Lawmakers, DOA and gaming advisers spar over lottery contracting, RFP and an unintended procurement exemption

HELENA — Montana lawmakers pressed Department of Administration Director Misty Anne Giles on March 1 over why the planned Request for Proposals for the Montana Lottery’s next contract did not move forward after the incumbent vendor submitted an unsolicited extension offer.

The question centers on an unintended change to the Montana Procurement Act made in Senate Bill 51 that, when read together with existing lottery and university‑system procurement language, creates an exemption for some private contracts. Director Giles told the committee DOA discovered that drafting change and “informed director Brown” of the legal consequence; she said DOA asked the Lottery to examine the incumbent’s proposal before proceeding with an RFP so the commission would have “all the facts.”

Why it matters: the lottery contract is a large, capital‑intensive agreement that touches statewide equipment upgrades, possibly new gaming technology and tens of millions of dollars of state spending. Committee members and at‑least one lottery commissioner said the commission had voted in September to pursue an RFP and were surprised months later when a different path appeared in December. Lawmakers said the delay and mixed signals risk undermining the commission’s authority and the perception of a fair, competitive procurement process.

What Giles told the committee

Misty Anne Giles, director of the Department of Administration (DOA), described the sequence this way: DOA received an unsolicited proposal from the incumbent vendor a few weeks before a September lottery commission meeting. After reviewing the procurement code and the amendment adopted in Senate Bill 51, DOA concluded the bill language produced an unanticipated exemption that could allow the lottery to negotiate directly with a vendor instead of running an RFP. Giles said DOA asked the lottery director to “take a look at this” and present both options — pursuing an RFP or negotiating with the incumbent — so the commission would have procurement analysis before a final decision.

Giles told legislators that RFPs of this scale are costly and complex — she estimated a typical lottery RFP costs about $250,000 and can trigger litigation that increases time and expense — and said DOA’s role was to “dictate the how, not the what.” She added, “It is not DFA’s decision whether you do an RFP. Period. It's not my decision.”

Disagreement over authority and timeline

Several legislators, and Lottery Commissioner Metropolis, said the commission voted in September to proceed with an RFP and that the commission’s authority to require competition is clear in law. Commissioner Metropolis told the committee, “The commission is the boss at the lottery. It's not the lottery director,” and said he was “surprised” to learn a different track had been taken in December.

Giles acknowledged she did not attend the September commission meeting but said DOA had not received procurement analysis on the incumbent’s offer at that time and therefore asked the lottery director to consider the proposal before launching a costly RFP. She described the statutory language at issue as technical and said DOA supports walking back the exemption.

Unpaid problem‑gambling contributions and industry testimony

Scott Aspenlighter, chair of the Department of Justice’s Gaming Advisory Council, testified that Interlot (the incumbent sports‑betting operator named in committee discussion) had agreed in an earlier contract to contribute to Montana’s problem‑gambling services but stopped making payments in 2022. Aspenlighter said Interlot’s obligation had been about $44,000 per year and that “as of today, they sent $88,000 in arrears” to the state program. He argued that Interlot’s record of missed payments and limited responsiveness should be considered in any contract decision.

Senator Flowers and others asked staff to follow up with the lottery director to locate the contract language Aspenlighter referenced and to confirm whether Interlot is in arrears and whether the lottery has taken enforcement steps.

Legislative fixes and next steps

Committee members pressed whether the exemption in Senate Bill 51 was intentional. Giles said DOA worked on the bill as agency legislation to clarify the statutory distinction between employees and contractors but did not intend to create a lottery exemption. She said DOA would support reversing the unintended exemption; Commissioner Metropolis pointed to an introduced bill (Senate Bill 232) that aims to reverse the change.

Giles said Director Brown planned to present both the incumbent offer and the RFP path to the Lottery Commission in March so the commission would have “all the facts” to reaffirm or revise its September direction.

Committee context and cautions

Committee members repeatedly emphasized two concerns: protecting the integrity and competitiveness of a high‑value procurement, and ensuring the lottery commission’s explicit supervisory role is honored. Lawmakers also stressed speed; multiple members said a six‑month delay was too long and asked for clearer timetables and follow up from the lottery director and DOA.

Ending note

No formal vote or procurement decision was recorded at the hearing. Legislators requested follow‑up information and signaled interest in legislative language to remove the unintended exemption so the commission’s competitive authority is clear.