Tag Archives: uigea

Court Issues TRO Against California Tribe’s Online Bingo Efforts

Following up on our coverage here, on December 12 the US District Court for the Southern District of California issued a temporary restraining order against the IIpay Nation of Santa Ysabel’s internet bingo system.  The Tribe’s system sought to offer online bingo to customers located off of tribal lands.  Both the State of California and the DOJ have sued.  California has moved for an injunction, and it was only California’s request that the Court has acted on. California argued that the Tribe’s online bingo platform violates both the tribal-state compact and UIGEA.

The Court found that California has a likelihood of success on the merits of both of these claims.  As to the tribal-state compact claim, the Court analyzed whether the online bingo was considered Class II or Class III gaming under the Indian Gaming Regulatory Act.  IGRA defines bingo as a Class II game, and Class II games are regulated by the National Indian Gaming Commission and can be operated by a tribe without a tribal-state compact.  However, other gaming is Class III gaming and is allowed only under compact. The Tribe argued that its online bingo was a Class II game – bingo – using a technological aid.  The court noted that there is an analytical distinction between a technological aid for a Class II game or an “electronic facsimile” of a game – which would make the game a Class III game.  The Court rejected the tribe’s argument that online bingo constitutes a technological aid for a Class II game, instead concluding that the game being offered by the Tribe is a Class III game, which is not permitted by compact.

The Court concluded that although the breach of compact claim was enough to demonstrate that the state had a likelihood of success on the merits, it would still analyze UIGEA.  The Court noted that UIGEA requires consideration of the law both where a bet is made and where it was received.   The Court concluded that Indian gaming is permitted only on Indian lands, and therefore, reaching outside Indian lands would violate UIGEA.

The Court therefore enjoined the Tribe from offering any gambling game to anyone over the internet who is not present on the Tribe’s lands.  The Court further ordered the parties to confer as to expedited briefing as to whether a full preliminary injunction should be granted.

DOJ Seeks UIGEA Injunction Against California Indian Tribe

In early November 2014, the Iipay Nation of Santa Ysabel, an Indian tribe in California, began offering internet bingo over a website to patrons age 18 and older, regardless of whether they were located on tribal lands.  The State of California sued, claiming that the authority to offer online bingo off of tribal lands was not within the scope of the compact between the tribe and the state, was not permitted under California law, and violated UIGEA.  The tribe has stated its intention to expand beyond bingo and into poker.   The tribe has justified its activities by stating that it is authorized by IGRA to offer and regulate Class II gaming (poker and bingo) from its tribe.

Today, the Department of Justice filed its own lawsuit against the tribe, alleging that the tribe is violating UIGEA and seeking an injunction.  The DOJ argues in its complaint that the tribe is necessarily “engaged in the business of betting or wagering,” which is a UIGEA predicate.  As a result, the DOJ argues, when someone places a wager from outside tribal lands, the tribe is participating in “unlawful Internet gambling” as defined in UIGEA.  The DOJ argues that lotteries and bingo games are prohibited by California law unless authorized for charitable purposes, and that the bingo offered by the tribe is not a bingo game authorized for charitable purposes.  Accordingly, according to the DOJ, because the tribe’s gaming activities are not authorized by law, any gaming activity that crosses tribal lines violates UIGEA.

Because UIGEA relates primarily to payment processing, the DOJ seeks an injunction prohibiting the tribe from accepting any credit, EFTs, checks, or proceeds of other financial transactions to be used in any online bingo account by any patron.

This matter could ultimately be consolidated with the State of California’s lawsuit.  That case is set for a hearing on California’s motion for a temporary restraining order today (12/4) at 2:00pm Pacific.