2012 annual report

14%
$259.0 $227.8 $178.9 $190.0 $201.3 $179.4 $163.0 $112.9 $84.8 $58.4
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

INCREASE IN TOTAL REVENUE Y-O-Y

19%
GAAP EPS REVENUE (millions) $0.09 $44 Q1FY11 $0.14 $60 Q2FY11 $0.17 $58 Q3FY11 $0.18 $66 Q4FY11 $0.14 $56 Q1FY12 $0.17 $66 Q2FY12 $0.18 $63 Q3FY12

ANNUAL EPS GROWTH *

$0.19 $74 Q4FY12

* Includes $2.2M in due diligence expenses associated with the terminated Ongame acquisition; normalized for those expenses, EPS grew 25% to $0.71 in FY 2012.

21%
ANNUAL OPERATING MARGIN *
UP 110 BASIS POINTS Y-O-Y
21.9% 21.8% 21.1% 20.3% 19.8% 22.3% 22.1% 16.1% Q1FY11 Q2FY11 Q3FY11 Q4FY11 Q1FY12 Q2FY12 Q3FY12 Q4FY12
* Includes $2.2M in due diligence expenses associated with the terminated Ongame acquisition; normalized for those expenses, Operating Margin was 22% for FY 2012.

16
CONSECUTIVE QUARTERS OF GROWING RECURRING REVENUE
million
Q4FY08

million
Q4FY12

$31.5

$20.2

to our shareholders
The Company will turn 30 this year. Looking back and reflecting on what it took to get to where we are today, I can only think of two words: passion and perseverance. These were evident in the early days of founder John Breeding as he worked tirelessly to perfect a shuffler prototype and toyed around with the math on a little game called Let It Ride. And these are evident as I watch our 830 employees around the globe continue to challenge the status quo and bring products to life that in some cases we never dreamed were possible. Passion and perseverance have resulted in who we are today: a unique Company with a diverse and intriguing team and a product portfolio unlike any I have encountered before in the gaming industry. And its that perfect composition of people and products that delivered yet another year of record financials, sustainable growth, and increasing momentum. Although we have been executing steadily on a strategic course, there generally is a story or a theme that defines each year. Looking back at the accomplishments and events of 2012, I believe the year was defined by the convergence of two themes: one of change and evolution, and one of legacy and tradition. This marks our first year as SHFL entertainment, and in many ways, the energy and excitement were generating feels like that of a startup company; like were building something new and the future is full of promise. At the same time, our team executed with the poise, discipline, and a thoughtful, customer-driven approach to innovation that only comes with three decades of perspective. Im very pleased to present SHFLs 2012 Annual Report, which documents a phenomenal year of delivering innovaton, improving execution, growing recurring revenue, generating substantial cash, and expanding our global footprint across all product categories.

what we achieved in FY 2012

Financial Highlights Record revenue of $259 million, up 14% year-over-year, fueled by strong performance in our Electronic Gaming Machine, Utility, and Proprietary Table Games businesses Recurring revenue is at an all-time high at $118.2 million, representing 12% year-over-year growth and demonstrating our commitment to grow our product lease base Diluted earnings per share (EPS) growth of 19%* Record Adjusted EBITDA of $87 million, up 17% year-over-year Record net income of $38.6 million Operating margin of 21%, up 110 basis points year-over-year* Inventory turns of 4.3x are the best in the Companys history SHFL is truly a global enterprise; international business represents 56% of total revenue Free Cash Flow** of $43.8 million Pristine balance sheet: zero net debt as of fiscal year-end
* Includes $2.2M in due diligence expenses associated with the terminated Ongame acquisition; normalized for those expenses, EPS was $0.71 and Operating Margin was 22%. ** Free Cash Flow is Adjusted EBITDA less capital expenditures and cash paid for taxes.

