Montana auditors say Lottery officials blocked access to emails tied to vendor negotiations

Montana Lottery Director Bob Brown allegedly declined to let legislative auditors see his emails about contract talks with Intralot, the lottery's largest vendor, the Legislature's audit division reported last week.

The audit also named the Department of Administration, which oversees the lottery, and Gov. Greg Gianforte's office as blocking auditors from information tied to the negotiations, according to the Montana State News Bureau. David Singer, an analyst with the audit division, told the Legislative Audit Committee on Friday that auditors review emails to rule out conflicts of interest in contract deals. The report did not say auditors found one.

Sen. Tom McGillvray, R-Billings, pressed Brown at the hearing. "Can you give me a good reason why Lottery obstructed — and I use that word purposely — access to email so we can review those and make sure that everything was transparent and accountable?" he asked.

Brown said he had opened his inbox except for messages the lottery's lawyers had labeled confidential and privileged. "I didn't make those as confidential and privilege, somebody else did that. That was from our legal sending me information," he said. McGillvray wasn't satisfied. "It's a public email account; it should be disclosed," he said.

The fight goes back to 2024. The lottery's citizen commission voted unanimously that September to put the contract out to bid, but Brown kept negotiating directly with Intralot after the company made an unsolicited offer. Commissioners openly wondered whether a "sweetheart deal" was in the works. Lawmakers threatened to withhold the agency's funding, and the contract went to a public bid in 2025.

Intralot won again, at a lower price.

Auditors estimated the difference at roughly $17.6 million over the seven-year contract. Lottery officials told the audit division they didn't recall how the unsolicited offer arrived outside the bidding process. On Friday, Brown took responsibility for pausing the bid. "To move forward and fully explore the unsolicited offer was a choice I made, with input from a lot of people, but that was my choice to fully explore that because I believed it was the right thing to do for the people of Montana," he said.

A separate report from the same office, a financial audit of the lottery released in June, shows how much of the operation runs through Intralot. The old contract paid the company 8% of net weekly lotto and scratch sales plus 40% of gross gaming revenue from Sports Bet Montana. Auditors called the lottery's failure to get an annual independent controls report on Intralot's systems for fiscal 2024 a material weakness, since Intralot's data feeds the lottery's books for ticket sales, prizes, and commissions. The lottery told them its contract now requires that report every year.

That audit put the lottery's fiscal 2024 net ticket revenue at $154.2 million, with $109.2 million, or 70.8%, going to prizes. On scratch-offs alone, Montana players get less back than almost anywhere. Its active scratch games average a 60.7% payout, second-lowest of the 42 state lotteries that publish payout figures and well under the 69.3% average across them. Where each dollar of a ticket goes is broken down here.

The governor's office said in an email that its staff took part in audit interviews as requested. It did not answer questions about what information it kept from auditors or whether it dealt directly with Intralot before the bid. Intralot has never appeared at a public hearing, through its own staff or its registered lobbyists.

Sources

Helena Independent Record: Montana Lottery director shielded emails amid questions over contract negotiations

Montana Legislative Audit Division: Financial audit of the Montana State Lottery, report 24-30