SBTech Lost First Round Of Legal Battle With Oregon Lottery

The Circuit Court in Oregon ruled against SBTech, stating that the contract terms with the lottery in the state should be disclosed in full.

The State Lottery Contract

SBTech, the provider of  the technology behind the online and retail sports book operations in Oregon, the Scoreboard, filed a suit to prevent the release of trade secrets and confidential information regarding the contract they signed in May 2019 with the Oregon State Lottery, after the state’s Attorney General had accept a request for public information from local news media, the Oregonian.

Back in 2019, SBTech won the contract with the state lottery amid suspicions that the company should be disqualified from applying for the contract due to having operations in countries where gambling is banned. Oregon lottery officials investigated these claims but could not find anything that gave ground for disqualification and hired the company to partner them with the sports book operations in the state.

Full Transparency Required

By that time local media outlet Oregonian/Oregon Live and Catena Publishing, a parent company of Legal Sports Report, filed public record requests, seeking to see the terms of the contract, and the lottery released a redacted copy, with section Exhibit 4 blacked out.

Lottery officials explained that some terms of the contract with SBTech prevented them from releasing some sensitive data, but after the two parties requesting the information appealed the lottery decision to the state Department of Justice, the Oregon State Lottery changed its stance and informed the technology provider company the contract would be released in full.

As a result, SBTech filed a suit against the lottery, claiming the release of the agreement would reveal “confidential and proprietary trade secrets and pricing systems that belong to SBTech” and would do irreparable damage to the company.

SBTech makes huge efforts to prevent that information from going public, during times when the company is closing a corporate merger with the Boston-based gambling operator DraftKings that will supposedly bring a huge payday for its owners, at least $650 million as the SEC filings indicate, but it is unclear whether the battle the company is involved is connected to the terms of the merger.

First Round Lost

Judge David E. Leith from the Circuit Court in Oregon, ruled that full disclose of the contract terms is a requirement of the law in the state, rejecting SBTech’s claim that “that the effective terms of this public contract, negotiated at arms’ length, constitute a trade secret”, adding that the court was unconvinced once pricing formulas had become part of such a contract negotiation they could remain confidential.

Following the court ruling, SBTech has been left with 30 days to appeal, and the redacted section of the contract that is being disputed will remain undisclosed until that period is passed without an appeal is being filed, or the result of the appeal.

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