Board of Contract Appeals sanctions Maryland Lottery agency

The Maryland State Board of Contract Appeals sanctioned the Maryland Lottery and Gaming Control Agency (MLGCA) on September 21, 2026. The board said the agency repeatedly failed or refused to comply with its discovery orders.

What is the dispute about?

Scientific Games filed two appeals on December 26, 2025, and February 4, 2026. The board merged them. In the appeals, the company challenges the procurement officer's decision to reject all proposals. It argues the decision was biased, arbitrary, capricious, unreasonable, or unlawful.

Scientific Games' theory: The agency preferred Intralot. Pressure from Intralot's lobbyists and the Governor's Office shaped the decision. The board has not ruled on those claims. It must still decide them.

How did the contract reach this point?

The agency appeared close to recommending Intralot last summer, based on price. Scientific Games filed a challenge within a week. It said some minority- and women-owned businesses in Intralot's bid were not certified. Lottery officials later agreed they were not.

Scientific Games then accepted an offer from the agency's attorneys. It would drop its challenge and record requests. In return, the agency would rescind the Intralot award and recommend Scientific Games. The commission instead found Intralot's proposal nonresponsive. It also rejected recommending Scientific Games by a 4-3 vote.

What did the board find?

The board said the agency failed to include a required document with its Agency Report. Scientific Games had to file a motion to compel.

The order lists further problems:

• The agency missed the April 18, 2026, deadline for document responses. It then produced three documents totaling 16 pages.
• It did not meet the May 27 production deadline. It cited State office closures, the Department of Information Technology, and the Governor's Office.
• It filed a petition for judicial review instead of complying with a June 24 order. It did not seek a stay until July 31.
• Three witnesses appeared with identical thumb drives. Agency counsel prepared them.

The board reviewed more than 100 documents in camera. It found only a handful protected. The board wrote that there are "only two parties to this litigation." It said the agency is solely responsible for its own compliance.

What are the sanctions?

The board ordered three sanctions:

• The board will draw an adverse inference. Withheld or unproduced documents are unfavorable to the agency's justification and favorable to Scientific Games.
• The agency may not rely on documents it should have produced but did not.
• The agency may not offer testimony from any witness who wrote or received those documents.

The board rejected other adverse inferences that Scientific Games requested. It also denied attorneys' fees. It said Scientific Games did not seriously pursue them or provide enough evidence.

What happens next?

The record remains open. The board said the new RFP leaves any documents of minimal value to Scientific Games. It quoted the agency's own counsel calling a win for the company "a pyrrhic victory."

Does the new RFP settle the matter? Not clearly. The board still has to rule on the merits. The current Scientific Games contract expires in May. Will it need an extension? Likely so. A new award and transition could take more than a year.

The agency and the Office of the Attorney General declined comment, citing ongoing litigation. Scientific Games also declined.