SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12

International Lottery & Totalizator Systems, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

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(2) Aggregate number of securities to which transaction applies:

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

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(2) Form, Schedule or Registration Statement No.:

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(4) Date Filed:

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[INTERNATIONAL LOTTERY LOGO]

INTERNATIONAL LOTTERY & TOTALIZATOR SYSTEMS, INC.
2131 FARADAY AVENUE
CARLSBAD, CALIFORNIA 92008-7297

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

NOTICE OF ANNUAL MEETING

The 2001 Annual Meeting of Shareholders of International Lottery &
Totalizator Systems, Inc. (the "Company") will be held at 3:00 p.m., Pacific
Daylight Savings Time, on Thursday, June 28, 2001 at the Grand Pacific Palisades
Resort & Hotel, 5805 Armada Drive, Carlsbad, California, for the purpose of:

Electing seven directors for the ensuing year.

Shareholders of record at the close of business on May 4, 2001 will be
entitled to vote at the meeting. The transfer books will not be closed. The
approximate date on which the proxy statement and form of proxy are first being
sent or given to shareholders is May 15, 2001.

By order of the Board of Directors,

/s/ M. MARK MICHALKO

M. Mark Michalko
President

May 15, 2001
Carlsbad, California

TO ENSURE YOUR REPRESENTATION AT THE MEETING, PLEASE DATE, SIGN AND MAIL
PROMPTLY THE ENCLOSED PROXY, FOR WHICH A RETURN ENVELOPE IS PROVIDED.
3

INTERNATIONAL LOTTERY & TOTALIZATOR SYSTEMS, INC.
2131 FARADAY AVENUE
CARLSBAD, CALIFORNIA 92008-7297

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

PROXY STATEMENT

Proxies in the form enclosed with this statement are solicited by the Board
of Directors of the Company for use at the Annual Meeting of Shareholders to be
held in Carlsbad, California, on June 28, 2001, including any adjournments or
postponements thereof. Execution of a proxy will not in any way affect a
shareholder's right to attend the meeting and vote in person, and any holder
giving a proxy has the right to revoke it at any time before it is exercised by
filing with the Secretary of the Company a written revocation or duly executed
proxy bearing a later date. The proxy will be suspended if the holder is present
at the meeting and elects to vote in person.

VOTING SECURITIES

The voting securities of the Company consist of its common shares of which
12,943,000 shares are outstanding as of May 4, 2001. Only holders of common
shares of record on the books of the Company at the close of business on May 4,
2001, which is the record date, will be entitled to vote at the meeting. Each
such holder of common shares is entitled to one vote for each said share, and
has the right to cumulate his or her votes for directors if his or her
candidate's or candidates' names have been placed in nomination prior to the
voting and any shareholder has given notice at the meeting prior to the voting
of that shareholder's intention to cumulate his or her votes. The persons named
in the enclosed proxy may or may not elect to give such notice and vote the
shares they represent in such a manner.

Votes cast by proxy or in person at the Annual Meeting will be counted by
the person appointed by the Company to act as Inspector of Election for the
Annual Meeting. The Inspector of Election will treat shares represented by
proxies that reflect abstentions or include "broker non-votes" as shares that
are present and entitled to vote for purposes of determining the presence of a
quorum. Abstentions or "broker non-votes" do not constitute a vote "for" or
"against" any matter and thus will be disregarded in the calculation of "votes
cast." Any unmarked proxies, including those submitted by brokers or nominees,
will be voted in favor of the nominees of the Board of Directors, as indicated
on the accompanying proxy card.

The approximate date on which this proxy statement and form of proxy are
first being sent or given to shareholders is May 15, 2001.
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ELECTION OF DIRECTORS

The Board currently consists of the following nine directors: Frederick A.
Brunn, Chan Kien Sing, Theodore A. Johnson, M. Mark Michalko, Alain K. K. Lee,
Ng Foo Leong, Leonard G. Morrissey, Martin J. O'Meara, Jr., and Michael G.R.
Sandberg. The current directors will serve until the Annual Meeting and until
their respective successors have been duly elected and qualified. Seven of the
current directors of the Company has been nominated and recommended for election
to serve as a director for a term of one year and until his successor has been
duly elected and qualified. Each of the director nominees has individually
advised the Board that he is able and willing to serve as a director of the
Company. If no contrary indication is made, proxies in the accompanying form are
to be voted for each of the seven nominees for director or, if for any reason
any of them become unavailable for election, the individuals named in the
enclosed proxy may exercise their discretion to vote for any substitute nominee
or nominees proposed by the Board of Directors.

