The Supreme Court of Justice (CSJ) declared the nullity of the contract in favor of the marketing company of the electronic lottery in Panama, known as Lotto and Paste 3.
The dealer is Scientific Games LLCa company that since 2013 had agreed a contract with the National Charity Lottery (LNB).
The Third Chamber of the CSJ, through a ruling adopted on April 13, decided that addendum 5 to Contract 2013(9)08 of March 13, 2013, which had extended the validity of the concession for 10 years, is null and void as illegal.
Despite the Court’s decision, the company is promoting the holding of a draw next Saturday, April 18.
Pedro Meilánthe lawyer who filed the annulment lawsuit, argued that the Lottery should have called a new public event, instead of automatically extending Scientific’s contract. This argument was supported in 2024 by the then Attorney General of the Administration, Rigoberto Gonzalez.
The contract was originally awarded for 10 years to the consortium Panama Lottery Technology Servicesmade up of Scientific Games International Inc. and Panama Scientific Gaming, SAon March 13, 2013, during the government of Ricardo Martinelli (2009–2014), administration in which the president José Raúl Mulino served as Minister of Public Security.
Changes in favor of the company
In principle, the contract was for the exclusive marketing of the instant lottery (scratch and win). Very soon modifications were made to expand its scope.
He September 24, 2013 The first addendum was signed, to allow the electronic or online lottery. In another addendum it was decided that the LNB would assume the advertising and marketing expenses. In total, there were five addendums. The last one is the one that has just been declared illegal by the CSJ.
With the fifth addendum, formalized on February 24, 2023, the validity of the contract was extended for 10 more years and the sale of the Lotto through ticket holders was allowed. In exchange, the LNB had to give the company 15% of gross sales.
There were not only profound changes in the concession, but also in the contractor core.
The Panama Lottery Technology Services consortium disintegrated and was replaced by Scientific Games LLCa limited liability company incorporated in DelawareUnited States, although its base of operations is in Alpharetta, Georgia. In Panama, they supposedly provide the service through a “branch.”
It has been registered in the Public Registry since March 23, 2022. The documents provided show that Patrick McHugh He holds all management positions: president, secretary and treasurer. Your resident agent in Panama is the firm Arosemena, Noriega & Contreras and as a “representative” he appears Javier Martínez.
Bargaining and teasing
When Mulino took office, in July 2024, he was quick to show his displeasure.
“This is business for someone, but not for the State,” he said on July 25, 2024. Incidentally, he reported that he had given instructions to withdraw the contract from the concessionaire.
However, Scientific Games LLC found a way to circumvent Mulino’s order: it filed an annulment lawsuit against the actions taken by the then director of the Lottery, Saquina Jaramillo. This legal maneuver allowed it to continue holding three draws per week (on Tuesdays, Thursdays and Saturdays).
Millions at the expense of the State
President Mulino calculated that the electronic lottery generated a weekly gross sale of $900,000, money that does not remain in the LNB coffers.
The advertising and marketing expenses of this business (almost $12,000 per week), although private, were assumed by the LNB, which also had to pay for the design and printing of the tickets.
The decision of the Third Chamber was adopted unanimously by the magistrates Gisela Agurto (speaker), Maria Cristina Chen Stanziola and Carlos Vasquez Reyes.
