Battle over lucrative state lottery contract heads to court

by Bryan P. Sears, Maryland Matters
October 20, 2025

The battle over a lucrative contract to manage the state’s lottery systems is headed to court.

Attorneys for Scientific Games — which currently manages lottery gaming for the Maryland Lottery and Gaming Control Agency — are asking an Anne Arundel County Circuit Court judge to intervene in what it says is an unfair and illegal process that saw the company lose the contract, then be awarded a 10-year deal to continue, only to have that stripped away by the state last month in an effort to rebid the contract.

Lottery officials “cannot reject Scientific Games’ proposal directly, or indirectly by cancelling or modifying” the request for proposal, wrote lawyers for Rifkin Weiner Livingston, a firm that represented the company as lobbyists and now in the courtroom.

A lottery spokesperson declined comment Monday, citing the pending litigation.

The lawsuit, filed Friday afternoon, asks a judge to order lottery officials to move forward with its recommendation to award Scientific Games the contract. It also seeks to bar the state from rebidding the contract while Scientific Games appeals the Sept. 25 lottery commission vote that stripped it of the company of being the recommended bidder.

The company also asked a judge to rule that lottery commission officials violated a code of conduct and the Maryland Open Meetings Act.

At issue is a tortured yearlong bidding process that initially saw Scientific Games supplanted by its biggest competitor, Duluth, Georgia-based Intralot. That recommendation by the lottery agency was later upended when Intralot’s bid was disqualified for failing to meet minority business requirements and Scientific Games, the second-place bidder, was then recommended for the contract.

The 10-year deal to manage and monitor the lottery’s gaming systems, including terminals, is lucrative, worth hundreds of millions to the state as well as the winning bidder.

US DOT calls for end to race- and sex-conscious programs in Key bridge rebuild

Intralot appeared to be the winner in July, with a $260 million bid that was considered $110 million less than Scientific Games, its nearest competitor. Scientific Games, which held the contract, argues that the gaming agency failed to consider the benefits of continuing with the company, which was exceeding revenue expectations for the state.

But lottery officials said at their July 15 meeting that Intralot had the edge, based on having the lowest price. The panel voted 5-1 to recommend Intralot as the winner.

That preliminary step still required ratification by the Department of General Services and the Board of Public Works. Within days, that preliminary approval was on shaky ground.

Six days later, lawyers for Scientific Games appealed the recommendation and filed a slew of records requests. It cited a flawed analysis gave Intralot the edge. On that same day, according to the Scientific Games court filing, it was determined that two of Intralot’s minority business partners — including Alyse Cohen, owner of Long Shots, an off-track betting and sports book in Frederick — had yet to be certified by the Maryland Department of Transportation.

“In short, Intralot knew or should have known that it was not a responsive offeror and was not qualified for the award,” lawyers for Scientific Games wrote in the lawsuit.

Lottery officials deemed the lack of minority business certification “not eligible for cure” and on Aug. 1 notified Intralot that its bid was determined to be “nonresponsive and not reasonably susceptible for being selected for award of this contract,” according to a letter Maryland Matters obtained in August under the Maryland Public Information Act.

The exact reason for disqualification is unclear: Most of the letter from lottery agency Procurement Director John Lloyd was blacked out.

In a post later on its website, Intralot announced that Maryland had withdrawn its contract award “based on the alleged failure to meet the minimum required percentage of subcontracting to local contractors.”

Lloyd notified Alpharetta, Georgia-based Scientific Games on Aug. 1 that it was now being recommended for the contract award. That letter was also obtained by Maryland Matters through the state public records act.

In court filings, Scientific Games’ lawyers suggest lottery officials reneged on a deal. Besides appealing the initial Intralot award to the Maryland State Board of Contract Appeals, attorneys for Scientific Games also sought records under the state public information act.

Scientific Games said it was contacted by an attorney for the lottery agency on Aug. 1, asking if the company would withdraw its appeal and records request if the agency rescinded the award to Intralot and recommended Scientific Games.

Scientific Games officials agreed to the deal, and lottery officials rescinded the offer to Intralot, which followed with an appeal of its own.

Before that appeal could be heard, the lottery commission met on Sept. 25. And while it was not advertised on its agenda, the panel took up the issue of the contract recommendation for Scientific Games.

After meeting in closed session for more than 90 minutes, commission Chair Everett D. Browning Sr. acknowledged the decision by Lloyd to reject Intralot’s proposal as non-responsive. The commission then voted 4-3 to withdraw the Aug. 1 offer to Scientific Games.

Scientific Games’ lawyers alleged that Browning communicated with Intralot lobbyists outside the public eye, and failed to publicly disclose those communications. Browning should have recused himself from the Sept. 25, lawyers said in court filings, which they say would have changed the outcome of the vote.

“Thereupon, the commission arbitrarily, capriciously, pretextually, without a scintilla of evidence, and with no finding of fact, in a four to three vote, denied the award to Scientific Games, breached its representations and warranties, and failed to comply with written agreements,” lawyers for Scientific Games wrote in their court filing.

Maryland Matters is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Maryland Matters maintains editorial independence. Contact Editor Steve Crane for questions: editor@marylandmatters.org.