Operating Highlights The successful launch of the new MD3 card shuffler contributed $13 million in annual revenue The new DeckMate 2 card shuffler for poker debuted at the Global Gaming Expo (G2E) in October The Electronic Gaming Machine business generated $81.6 million in annual revenue, up 22% yearover-year Global expansion of the Electronic Gaming Machine business: approximately 440 and 170 placed in Asia and Latin America, respectively Approximately 1,200 total progressive upgrades by the end of the fiscal year, all on lease and contributing $7.5 million in recurring revenue Proprietary Table Games revenue grew 19% year-over-year; 92% is recurring New and improved Electronic Table System innovations Rapid Fusion and Widescreen for both Vegas Star and Rapid were unveiled at G2E Our intellectual property (IP) portfolio now consists of over 2,600 registered and pending patents, trademarks and copyrights Nine online demo versions of our renowned specialty table games available on playshfl.com Obtained Gibraltar, Alderney and Nevada iGaming licenses and established iGaming operational offices in Gibraltar Im very proud of the results SHFL achieved in fiscal year 2012 but Im even more excited for what lies ahead. I believe it is truly a new era for SHFL an era of opportunity for us and more importantly for our customers. Im confident that the potential upswing in global gaming growth over the next several years, coupled with our increasing momentum, new product pipeline, and focus on improving execution, present many opportunities for us. In 2013 and beyond, it is our intention to continue to do the things that keep SHFL profitable and propel growth, such as: Creating compelling gaming experiences for both land-based and online operations. Our IP portfolio is a testament to our ability to create, refine, protect, and acquire quality content. We can never stop innovating or slow down our pursuit for best-in-class games, technology and services. Strengthening and leveraging our operational capability. We will strive for greater synergies and continually look for ways to gain greater efficiencies in our businesses. Our recent acquisition of a content studio in China will assist us in scaling more efficiently to support our growing product footprint. Pursuing the strongest market opportunities. A huge part of our growth trajectory comes from expanding our global footprint with one, some, or all of our products. There are still so many markets where we are confident that we have opportunity for growth, such as the U.S., Asia, Latin America, Australia, and online. Growing recurring revenue. The fourth quarter of fiscal year 2012 marked the 16th consecutive quarter of recurring revenue growth and it is one of our proudest achievements. Our deep pipeline of shuffler replacements, new specialty table games, progressive upgrades, enhanced e-Table innovations, and our new iGaming products create meaningful recurring revenue opportunities for the future.

 Investing in our business to secure future growth. We will aggressively pursue and invest in areas where we believe we can secure meaningful recurring revenue, such as iGaming. We will always invest in R&D if we believe the opportunity is worth the investment. Similarly, exploiting the latest technology has become a hallmark of the SHFL brand. As CEO, I have one overarching objective and that is creating true value, which includes creating value for our customers with superior products, service, people and innovation. Thats the whole reason were in business because of our customers. I also have the responsibility of creating value for our shareholders and for our people. To accomplish that, I need to be laser-focused on delivering meaningful, sustainable growth. The points outlined above, such as investing in our business and broadening our horizons, are necessary steps to secure future growth. Pursuing new recurring revenue opportunities like iGaming, consistently evaluating M&A and cash uses, and building the infrastructure and the team to create a bigger and better presence for SHFL around the world, are all strategic pursuits of value creation. Looking ahead, weve set ambitious goals for SHFL and, as we have since 1983, we believe that well achieve them by leveraging the talent of our team, our robust IP portfolio, and our diverse product suite. With the collective commitment to the principles that have driven our success so far, Im extremely optimistic about whats in store over the next 30 years for SHFL. Please find the 10-K here. As always, thank you for your support.

Gavin Isaacs SHFL entertainment CEO

SHFL participated in the NASDAQ closing bell ceremony on June 7th, 2012 commemorating 20 years as a publicly traded company.

Forward-Looking Statements: This report contains statements that do not relate to historical or current facts, but are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can generally identify forward-looking statements by words such as may, might, will, could, would, should, expect, intend, plan, anticipate, believe, estimate, predict, potential, continue or other comparable terminology intended to identify performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Actual results could differ materially from those expressed or implied in our forward-looking statements, which are subject to inherent risks and uncertainties. A discussion of these and other risks and uncertainties may be found in documents filed by the Company with the Securities Exchange Commission, including the Companys current reports on Form 8-K, quarterly reports on Form 10-Q and its latest annual report on Form 10-K. The Company does not intend, and assumes no obligation, to update any forward-looking statements.

