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.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.
