Panama court voids electronic lottery operating contract
Panama's Third Chamber of the Supreme Court of Justice has issued a ruling with significant impact on the gambling sector by declaring null and void the regulations governing electronic lottery in the country. This judicial decision directly affects the continuity of the popular Lotto and Pega 3 games, nullifying Addendum No. 5 signed in February 2023 between the National Charity Lottery (LNB) and Scientific LLC, the successor firm to Scientific Games International Inc.
The magistrates' decision implies a legal reversion to the original contract signed in March 2013, invalidating the modifications that allowed the implementation of these electronic modalities. At the time, these games were introduced as complementary products to the traditional LNB offering, with draws scheduled for Tuesdays and Saturdays, and their commercialization was carried out through electronic devices operated exclusively by official lottery ticket vendors.
The legal process originated from a lawsuit filed by attorney Pedro Meilán, who questioned the transparency and legality of the contract extension. The plaintiff argued that it is not legally viable to extend a contract derived from a public tender if the current regulations do not explicitly contemplate such a possibility. According to the judicial ruling, the annulled addendum presented serious flaws, such as the unjustified extension of the contract's validity to 10 years, the alteration of the original contractual object, and the granting of unauthorized tax benefits.
This judicial setback coincides with the critical stance maintained by the Executive Branch regarding this business. In mid-2024, the President of the Republic, José Raúl Mulino, had already expressed his intention to eliminate the electronic lottery after considering that these products generated economic losses for the National Lottery's finances. With this new scenario, the LNB faces the obligation to evaluate the immediate operational effects of the ruling and determine the future of the relationship with the contractor under the strict terms of the law.
The nullification of this contractual modification opens a period of uncertainty for lottery ticket vendors and for the collection structure of the charitable institution itself. While the next steps are being defined, the fragility of public contract extensions that do not comply with the transparency requirements demanded by the highest court becomes evident, setting a significant precedent for future tenders and concessions of games of chance in Panamanian territory.
Tags: Panama, Lotto Panama, Pega 3 Panama, Panama Lottery, Panama electronic lottery