The following table sets forth certain information regarding the beneficial
ownership of the Company's common shares as of May 1, 2001 by (i) each director
and nominee for director of the Company, (ii) an executive officer, (iii) the
executive officer and directors of the Company as a group and (iv) each person
or entity who is a beneficial owner of more than 5% of the Company's outstanding
common shares. With respect to each director or nominee of the Company, the
table also sets forth his age, the year he was first elected as a director,
employment history for the past five years, and other directorships. With
respect to the executive officer who is not a director, the table sets forth his
age, position with the Company, and employment history for the past five years.
For purposes of this proxy statement, beneficial ownership of securities is
defined in accordance with the rules of the Securities and Exchange Commission
and means generally the power to vote or exercise investment discretion with
respect to securities, regardless of any economic interests therein. Except as
otherwise indicated, the Company believes that the beneficial owners of the
securities listed below have sole investment and voting power with respect to
such shares, subject to community property laws where applicable.

PERCENT
NAME OF BENEFICIAL OWNER AMOUNT OF CLASS
------------------------ --------- --------

FREDERICK A. BRUNN, 56, Director since 1989. President 47,975(A) *
from February 1994 to May 1997. Chief Executive Officer,
San Diego Manufacturing Extension Center April 1998 to
September 1999. Principal, California Motorcycle Tours,
1999 to December 2000. Vice President, San Diego Tech
Center, Transcore, December 2000 to present.
CHAN KIEN SING, 44, Director since June 1993. Group 11,669(B) *
Executive Director of Berjaya Group Berhad since 1990.
THEODORE A. JOHNSON, 60, Director since 1979. President, 30,275(B) *
Minnesota Cooperation Office for Small Business and Job
Creation, Inc. from 1980 to present. Director of
Surgidyne, Inc. and Humanetics Corp. for at least the
last five years.
M. MARK MICHALKO, 46, Director since February 1994. 63,941(C) *
President since May 1997, Executive Vice President from
February 1994 to May 1997.
ALAIN K. K. LEE, 45, Director since May 1999. Executive 4,900(D) *
Vice President, Roadhouse Grill, Inc. since July 1998
and Director since January 1998. Director of several
companies in the food industry affiliated with Berjaya.
Berjaya Group Chief Financial Officer and General
Manager of several Berjaya Group subsidiary companies
from 1990 to 1997.
NG FOO LEONG, 50, Director since June 1993. Executive 11,669(B) *
Director, Sports Toto Malaysia Sdn. Bhd., a lottery
gaming company, from 1985 to present.
MARTIN J. O'MEARA, JR., 72, Director since 1979. 123,111(B) *
President, The Budget Plan, Inc., a privately owned
company engaged in the consumer loan business, and has
been so employed for more than five years.

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PERCENT
NAME OF BENEFICIAL OWNER AMOUNT OF CLASS
------------------------ --------- --------

MICHAEL G. R. SANDBERG, 73, Director since 1987. Private 39,336(B) *
investor. Chairman and Chief Executive of the Hong Kong
and Shanghai Banking Corporation from 1977 to 1986.
Director of Broadstreet, Inc., a bank holding
company.(a)
TIMOTHY R. GROTH, 52, Vice President, Technical Operations 27,808(E) *
since 1994.
ALL DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP (9 360,684(A)(B)(C)(D)(E) 2.7%
PERSONS)
BERJAYA LOTTERY MANAGEMENT (H.K.) LIMITED (BERJAYA) 9,245,317(F) 71.4%

- ---------------
(A) Includes 37,669 common shares issuable upon exercise of outstanding stock
options that are exercisable within 60 days of May 4, 2001.

(B) Includes 11,669 common shares issuable upon exercise of outstanding stock
options that are exercisable within 60 days of May 4, 2001.

(C) Includes 56,427 common shares issuable upon exercise of outstanding stock
options that are exercisable within 60 days of May 4, 2001.

(D) Includes 4,900 common shares issuable upon exercise of outstanding stock
options that are exercisable within 60 days of May 4, 2001.

(E) Includes 21,503 common shares issuable upon exercise of outstanding stock
options that are exercisable within 60 days of May 4, 2001.