SHFL ENTERTAINMENT, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited)

Three Months Ended October 31, 2012 Revenue: Product leases and royalties Product sales and service Total revenue Costs and expenses: Cost of leases and royalties Cost of sales and service Gross profit Selling, general and administrative Research and development Total costs and expenses Income from operations Other income (expense) : Interest income Interest expense Other, net Total other income (expense) Income from operations before tax Income tax provision Net income Basic earnings per share: Diluted earnings per share: Weighted average shares outstanding: Basic Diluted 56,444 57,185 54,425 54,959 146 (297) (324) (475) 15,777 4,979 $ 10,798 $ $ 0.19 0.19 $ $ $ 206 (605) (493) (892) 13,513 3,799 9,714 0.18 0.18 $ $ $ 9,860 16,888 46,806 21,448 9,106 57,302 16,252 9,583 15,092 41,071 18,532 8,134 51,341 14,405 $ 29,549 44,005 73,554 $ 25,744 40,002 65,746 $ 2011

Twelve Months Ended October 31, 2012 110,279 148,768 259,047 37,713 56,196 165,138 77,439 32,180 203,528 55,519 $ 2011 98,369 129,402 227,771 34,089 51,127 142,555 68,609 27,628 181,453 46,318

575 (1,519) (115) (1,059) 54,460 15,854 38,606 0.69 0.68 $ $ $

635 (2,636) (997) (2,998) 43,320 11,730 31,590 0.58 0.57

55,884 56,628

54,344 54,997

management team

As CEO, I have one overarching objective and that is creating true value... for our customers, for our shareholders, and for our people.

gavin isaacs
chief executive officer

linster lin w. fox

executive vice president, chief financial officer & secretary

louis j. castle, II
chief strategy officer

roger snow
executive vice president & chief product officer

kathryn s. lever
executive vice president & general counsel

adrian halpenny
president - Australasia

deron hunsberger
senior vice president - sales

ken jolly
executive vice president - Asia

alexander grohs
managing director - Europe, Middle East & Africa

terri conway
senior vice president - talent

kim miramontes
senior vice president operations & administration

nathan wadds
senior vice president research & development

julia boguslawski
vice president - investor relations & corporate communications

shareholder information
CORPORATE HEADQUARTERS
SHFL entertainment, Inc. 1106 Palms Airport Drive Las Vegas, Nevada 89119 (702) 897-7150

BOARD OF DIRECTORS
Garry W. Saunders Chairman of the Board A. Randall Thoman Audit Committee Chairman John R. Bailey Governance Committee Chairman Daniel M. Wade Compensation Committee Chairman Eileen F. Raney Michael Gavin Isaacs

SECURITIES COUNSEL
Morrison & Foerster LLP 755 Page Mill Road Palo Alto, CA 94304 (650) 813-5600 Larkin Hoffman Daly & Lindgren Ltd. 7900 Xerxes Avenue S. 1500 Wells Fargo Plaza Minneapolis, Minnesota 55431 (952) 835-3800

REGIONAL HEADQUARTERS
SHFL Asia Unit B, 1/F, CAM Office Tower Avenida Wai Long Taipa, Macau +853 28 722 539 SHFL Australasia 1 Sheridan Close Milperra NSW 2214, Australia +61 2 9773 0299 SHFL Europe Wipplingerstrasse 25 A-1010 Vienna, Austria +43 1 25 35 500 100 SHFL Mexico Torre Esmeralda II Blvd. Avila Camacho No. 36, Piso 12 Lomas de Chapultepec, 11000 Mexico, D.F. +52 55 9171 1662

INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP 3800 Howard Hughes Parkway Suite 650 Las Vegas, Nevada 89169 (702) 691-5400

EXECUTIVE OFFICERS
Michael Gavin Isaacs Chief Executive Officer Linster (Lin) W. Fox Executive Vice President, Chief Financial Officer and Secretary Louis J. Castle, II Chief Strategy Officer Roger Snow Executive Vice President and Chief Product Officer Kathryn S. Lever Executive Vice President and General Counsel

TRANSFER AGENT & REGISTRAR

Wells Fargo Bank, N.A. Shareowner Services 1110 Centre Point Curve, Ste. 101 Mendota Heights, Minnesota 55120 (800) 468-9716

REQUEST FOR INFORMATION

SHFL entertainment, Inc. c/o Investor Relations 1106 Palms Airport Drive Las Vegas, Nevada 89119 (702) 897-7150 irelations@SHFL.com

Click here to view our 2012 10-K

1106 Palms Airport Drive Las Vegas, NV 89119

2013 SHFL entertainment, Inc. All rights reserved.