patent infringement lawsuit against the Company in the United States District Court for the District of Northern Illinois. The complaint asserted that several of the Company's products using iReel displays infringe two WMS patents and sought injunctive relief and damages in unspecified amounts. WMS later amended its complaint to assert three additional patents related to the use of a video screen in conjunction with a gaming machine using mechanical reels also infringe certain WMS patents. As part of its response, the Company asserted counterclaims seeking damages and other unspecified relief against WMS for violation of certain Company patents, including claims that the WMS patents are invalid, unenforceable, and not infringed. In November 2011, the Company and WMS entered into a settlement and license agreement to end the litigation. As part of the agreement, the Company obtained a license to the WMS and Aruze Transmissive Reels® gaming technology portfolio under confidential terms.

The Company is also a party to various claims and lawsuits relating to routine matters that arise from time to time in the ordinary course of its' business. Although, management does not currently believe that the outcome of such claims, including the matters discussed above, in the aggregate, will have a material effect on its consolidated financial position, results of operations or cash flows, these matters are subject to inherent uncertainties and management' s view of these matters may change in the future.

As of June 30, 2013, the Company accrued aggregate liabilities of $6.7 million in other current liabilities for its contingent legal matters. Were unfavorable final outcomes to occur, there exists the possibility of a material adverse impact on the Company's financial statements for the period in which the effects become reasonably estimable.

XML

Document and Entity Information (USD $)	12 Months Ended
	Jun. 30, 2013	Aug. 20, 2013	Dec. 31, 2012
Document and Entity Information
Entity Registrant Name	BALLY TECHNOLOGIES, INC.
Entity Central Index Key	0000002491
Document Type	10-K
Document Period End Date	Jun. 30, 2013
Amendment Flag	false
Current Fiscal Year End Date	--06-30
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 1,799,000,000
Entity Common Stock, Shares Outstanding		38,890,000
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	FY

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SEGMENT AND GEOGRAPHICAL INFORMATION

12 Months Ended

Jun. 30, 2013

SEGMENT AND GEOGRAPHICAL INFORMATION

SEGMENT AND GEOGRAPHICAL INFORMATION

13.   SEGMENT AND GEOGRAPHICAL INFORMATION

We operate in one industry segment: the design, manufacture, operation, and distribution of advanced technology-based gaming solutions. Our Chief Executive Officer is our Chief Operating Decision Maker. Our management reviews financial information presented on a consolidated basis, accompanied by disaggregated information it receives from its internal management system about revenues by Gaming Equipment, which includes the sale of gaming devices and related equipment, parts and conversion kits; Gaming Operations, which includes the operation of wide-area progressive, video lottery and centrally determined systems and the rental of gaming devices and content; and Systems, which includes the sale and support of computerized monitoring systems and related recurring hardware and software maintenance revenue.

The following is a summary of revenues and gross margin:

	Year Ended June 30,
	2013		2012		2011
	(in 000s)
Revenues:
Gaming Equipment and Systems
Gaming Equipment	$	339,842	$	310,651	$	246,514
Gaming Operations		404,978		357,417		318,621
Systems		252,219		211,691		193,020
Total revenues	$	997,039	$	879,759	$	758,155
Gross Margin(1):
Gaming Equipment and Systems
Gaming Equipment	$	170,629	$	139,845	$	112,096
Gaming Operations		282,790		257,737		229,801
Systems		192,627		155,861		142,602
Total gross margin	$	646,046	$	553,443	$	484,499

(1)

Gross Margin from Gaming Equipment and Systems excludes amortization related to certain intangibles including core technology and license rights, which are included in depreciation and amortization.

The Company has operations based primarily in the United States as well as significant sales and distribution offices based in Europe, and other foreign locations, including South America. The table below presents information as to the Company's revenues, operating income and identifiable assets by geographic region which is determined by country of destination:

	Year Ended June 30,
	2013		2012		2011
	(in 000s)
Revenues:
United States and Canada	$	826,975	$	716,075	$	619,219
International		170,064		163,684		138,936
Total revenues	$	997,039	$	879,759	$	758,155
Operating income:
United States and Canada	$	214,527	$	159,324	$	135,096
International		20,983		20,119		16,439
Total operating income	$	235,510	$	179,443	$	151,535
Identifiable assets:
United States and Canada	$	742,900	$	730,758	$	692,778
International		236,365		239,709		234,616
Total identifiable assets	$	979,265	$	970,467	$	927,394

