CARLSBAD, CA (December 19, 2006) — INTERNATIONAL LOTTERY & TOTALIZATOR SYSTEMS, INC (OTCBB:ITSI) has successfully installed and launched the operation of its advanced DataTrak on-line gaming system in The Philippines. The system replaces an earlier ILTS on-line lottery system, which has been in operation since 1995 and includes the new, modular ILTS Intelimark FLX touch screen lottery terminals.

The new DataTrak system is operated by Philippine Charity Sweepstakes Office (PCSO), who leases it from Philippine Gaming Management under an equipment lease contract. PCSO was established over 70 years ago by an act of the Philippine Congress. PCSO operates under the office of the President for the purpose of raising funds for charity and by their charter are the only body allowed to operate sweepstakes and lotteries in the country.

The ILTS DataTrak system performs all functions required for efficient management, accounting and control of the on-line system, and delivers new functionality, including extensive support for marketing programs through rapid modification of current games, speedy development of new games, and a wide selection of promotions for on-line and instant games, coupons, merchandise, retailer and player incentives and commercial tie-ins.

The carefully planned and professionally executed implementation and conversion project led to an efficient and orderly transition for both the Lottery and retailers. The new DataTrak on-line gaming system was designed to support a large terminal base and to handle virtually any transaction volume with ease. The system ensures speed, reliability and security for all lottery transactions.

The statements in this press release which are not historical facts are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth or implied by forward¬≠looking statements. These risks and uncertainties include the absence of significant contract backlog, the dependence on business from foreign customers sometimes in politically unstable regions, political and governmental decisions as to the establishment of lotteries and other wagering industries in which the Registrant’s products are marketed, fluctuations in quarter-by-quarter operating results and other factors described in the Registrant’s Annual Report on Form 10-K for the year ended April 30, 2005.