(F) Chan Kien Sing, Alain K. K. Lee and Ng Foo Leong are employees of an
affiliate of Berjaya. All three individuals disclaim beneficial ownership
of such shares. Berjaya's business address is Level 28, Menara Shahzan
Insas, Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia.

(a) not standing for re-election

* Less than one percent of the outstanding common shares.

MEETINGS OF THE BOARD OF DIRECTORS

During 2000, three meetings of the Board of Directors were held. Each
incumbent director attended all meetings of the Board of Directors held during
the year in which he was a director, except that Michael G. R. Sandberg and, Ng
Foo Leong missed two meetings and Chan Kien Sing missed one meeting.

COMMITTEES OF THE BOARD OF DIRECTORS

The Board has an Executive Committee, which consists of Messrs. Chan,
Johnson, Lee and Michalko. The Executive Committee held one meeting during the
year. The Executive Committee may exercise all the authority of the Board in the
management of the Company except for matters expressly reserved by law for board
action.

The Board has an Executive Compensation Committee (the "Compensation
Committee") consisting of Messrs. Johnson, Lee and Chan. The Compensation
Committee met twice during the year. Its function is to establish compensation
for all executive officers of the Company and to administer the Company's stock
option plans.

The Board has an Audit Committee consisting of Messrs. Morrissey, Chan and
Lee. The Audit Committee held five meetings during the year. The Audit Committee
reviews and evaluates internal auditing controls and recommends to the Board a
firm of independent public accountants to serve as auditors. The Audit Committee
reviews the periodic SEC filings with such auditors and the scope and result of
their audit, fees for services and independence in servicing the Company.

The Board has a Nominating Committee consisting of Messrs. Chan, Johnson
and Michalko. The Nominating Committee held one meeting during the year. The
Nominating Committee seeks out, evaluates and recommends to the Board qualified
nominees for election as directors of the Company and considers other

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matters pertaining to the size and composition of the Board. The Nominating
Committee will give appropriate consideration to qualified persons recommended
by shareholders for nomination as directors provided that such recommendations
are accompanied by information sufficient to enable the Nominating Committee to
evaluate the qualifications of the nominee.

The Affiliations Committee reviews and approves the fairness to the Company
of any transactions between the Company and Berjaya. The members of the
Committee are Messrs. O'Meara, Brunn, Johnson and Michalko. The Affiliations
Committee held two meetings during the year.

COMPENSATION OF DIRECTORS

Each director who is not an employee of the Company receives an annual
retainer of $4,000 plus $500 per board meeting and reimbursement for all related
expenses. The chairman of each committee who is not an employee of the Company
receives an additional annual retainer of $1,000. Each committee member receives
$500 per committee meeting and reimbursement of all related expenses if such
committee meeting is held at a time when it does not coincide with a board
meeting.

VOTE REQUIRED; BOARD RECOMMENDATION

Individual directors will be elected by a favorable vote of a plurality of
the common shares represented and entitled to vote in person or by proxy at the
Annual Meeting.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE NOMINEES SET
FORTH HEREIN. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED
UNLESS SHAREHOLDERS SPECIFY OTHERWISE ON THEIR PROXY CARDS.

EXECUTIVE COMPENSATION AND OTHER INFORMATION

REPORT OF THE COMPENSATION COMMITTEE

Members of the Compensation Committee evaluate the performance of senior
management, including the president, and review and approve the base
compensation and bonuses for the Company's executive officers. The Compensation
Committee also administers the Company's Executive Bonus Plan and employee stock
option plans. The Compensation Committee periodically reports to the Board on
its activities.

Compensation Philosophy. The Compensation Committee bases its decisions on
the Company's executive compensation philosophy, which relates the level of
compensation to the Company's success in meeting its annual and long-term
performance goals, rewards individual achievement and seeks to attract and
retain qualified executives. The Company's executive compensation program
consists of two principal components: (i) base salary and, (ii) a potential for
an annual bonus under the Company's Executive Bonus Plan based upon the Company
achieving a threshold level of profitability as well as individual performance.
The Company positions its overall executive compensation levels at or near the
median of the range of compensation levels for other companies comparable to the
Company located in Southern California and which are viewed as competitors for
executive talent in the overall labor market. This data is obtained from surveys
conducted by external compensation consultants and trade associations. In
reviewing this data, the Company takes into account how its compensation
policies and overall performance compare to similar indices for comparable
companies.

