SBTech Playing Legal Hardball on Releasing Oregon Sports Betting Contract Details, Sues State, Oregonian Newspaper

Posted on: January 21, 2020, 10:40h. 

Last updated on: January 21, 2020, 11:42h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

SBTech, the provider of sports betting data and services to lotteries and gaming providers around the world, doesn’t want some terms of its contract with the Oregon Lottery revealed. It is suing the state and its largest daily newspaper to keep those details under wraps.

SBTech, Oregon Lottery’s sports betting services provider, is trying to keep some details secret and is suing the state and a newspaper to make that happen. (Image: NBA.com)

Last week, SBTech won a temporary restraining order against the attorney general’s office and The Oregonian newspaper, preventing the disclosure of the Isle of Man-based company’s contract with Oregon Lottery. Sports betting went live in the Beaver State in October with the debut of the lottery’s “Scoreboard” mobile app. The state’s tribal casinos also offer retail sports wagering locations.

Last year, the Oregonian reported that the state is expected to pay SBTech $26.8 million to run Scoreboard over the next three years. Those payments are reportedly broken out as $5.2 million in year one, $9.1 million in the second year, and $12.5 million in 2022.

Attorney General Ellen Rosenblum (D-OR) previously ordered that SBTech make the terms of its pact with the state available for public viewing. But on Jan. 10, the company filed an extraordinary lawsuit against the state, lottery director Barry Pack, Rosenblum, The Oregonian and the paper’s web property, OregonLive.com.

Tomorrow, SBTech returns to Marion County Circuit Court, where it will attempt to land a preliminary injunction from Judge David Leith. A preliminary injunction prohibits the involved parties committing an act, essentially preserving the status quo, until a court renders a final, binding ruling.

A representative from Roseblum’s office told Casino.org the attorney general can’t comment on pending litigation.

Contentious Battle Potentially Brewing

For its part, SBTech, which also has operations in Bulgaria and Malta, says that most of the details of its contract with Oregon Lottery have been revealed, and what it’s trying to keep from public view are proprietary trade secrets.

The majority of SBTech’s contract with the Oregon Lottery has already been publicly released,” said the company in a statement provided to Casino.org. “There is only a very small portion of the contract, containing SBTech’s pricing model, that SBTech would like to keep confidential, as that information constitutes company trade secrets.”

The company added that it’s obligated to protect its intellectual property, and that including Oregon Lottery in the suit is merely a procedural step.

SBTech is part of a yet-to-be finalized transaction involving DraftKings and Diamond Eagle Acquisition Corp. (NASDAQ:DEACU) that will see those firms merge, paving the way for the daily fantasy and sportsbook giant to become a public company later this year.

In the statement to Casino.org, SBTech said the legal wranglings in the Beaver State have “nothing to do with the DraftKings transaction.”

Plenty of Controversy

Unlike some other regions that used non-competitive, sole source bidding to determine operators for sports betting contracts, Oregon Lottery did entertain proposals to run Scoreboard from several parties in addition to SBTech.

However, one of the defeated bidders – Scientific Games – protested the decision to award the contract to SBTech, noting that Oregon arrived at that decision while it was still running a background check on the company.

The Oregonian/OregonLive and Catena Publishing, parent company of LegalSportsReport, were previously granted permission by Deputy Attorney General Frederick Boss to view the Oregon Lottery/SBTech accord.

Specifically, those petitioners are seeking an unredacted copy of Exhibit 4, which outlines fees and payments the lottery is to pay SBTech, according to a document provided to Casino.org by Rosenblum’s office. Boss signed off on allowing the parties to see Exhibit 4.