SBTech Ordered To Disclose Terms Of Sports Betting Contract With Oregon Lottery

Gaming provider SBTech lost yet another battle in an attempt to keep the terms of its Scoreboard sports betting contract with Oregon Lottery concealed from public view.

A Circuit Court judge ordered the Malta-based business to disclose the terms of its sports betting platform provider contract with the Oregon Lottery on Feb. 28.

In a brief ruling, the Hon. David E. Leith determined that SBTech could not withhold the portions of the agreement relating to fees and payments.

“[T]he Court is unpersuaded that the effective terms of this public contract, negotiated at arms’ length, constitute a trade secret,” wrote the judge. “[A] trade secret is not established in this case.”

The lawsuit arose from public records petitions initiated last year by Legal Sports Report and The Oregonian under the Oregon Public Records Law. The state’s Department of Justice granted the requests.

Citing the Oregon Uniform Trade Secrets Act, SBTech argued that revealing the full terms of its contract would expose the Malta-based company’s trade secrets and enable its competitors to replicate its models.

In response to SBTech’s concerns, Oregon Lottery disclosed the contract with substantially redacted sections relating to the partnership’s mutual obligations, including revenue sharing.

Upon petition from the interested media outlets, the state’s Attorney General reviewed the redactions and ruled that Lottery must disclose the contract in its entirety, in a letter dated January 3, 2020.

SBTech filed the current lawsuit to prevent that disclosure.

Court: Contract Is Matter Of Significant Public Interest

Judge Leith turned aside SBTech’s argument that disclosure would harm the public interest.

“Public contracts are a matter of significant public interest,” the judge wrote. “That public interest is heightened where the contract relates to an emerging market for gambling.”

In addition, Lottery’s early sports betting losses and heavily revised revenue projections for the year create additional concerns over the operation, said the Circuit Court judge.

“The legitimate public interest is further heightened by the initial deficits Lottery has thus far experienced under the contract,” Leith wrote.

Oregon Lottery launched its online Scoreboard sports betting app for iOS and Android on October 26, 2019.

Lottery’s Scoreboard operation has lost more than $2.3 million through January despite net revenue exceeding $4.5 million. Updated projections predict losses of $5.3 million by the end of the fiscal year.

The agency initially projected a win of more than $6 million.

The ruling instructs the state to continue to withhold disclosure of the unredacted contract for public review for 30 days to allow SBTech to file another stay.

SBTech has already stated that it intends to appeal the ruling in another effort to hold the contract terms confidential.

Oregon Lottery / SBTech Partnership

Oregon voters approved an amendment to the constitution to establish a state lottery in November 1984. The lottery is overseen by a five-member, governor-appointed commission.

Gaming legislation in Oregon gives a monopoly to Oregon Lottery. Lottery has the power to choose the types of games it can introduce without seeking legislative or voter approval.

The lottery opened bidding for a platform provider partner for its online Scoreboard sports betting endeavor in April 2019. The commission approved the lottery’s recommendation and awarded the contract to SBTech.

Scientific Games, one of the losing bidders, issued a challenge to the award, stating that SBTech was associated with illegal gambling operations overseas, but state investigators found no merit to the claim.

SBTech powers live sportsbooks in New Jersey, Pennsylvania, California and Mississippi, and is partnered with operators in additional states that are working to pass sports betting legislation, including Kentucky, Illinois, Florida, Louisiana, Ohio and Maine.