A heated battle over public records reached the boiling point last week when a company working for the Oregon State Lottery obtained a temporary restraining order blocking the release of its contract with the state to The Oregonian/OregonLive.
Public agencies routinely make contracts with vendors available to the press and the public because they detail the spending of public money.But SBTech, a Malta-based company which runs the lottery’s new sports betting operation, has fought the dissemination of its contract almost from the day it was hired last spring.
Despite an order from Oregon’s attorney general that the contract must be disclosed, the company filed an extraordinary lawsuit on Jan. 10 against the lottery, its director Barry Pack, the Oregon Department of Justice, and Attorney General Ellen Rosenblum as well as The Oregonian/OregonLive.
Oregon’s largest newsroom and a gaming industry trade publication set off the current legal fight when they both filed public records request with the lottery asking for the SBTech contract.
The company’s hard-nosed strategy to fight disclosure worked, at least in the short term, when it got the temporary restraining order last week. SBTech will return to the Marion County Circuit Court Wednesday in hopes of convincing Judge David Leith to extend the temporary restraining order into a preliminary injunction.
The company said release of the agreement would reveal “confidential and proprietary trade secrets and pricing systems that belong to SBTech.” Disseminating the document would do “irreparable harm” to the company, it said in court filings.
The Oregonian and gaming industry trade publication LegalSportsReport both filed public records requests for the contract last spring.
In response, the agency released a heavily redacted copy that blacked out all information about how much the state lottery was paying SBTech and other costs to the lottery.
Lottery officials said they were bound by the terms of their contract with SBTech, which gave the contractor the right to demand that certain information remain private. Lottery spokesman Matt Shelby said it’s a “weird” feeling for the agency to be sued by one of its most important contractors. But it’s not entirely surprising, he added.
“SBTech is a private company in a really competitive environment,” Shelby said.
The Oregonian/OregonLive and Catena Publishing, parent company of LegalSportsReport, appealed the lottery’s decision to the state Department of Justice. The agency sided with the media outlets and said the lottery must release the document.
At that point, the lottery notified SBTech that it would release the entire contract. But SBTech continued to fight. It filed its wide-ranging lawsuit on Jan. 10. Among the defendants is Pack, the head of the state lottery and one of SBTech’s most ardent supporters.
For reporters, the lottery’s refusal to release details of the SBTech agreement has been mystifying. Eric Ramsey, a long-time gaming industry reporter for LegalSportsReport, said he’s routinely gotten similar information from other states.
“I’ve never seen anything like this,” Ramsey said. “It really set off alarm bells. It should not be this difficult to get an accounting of where these dollars are going.”
The lottery hired SBTech to run its new sports betting game. The company was always a bit of a mystery. While based in Malta, it also has connections to the Isle of Man, both notorious tax havens. Most of SBTech’s operations are in Bulgaria.
Oregon was one of its first clients in the U.S.
Critics alleged SBTech should be disqualified from the Oregon contract because it ran sports betting operations in countries that had banned gambling.
The lottery went ahead and hired SBTech. Together they started up Scoreboard, the lottery’s sports betting operation, in October.
Before SBTech was hired, Investigators for the Oregon State Police conducted a review of the company. They traveled to Bulgaria as part of that review. Later, OSP investigators presented the lottery with their findings.
The Oregonian/OregonLive requested copies of that document at the same time it requested copies of the SBTech contract. The lottery has not provided that document either.