Cda Tribe Sued Over National Lottery Plan New Jersey Firm Says Proposal Developed With Trade Secrets

A New Jersey company has filed a lawsuit seeking more than $200 million in damages from the Coeur d’Alene Indian Tribe, claiming that the tribe’s planned national lottery was developed with protected trade secrets.

Tribal leaders called it a “nuisance” and said it won’t stop the national Indian lottery, expected to start later this year.

“It’s a frivolous lawsuit without any merit,” said Dave Matheson, general manager for the Indian lottery.

The lawsuit was filed for Samuel Valenza, owner of Native American Services Inc., Moorestown, N.J.

It alleges Valenza shared his lottery concept with the Coeur d’Alenes in 1991, but tribal leaders later dumped his company and hired a Denver-based business to manage the lottery.

Valenza said he spent hundreds of thousands of dollars developing the plan.

Tribal attorney Ray Givens, Coeur d’Alene, said a 1993 contract between Native American Services and the tribe was not binding because it was not approved by the National Indian Gaming Commission.

The contract was signed two years ago by tribal leaders and Valenza. It stipulated that NASI would be paid 40 percent of gaming profits, or up to $367.5 million over seven years, to manage the lottery.

Valenza said he expects the Coeur d’Alene lottery eventually will gross up to $700 million per year.

The claim alleges the Coeur d’Alenes used “valuable, original and confidential trade secrets” from the New Jersey company to develop the game.

But Matheson said there was nothing innovative about Valenza’s proposal.

“I don’t think he brought any new technology or ideas to the concept,” Matheson said. NASI was let go, he said, because the company had trouble getting money for start-up costs.

The National Indian Gaming Commission in January approved a gaming contract between the tribe and Unistar Entertainment Inc., Denver.

The Coeur d’Alenes plan to start selling tickets in 36 states and the District of Columbia by the end of the year, using a telephone hookup and credit card sales.

Legal officers of several states where the lottery is planned have challenged the concept.