Gaming supplier SBTech is so far losing the battle against transparency in Oregon sports betting.
A Circuit Court judge last week ordered the company to disclose the terms of its sports betting contract with the state lottery. In a short 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 in pertinence.
The lawsuit arose from separate public records petitions initiated last year by Legal Sports Report and The Oregonian. The state’s Department of Justice initially granted both requests, leading SBTech to sue in an attempt to prevent disclosure. Both media outlets are listed as defendants, as are the Oregon Lottery and the DOJ.
For at least 30 days, however, the state will continue to withhold the contract pending a potential appeal by SBTech.
Judge orders SBTech contract disclosed
Judge Leith’s ruling begins by establishing the facts, including a mention of the US Supreme Court decision in 2018 to repeal PASPA.
The Oregon Lottery started seeking a supplier for sports betting in early 2019, leading it to a monopoly partnership with Malta-based SBTech. Such contracts with public agencies, the defendants argued, are subject to disclosure as a matter of public interest.
The judge agreed, ordering the lottery to release an unredacted version of the Oregon sports betting contract. He further denied SBTech’s request for declarative and injunctive relief precluding disclosure.
Pricing terms not trade secrets
In its briefs, SBTech worked to convince the court that the pricing terms qualified for redaction for a number of reasons:
- As trade secrets
- As terms of a confidential bid
- In the public interest
Judge Leith rejected all of those arguments. Here are his findings on the issue of trade secrets, for instance:
The Court does not categorically preclude the possibility that a term of a public contract could be a trade secret in some circumstances, but a trade secret is not established in this case. The record reflects, and the Court finds as a fact, that the terms set out in Exhibit 4 were intensively negotiated. Those terms are not a secret of either party.
The judge further ruled that pricing terms within a bid do not retain their confidential status when they are “partially adopted — as amended through intensive, arms’ length negotiations — into a public contract.”
Early losses heighten public interest
Lastly, and perhaps most importantly, Judge Leith turned aside SBTech’s argument that disclosure would actually harm the public interest. To the contrary, he affirmed the defendants’ stance that public contracts are a matter of “significant public interest.”
Early losses and sharply revised projections for the fiscal year furthermore create concerns over where the proceeds are going.
The state has lost more than $2.3 million from its sports betting operations though January, despite net revenue exceeding $4.5 million. An updated forecast projects those losses to swell to $5.3 million by the end of the fiscal year.
“That interest is heightened,” explained the judge, “where the contract relates to an emerging market for gambling. The legitimate public interest is further heightened by the initial deficits Lottery has thus far experienced under the contract.”
The agency initially projected a win of more than $6 million.
SBTech has already revealed its intentions to appeal the ruling in a continued attempt to prevent disclosure.
SBTech v. Oregon DOJ, et al.
Here’s the full text of the ruling.