The Company employs a formal performance review system for all employees,
including the president and the other Named Executive Officer (as defined on
page 6). This process generates information that the Compensation Committee uses
in making decisions on base compensation and awards under the Company's
Executive Bonus Plan. The president is responsible for preparing the reviews on
all executive officers other than himself. The Compensation Committee Chairman
is responsible for preparing the review on the president. All reviews are then
discussed and approved by the Compensation Committee. Executive performance is
measured both in terms of the performance of the Company as a whole and various
individual

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performance factors, including the performance of divisions for which such
officer had management responsibility and individual managerial accomplishments.

The Internal Revenue Code denies a deduction to any publicly held
corporation for compensation paid to any "covered employee" (which is defined as
the president and the corporation's other four most highly compensated officers,
as of the end of a taxable year) to the extent that the compensation of any
individual covered employee exceeds $1 million in any taxable year of the
corporation beginning after 1993. Compensation that is payable pursuant to
written binding agreements entered into before February 18, 1993 and
compensation that constitutes "performance-based compensation" is excludable in
applying the $1 million limit. It is the Company's policy to qualify the
compensation paid to its top executives for deductibility under the law in order
to maximize the Company's income tax deductions. Based upon the Internal Revenue
Service's regulations and projected compensation payable to the Company's
"covered employees" for the 2001 taxable year, all compensation payable by the
Company in 2000 to such covered employees should be deductible by the Company.

Base Salaries. In determining base salaries for executive officers, the
Compensation Committee reviews external comparative data and also receives
recommendations from management. The Compensation Committee bases its decisions
on such data, as well as internal salary comparisons and individual performance
evaluations. Under this system, salary increases have generally the same effect
as a cost of living adjustment, although increases are not expressly tied to any
cost of living indicator. Increases are awarded, however, only to those
executives who are performing at or above a satisfactory level.

Executive Bonus Plan. In addition to base compensation, executives are
eligible to participate in the Company's Executive Bonus Plan. Under the
Executive Bonus Plan, the Compensation Committee has set threshold levels of net
after tax profit, exclusive of extraordinary items, for 2000. No bonus awards
are made for any year in which the Company does not meet the threshold
profitability level. The amount of the bonus pool is based on a percentage of
the Company's net after tax profits above the profitability thresholds and shall
not cause the net after tax profit to fall below the threshold after computation
of the bonus pool. During each year of the Executive Bonus Plan, the Company's
research and development budget must be maintained at a level to ensure that the
Company's new product development is sufficient to keep it competitive in its
marketplace, and continuation product engineering sufficient to maintain the
Company's existing products is also required. The Compensation Committee retains
discretion to adjust the bonus pool and awards based upon extraordinary
circumstances and other criteria as determined by the Compensation Committee.

Individual awards under the Executive Bonus Plan are determined by the size
of the bonus pool and individual performance of the executive. The Compensation
Committee has structured the Executive Bonus Plan so that award potential is
consistent with competitive norms and potentially represents a significant
percentage of the executive's overall compensation in any given year. Awards are
paid after completion of the Company's audited financial statements for that
year. The Company met the profitability threshold under the Executive Bonus Plan
for 2000.

Equity Participation. The Compensation Committee believes that equity
participation serves to align the interests of executive officers with
shareholder value. The number of stock options granted or restricted stock
awarded takes into account the recipient's position and is intended to recognize
different levels of responsibility. In determining the level of stock option
grants or restricted stock awarded, the Compensation Committee also considers
competitive practices. As a result, grants and awards may vary from year to
year.

The foregoing report has been furnished by the Compensation Committee.

Theodore A. Johnson, Chairman
May 9, 2001

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COMPENSATION OF NAMED EXECUTIVE OFFICERS

The following table shows, for the years ended December 31, 2000, 1999, and
1998, the compensation earned by the President and the only executive officer of
the Company earning in excess of $100,000 during 2000 (the "Named Executive
Officers").

SUMMARY COMPENSATION TABLE

LONG TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
------------------------ ----------------------------
AWARDS
----------
NUMBER OF ALL OTHER
NAME AND PRINCIPAL POSITION(S) YEAR SALARY(1) BONUS OPTIONS(2) COMPENSATION(3)
------------------------------ ---- --------- ----- ---------- ---------------

M. Mark Michalko.............................. 2000 $167,674 -- -- --
President and Director 1999 $151,421 -- 65,000 --
1998 $144,518 -- -- --
Timothy R. Groth.............................. 2000 $138,275 -- -- --
Vice President, 1999 $122,762 -- 30,000 --
Technical Operations 1998 $123,852 -- -- --

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(1) Perquisites in 2000, 1999 and 1998 are included under salary and did not
exceed the lesser of $50,000 or 10% of the total salary and bonus for any
such officer.

