A nearly yearlong battle over a lucrative lottery contract has landed the state’s gaming agency in hot water with the Maryland Board of Contract Appeals.
The gaming agency was sanctioned for repeatedly ignoring orders for records, the board said. A 16-page decision itemizes a lengthy list of ways the Maryland Lottery and Gaming Control Agency and its lawyers avoided turning over records to lawyers for Scientific Games Inc.
“Every step of the way, Respondent [the lottery agency] threw up roadblocks to Appellant’s right to discovery, obstructing access to documents to which Appellant was entitled but laying blame of noncompliance and delay at the feet of everyone else but the MLGCA — whether it be the Governor’s Office, DoIT [the Department of Information Technology], Appellant or even this Board,” the decision said.
“To add insult to injury, Respondent continued to pay lip service to the importance of a speedy resolution of the case despite failing to complete its long-overdue document production,” it said.
The board said it will now automatically assume that all documents withheld or not produced are favorable to the claims made by Scientific Games.
The sanctions handed down by the board also prevent the lottery agency from using records that should have been turned over to defend itself, and it bars the agency from calling witnesses who wrote or received any of the records involved that were not turned over to Scientific Games.
Representatives for the lottery and for the Office of the Attorney General, which represents state agencies, declined to comment on the order citing the ongoing nature of the litigation. Scientific Games also declined comment.
Scientific Games, which currently manages lottery gaming for the agency, is appealing a 2025 decision by the lottery to cancel a bidding process that saw the Georgia-based company recommended for the new contract after its chief competitor was first recommended and later disqualified.
As the appeals continue, the lottery agency remains unable to rebid the contract and Scientific Games continues to operate the lottery under the old contract. The current deal with Scientific Games expires in May, and will likely have to be extended since it could take more than a year to award a new contract and allow for a transition if a new company replaces Scientific Games.
The Board of Contract Appeals cannot award the deal to Scientific games.
The agency appeared close to recommending last summer that the contract be awarded to Intralot, a competitor to Scientific Games, based on price. The lottery commission does not award the contract — its vote is a preliminary step needed to send the contract to the Department of General Services and ultimately the Board of Public Works to award.
Scientific Games filed a challenge within a week, alleging that some minority- and women-owned businesses that were part of the Intralot bid had not completed the certification process. Scientific Games also sought a slew of records under the Maryland Public Information Act related to communications between the commission, lobbyists and the governor’s office.
Lottery officials later agreed that Intralot’s minority contractors were not certified — a flaw it said was fatal to Intralot’s bid.
Nearly two weeks later, Scientific Games agreed to a deal offered by attorneys representing the gaming agency to rescind the award to Intralot and recommend Scientific Games get the contract, in exchange for the company dropping both its challenge and records requests.
But when it came to a vote, the commission agreed Intralot’s proposal was nonresponsive. But it also, by a 4-3 vote, rejected recommending Scientific Games.
Scientific Games has since pressed forward with challenges both in court and at the Board of Contract Appeals.
The board’s ruling last week highlights its growing frustration with the gaming agency and its “recalcitrance … to its discovery obligations and compliance with the Board’s orders,” which the board writes “began out of the gate.”
Every step of the way, Respondent threw up roadblocks to Appellant’s right to discovery, obstructing access to documents to which Appellant was entitled but laying blame of noncompliance and delay at the feet of everyone else but the MLGCA — whether it be the Governor’s Office, DoIT, Appellant or even this Board.
– Order of the State Board of Contract Appeals sanctioning the Maryland Lottery and Gaming Control Agency
From the start, Scientific Games has alleged the lottery agency or its commissioners improperly communicated with lobbyists representing its chief competitor and potentially hundreds of records shared with the governor’s office. The company said the records it sought were key to proving its case. The contract appeals panel agreed.
Attorneys for the agency said many of the documents requested were protected by various privileges. The panel later privately reviewed documents on two occasions, ruling that only a handful was protected from disclosure.
Since then, the board in its sanction ruling noted that the agency and its attorneys repeatedly missed deadlines and failed to turn over records and a promised log of documents that were not disclosable.
The board, in its decision to sanction the lottery agency, said its “repeated failure and or refusal to comply … warrants sanctions.” It noted the unusual length of the case and the board’s rules that are designed to expedite appeals.
“Respondent’s initial refusal to comply with long-standing regulation foretold what was to follow throughout the remainder of these proceedings,” the board wrote.
The panel expressed frustration over the litany of excuses for the failure to comply. The blame, it said, rests solely with lottery officials.
“No matter who Respondent seeks to blame, there are only two parties to this litigation: Sci Games and MLGCA,” the board wrote. “Respondent is solely responsible for its own failure and/or refusal to obey the Board’s Orders even if satisfying its obligations may depend in part on the cooperation of third parties.”