Iipay Nation of Santa Ysabel

California Sues Iipay Nation over Real-Money Online Gambling Offerings

The state of California has wasted little time in filing a criminal complaint against the Iipay Nation of Santa Ysabel, also known as Santa Ysabel Band of Diegueno Mission Indians, over the launching earlier this month of real-money online gambling products.  The state has also asked for a temporary restraining order in hopes of immediately suspending the online gambling being offered by the Iipay Nation pending further resolution of the claims in the case.

The lawsuit names as defendants the entire Iipay Nation of Santa Ysabel, Santa Ysabel Interactive (the “tribal economic development entity” overseeing the online gambling offerings), and six specific Santa Ysabel defendants — David Chelette, David Vialpando, Anthony Bucaro, Michelle Maxcy, Virgil Perez and Brandie Taylor.

Chelette is the former manager of the Santa Ysabel casino who is now listed as the president of Private Table.com.  Vialpando is the chairman of the Santa Ysabel Gaming Commission, which oversees the tribe’s offerings; Bucaro and Maxcy are also listed as officials of the tribe’s gaming commission.  Perez and Taylor are the Santa Ysabel tribe’s chairman and vice-chairman, respectively.

The actions, filed on Tuesday in US District Court for the Southern District of California, allege that the real-money gambling offered by the Santa Ysabel nation violates several different laws, including the Indian Gaming Regulatory Act (IGRA) and the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA).  The complaint alleges that the tribe launched its real-money online bingo on or about November 3rd of this month, and that because of the “far-reaching and immediate effects on million of Californians,” a temporary restraining order is necessary.

iipay-nation-santa-ysabel-gaming-commission-logoThe Iipay Nation’s launching of real-money bingo was itself something of a curveball, after the tribe had this summer initially announced its plans to offer real-money online poker, following several years’ of failure on the part of California legislators to approve intrastate online poker for California residents.  The Iipay Nation moved forward with its plans while asserting that in its view, the offering of such games was already legal, and need not be approved by the state’s legislature, which has IGRA-driven gambling compacts with dozens of California tribes governing other forms of gambling.

The Iipay Nation has not, to date, launched its real-money online poker site, though it has launched a play-money site (available at PrivateTable.com).  Instead, after unexplained delays, the tribe moved forward with real-money online bingo instead, which the state authorities are quickly seeking to halt.

In its motion for a TRO, the California Attorney General’s office asserts that the real-money bingo product, which is available to all Californians aged 18 and above, regardless of specific location within the state, is a form of Class III gaming as defined under IGRA and is thus illegal to be offered to off-reservation gamblers.  Wrote the state, “The Tribe’s self-proclaimed ‘groundbreaking’ efforts to make Internet gambling available to Californians ‘anytime & anywhere’ breach the tribal-state class III gaming compact between the Tribe and the State, do not comply with [IGRA], and violate [UIGEA].”

The Iipay Nation had previously offered real-money gambling at the Santa Ysabel Resort and Casino, located on the tribe’s reservation in the mountains northeast of San Diego, under an IGRA-governed compact signed by the tribe and state back in 2003.  That casino failed last year, however, outgunned by larger casinos more convenient and accessible to the San Diego area.  The casino’s bankruptcy and failure has left the Iipay Nation tens of millions in debt.

Though the Santa Ysabel tribe has argued that its offering of online gambling is legal and permissible under IGRA, the state contests the tribe’s claim in its filings.  Instead, according to the motion for the restraining order, the online offerings violate a section of the existing gaming compact that defines the games that can be offered, “provided that the [Tribe] will not offer such games through use of the Internet unless others in the state are permitted to do so under state and federal law.”

The state also argues that both the state of California and the US federal government have expressly failed to authorize such gambling activity to date.  The age-18 minimum is itself a violation, according to the state, because existing California tribal compacts mandate an age-21 minimum.

The state’s filing also introduces a new term to the legal debate, arguing that the online bingo currently being offered is indeed a Class III game and governed by IGRA because it is a “facsimile” of live real-money bingo games.  The state also makes a novel argument regarding location, asserting that the bingo wagering takes place at both the tribe’s server and each player’s physical location, contrary to the tribe’s claims.

The state of California also wrote in its filings that it was aware of the Iipay Nation’s July proclamations regarding the potential offering of real-money online poker to California residents.  “In July 2014,” according to the TRO filing, “information appeared in the gaming press and gambling blogs that the Tribe intended to ‘launch real money online poker‘ in California within a short time.  Links to two industry reports, not including FlushDraw’s three stories on the tribe’s offering before this update, were included as evidence in the state’s filing.

The initial announcement spurred the state’s AG office to seek a meeting with the Santa Ysabels, and the state now claims that the tribe refused to meet to discuss the matter.  “On July 14, 2014, the State sent a letter requesting that the parties meet and confer concerning whether the Tribe’s planned Internet gambling materially breached the Compact.  That letter also referred to Internet bingo….  The Tribe rejected the State’s request to meet and confer.”

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