(2) All awards are incentive stock options granted pursuant to the Company's
1990 Employee Stock Option Plan.

(3) All amounts are Company matching contributions to the Employee Stock Bonus
401(k) Plan in 1997. There were no Company matching contributions in 2000,
1999 and 1998.

STOCK OPTION GRANTS

There were no stock options or stock appreciation rights granted to
executive officers in 2000.

STOCK OPTION HOLDINGS

The following table sets forth information with respect to the Named
Executive Officers concerning unexercised stock options held as of December 31,
2000. There were no stock options exercised by executive officers in 2000 and
there were no unexercised, in-the-money stock options at December 31, 2000.

UNEXERCISED OPTIONS

NUMBER OF UNEXERCISED
OPTIONS AT DECEMBER 31, 2000
----------------------------
NAME EXERCISABLE UNEXERCISABLE
---- ----------- -------------

M. Mark Michalko............................ 56,427 56,242
Timothy R. Groth............................ 21,503 24,166

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

The Company has entered into sales agreements to supply terminals, spares
and services to entities in which the Company's largest shareholder, Berjaya,
has a significant equity interest. Revenues related to these agreements totaled
$1.3 million in 2000. Included in accounts receivable was $0.1 million and $0.2
million at December 31, 2000 and 1999 respectively, relating to Philippine
Gaming Management Corporation (PGMC), a long-standing customer and a majority
owned Berjaya subsidiary.

During 1996, the Company entered into an agreement with Berjaya (1996
Agreement) to purchase specific inventory on behalf of Berjaya to enable the
Company to satisfy certain future potential orders in a timely manner. Title to
the inventory purchased resides with Berjaya; therefore, no amounts are
reflected in

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the consolidated balance sheets for inventory purchased on their behalf.
Advances received in excess of inventory purchased aggregated approximately $392
thousand as of December 31, 2000.

In November 2000, a purchase order was received under the 1996 Agreement to
supply PGMC with terminals. The sale generated limited cash to the Company, but
decreased the amount of inventory purchased on behalf of Berjaya referenced
above. Over 78% of the $0.5 million contract revenue was paid directly to
Berjaya and used to reduce the Berjaya inventory held by the Company. PGMC also
purchased an additional $568 thousand in spare parts during 2000.

In November 2000, the Company and Sports Toto Malaysia Sdn Bhd (STM), a
subsidiary of Berjaya, executed an agreement for the Company to supply an
on-line lottery system and services to STM for $8.1 million. The system is
scheduled to be operational in the third quarter of 2001. Revenues totaling $188
thousand were recognized on this contract in 2000.

In February 2001, the Affiliations Committee of the Board of Directors
approved a $1.5 million, six-month, short-term loan to Berjaya at an interest
rate of 9% per annum. The note is due on August 31, 2001.

FISCAL 2000 AUDIT FIRM FEE SUMMARY

During fiscal year 2000, the Company retained its principal auditor, Arthur
Andersen, to provide services in the following categories and amounts:

Audit Fees................................................ $159,000
All Other Fees............................................ $ 18,400

The Audit Committee has considered whether the provision of non-audit
services by the Company's principal auditor is compatible with maintaining
auditor independence.

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COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG INTERNATIONAL LOTTERY & TOTALIZATOR SYSTEMS, INC.,
THE S&P SMALLCAP 600 INDEX AND A PEER GROUP

[PERFORMANCE GRAPH]

INTERNATIONAL LOTTERY &
TOTALIZATOR SYSTEMS, INC. PEER GROUP S&P SMALLCAP 600
------------------------- ---------- ----------------

12/95 100 100 100
12/96 59.09 117.87 121.32
12/97 59.09 120.25 152.36
12/98 8.33 96.24 156.52
12/99 19.71 87.67 175.93
12/00 12.12 81.63 196.69

--------------------------------------------------------------------------------
12/95 12/96 12/97 12/98 12/99 12/00
--------------------------------------------------------------------------------

International
Lottery &
Totalizator
Systems, Inc. 100.00 59.09 59.09 8.33 19.71 12.12
Peer Group 100.00 117.87 120.25 96.24 87.67 81.63
S&P Smallcap 600 100.00 121.32 152.36 156.52 175.93 196.69
--------------------------------------------------------------------------------

- ---------------
* INVESTED ON 12/31/95 IN STOCK OR INDEX --
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING DECEMBER 31.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

The Company believes, based upon a review of reports furnished to the
Company, that all reports were timely filed, and that, during 2000 its officers
and directors complied with all filing requirements under Section 16(a) of the
Securities Exchange Act of 1934.