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INCOME TAXES (Details) (USD $)	3 Months Ended									12 Months Ended
	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2011
Consolidated income from continuing operations before taxes and noncontrolling interest
United States										$ 220,439,000	$ 161,043,000	$ 131,668,000
Foreign										(4,164,000)	3,416,000	11,725,000
Income from continuing operations before income taxes		58,502,000	55,933,000	52,467,000	49,373,000	45,598,000	47,627,000	38,972,000	32,262,000	216,275,000	164,459,000	143,393,000
Current income tax expense from continuing operations
Federal										73,441,000	61,115,000	12,614,000
State										8,623,000	9,085,000	5,585,000
Foreign										4,299,000	2,902,000	3,245,000
Total										86,363,000	73,102,000	21,444,000
Deferred income tax expense from continuing operations
Federal										(5,346,000)	(7,169,000)	23,984,000
State										(509,000)	(1,383,000)	(919,000)
Foreign										(3,934,000)	(1,001,000)	673,000
Total										(9,789,000)	(9,553,000)	23,738,000
Income tax expense		21,229,000	17,527,000	19,389,000	18,429,000	19,295,000	17,713,000	14,688,000	11,853,000	76,574,000	63,549,000	45,182,000
Reconciliation of the Company's effective income tax rate
U.S. federal statutory income tax rate (as a percent)										35.00%	35.00%	35.00%
Change in income tax contingencies (as a percent)										1.40%	2.10%	(2.50%)
State income taxes, net of federal benefit (as a percent)										2.60%	2.80%	2.00%
Foreign earnings subject to U.S. tax (as a percent)										(0.30%)	(0.30%)	2.90%
Change in valuation allowance (as a percent)											(0.60%)	(0.20%)
Tax credits (as a percent)										(2.50%)	(1.20%)	(4.70%)
Domestic production activities deduction (as a percent)										(2.70%)	(2.70%)	(1.50%)
Foreign losses-no future benefit (as a percent)										0.90%	2.00%
Other, net (as a percent)										1.00%	1.50%	0.50%
Effective income tax rate (as a percent)										35.40%	38.60%	31.50%
Deferred tax assets:
Share-based compensation		11,421,000				11,838,000				11,421,000	11,838,000
Deferred revenue, net of deferred costs		15,947,000				14,145,000				15,947,000	14,145,000
Accruals not currently deductible for tax purposes		21,764,000				21,537,000				21,764,000	21,537,000
Inventory		5,250,000				5,518,000				5,250,000	5,518,000
Net operating loss carryforwards		5,949,000				2,988,000				5,949,000	2,988,000
Intangible assets		6,438,000				4,825,000				6,438,000	4,825,000
Allowance for doubtful accounts		2,708,000				4,132,000				2,708,000	4,132,000
Foreign tax credit carryforwards						1,588,000					1,588,000
Other tax credits						969,000					969,000
Interest rate swap agreement		3,515,000				5,043,000				3,515,000	5,043,000
Other		1,571,000				1,176,000				1,571,000	1,176,000
Total gross deferred tax assets		74,563,000				73,759,000				74,563,000	73,759,000
Less: Valuation allowance		(62,000)				(68,000)				(62,000)	(68,000)
Deferred tax assets		74,501,000				73,691,000				74,501,000	73,691,000
Deferred tax liabilities:
Property and equipment		18,322,000				22,955,000				18,322,000	22,955,000
Other		100,000				1,153,000				100,000	1,153,000
Total gross deferred tax liabilities		18,422,000				24,108,000				18,422,000	24,108,000
Net deferred tax assets		56,079,000				49,583,000				56,079,000	49,583,000
Deferred tax liabilities, current		0				21,000				0	21,000
Deferred tax liabilities, noncurrent		170,000				627,000				170,000	627,000
Undistributed earnings from foreign subsidiaries		15,200,000				12,100,000				15,200,000	12,100,000
Net operating loss carryforwards for U.S. federal income tax purposes		4,500,000								4,500,000
Net operating losses in several foreign jurisdictions, total		16,700,000								16,700,000
Valuation allowance for foreign net operating losses		0								0
Increase to stockholder's equity for certain tax benefits realized from employee share-based compensation										20,400,000	6,400,000
Unrecognized tax benefits		15,578,000				12,707,000				15,578,000	12,707,000	8,364,000
Portion of unrecognized tax benefits, if recognized, would impact entity's effective tax rate		15,500,000				12,700,000				15,500,000	12,700,000
Accrued interest and penalties related to unrecognized tax benefit		2,100,000				1,700,000				2,100,000	1,700,000
Increase in accrued interest and penalties during the period related to unrecognized tax benefits										400,000	400,000
Changes to the balance of unrecognized tax benefits
Balance, beginning of year	15,578,000				12,707,000				8,364,000	12,707,000	8,364,000
Additions based on tax provisions related to current year										2,361,000	3,099,000
Additions for tax positions of prior years										578,000	1,461,000
Reductions for tax positions of prior years											(128,000)
Lapse of statute of limitations										(75,000)	(36,000)
Foreign currency translation adjustment										7,000	(53,000)
Balance, end of year		15,578,000				12,707,000				15,578,000	12,707,000	8,364,000
Expected tax refund, relating to federal income tax returns examination for the year 2006 through 2009	7,100,000
Expected reduction to unrecognized tax benefits	8,000,000
Expected reduction to income tax provision	3,600,000
Decrease in unrecognized tax benefits, is reasonably possible, estimated range, maximum		$ 9,500,000								$ 9,500,000

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STOCKHOLDERS' EQUITY, OPTIONS, WARRANTS AND RIGHTS (Details 3)	Jun. 30, 2013 item	Jun. 30, 2012
Special Stock
Special stock, authorized	10,000,000	10,000,000
Special Stock, number of series authorized	4
Convertible subordinated debentures, interest rate (as a percent)	7.50%
Special stock, Series E, shares outstanding	0	115