OTHER MATTERS

All shareholders of record at the close of business on May 4, 2001, the
record date for the determination of shareholders entitled to vote at the Annual
Meeting, have been sent or are currently being sent a copy of the Company's
Annual Report, including financial statements for the year ended December 31,
2000.

The expense of preparing, printing and mailing the Notice of Annual Meeting
and proxy material and all other expenses of soliciting proxies will be borne by
the Company. In addition to the solicitation of proxies by use of the mails, the
directors, officers and regular employees of the Company, who will receive no
compensation in addition to regular salary, may solicit proxies by mail,
telegraph, telephone, or personal interview. The Company may also reimburse
brokerage firms, banks, trustees, nominees and other persons for their expenses
in forwarding proxy material to the beneficial owners of shares held by them of
record.

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Management knows of no business that will be presented for consideration at
the Annual Meeting other than that stated in the Notice of Annual Meeting.
However, if any such matter shall properly come before the meeting, the persons
named in the enclosed proxy form will vote the same in accordance with their
best judgement.

Management has invited a representative from the Company's independent
auditors, Arthur Andersen LLP, to attend the meeting.

SHAREHOLDER PROPOSALS

Shareholder proposals for presentation at the 2002 Annual Meeting must be
received by the Company no later than January 31, 2002 to be considered for
inclusion in the 2001 proxy and proxy statement. In addition, pursuant to a rule
of the SEC, if the Company has not received notice by April 2, 2002 of any
matter a shareholder intends to propose for a vote at the next annual meeting of
shareholders, then a proxy solicited by the Board may be voted on such matter in
the discretion of the proxy holder, without discussion of the matter in the
proxy statement soliciting such proxy and without such matter appearing as a
separate item on the proxy card.

By order of the Board of Directors,

/s/ M. MARK MICHALKO

M. Mark Michalko
President

May 13, 2001
Carlsbad, California

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PROXY

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF

INTERNATIONAL LOTTERY & TOTALIZATOR SYSTEMS,INC.

The undersigned hereby appoints James E. Snow and Lawrence E. Logue
proxies, each with power to act without the other and with power of
substitution, and hereby authorizes each of them to represent and vote as
designated on the other side, all the shares of stock of International Lottery &
Totalizator Systems, Inc., standing in the name of the undersigned with all
powers which the undersigned would possess if present at the Annual Meeting of
Shareholders to be held June 28, 2001 or any adjournment thereof.

(Continued, and to be marked, dated and signed, on the other side)

- --------------------------------------------------------------------------------
FOLD AND DETACH HERE

AN INVITATION

Please join Management and the Board of Directors of
INTERNATIONAL LOTTERY & TOTALIZATOR SYSTEMS, INC.
for the year 2001 Annual Meeting of Shareholders

DATE: Thursday, June 28, 2001

TIME: 3 p.m.

PLACE: Grand Pacific Palisades Resort & Hotel
5805 Armada Drive
Carlsbad, California 92008
Call for directions if necessary (760) 827-3200

R.S.V.P. Jim Snow: Tel: (760) 760-3629
Fax: (760) 931-1789
E-Mail: jsnow@ilts.com

Please mark
your votes as
indicated in [X]
this example

FOR WITHHELD
The Board of Directors recommends a vote FOR ALL FROM ALL
NOMINEES NOMINEES
ELECTION OF DIRECTORS [ ] [ ] In their discretion, the proxies are authorized
Nominees: to vote upon such other business as may properly
come before the meeting.
Frederick A. Brunn M. Mark Michalko
Chan Kien Sing Ng Foo Leong
Theodore A. Johnson Martin J. O'Meara, Jr.
Alain K. K. Lee

[ ]
--------------------------------------
For all nominees except as noted above

Signature(s) Date
---------------------------------------------- ----------------
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE