Iipay Nation of Santa Ysabel Optimistic Despite Online Gaming Legal Defeat

Less than three weeks ago, California’s Iipay Nation of Santa Ysabel lost its legal tussle with the United States of America as US District Court for the Southern District of California Judge Anthony J. Battaglia ruled that the tribe, along with other defendants, violated the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) in launching a real money internet bingo site. This has already been reported, so that part is nothing new. What is interesting is that, according to Online Poker Report, the tribe still believes it will eventually win the day and will be able to offer real money online gaming, including online poker.

desert-rose-bingo-logoIn November 2014, the Iipay Nation of Santa Ysabel, located on the Santa Ysabel Indian Reservation about a 55 mile drive northeast from San Diego, launched Desert Rose Bingo, a real money online bingo site, for those who were at least 18-years old and located in California. As you may know if you have followed online gambling legal news the last few years, internet gaming is not legal or regulated yet in California, despite numerous attempts by lawmakers. The Iipay Nation, though, claimed that it could start Desert Rose Bingo, explaining on the Santa Ysabel Gaming Commission’s website, “In offering online gaming through Santa Ysabel Interactive, the Tribe is exerting its sovereign right under the Indian Gaming Regulatory Act (IGRA) to regulate and conduct Class II gaming from the tribe’s reservation.”

Class II gaming under IGRA includes both poker and bingo; the tribe also operated an online poker site called PrivateTable.com, but that was only for play money. House-banked games such as blackjack are categorized as Class III gaming, which requires a tribe have a compact with the state. The Iipay Nation of Santa Ysabel does have such a compact, but had no plans to launch an online casino at the time.

Almost immediately, both the U.S. and California filed separate lawsuits against Santa Ysable and were granted temporary injunctions. Desert Rose Bingo shut down after just a couple days. Last year, the lawsuits were combined and this month, Judge Battaglia ruled in the federal government’s favor and made the injunctions permanent.

In offering real money bingo – or at least attempting to do so – the tribe tried to claim that customers were using a “proxy” to access the games. “At no time is live bingo game action performed by the user,” it said in a press release. “This ensures that all game play takes place on Tribal lands, under the jurisdiction of the Tribal government and is in compliance with all applicable laws and regulations.”

Judge Battaglia wasn’t into that, though, writing:

When IGRA and UIGEA are read together, it is evident that the phrase “on Indian lands” was intended to limit gaming to those patrons who participate in the gaming activity while in Indian country. Were the Court to give IGRA the broad construction Tribal Defendants urge, under no circumstances would the United States be able to enforce UIGEA where some portion of the activity originates from servers located on Indian lands.

So the Iipay Nation of Santa Ysabel is done with all this online gambling silliness until future legislation allows them to offer it, right? Maybe not, the tribe says.

While the federal government won its case against the tribe, the judge tossed out a claim by California that Desert Rose Bingo was in violation of a compact between the tribe and the state, ruling that Class II gaming such as bingo and poker are permitted by IGRA and that the state has no say over what the tribe does with online bingo.

Thus, Santa Ysabel believes it could still re-launch both Desert Rose Bingo and Private Table. Joe Valandra, CEO of Great Luck Gaming, which partnered with Santa Ysabel in the bingo venture, told Online Poker Report, “It’s the first federal court ruling that recognizes what I would call the modern architecture of online gaming deemed to be Class II.”

“And he [Battaglia] gave deterrence to the tribal regulatory authority to make that decision. Those are two incredibly significant findings. If I were the tribes in California I would be rethinking my legal approach to iPoker,” he added.

“This ruling basically says tribal governments and state governments operate on the same, level playing field when it comes to regulating their business enterprises.”

Santa Ysabel Tribal Gaming Commission Chairman Dave Vialpando told Online Poker Report – if this wasn’t obvious already – that if they can do bingo, they can also do bingo, as both are categorized as Class II gaming.

Of course, it may be hard to convince a court that the dismissal of the state’s claim means that tribes could go forth with online poker and bingo when the judge also ruled that those services would be in violation of the UIGEA. Though Judge Battaglia already “gave deterrence to the tribal regulatory authority” to make its Class II online gaming decisions, he also didn’t really buy the whole “proxy” argument that because the servers were on tribal lands that the games were actually being played on tribal lands, as well. It is almost two conflicting messages.

In the meantime, Santa Ysabel is pondering whether or not to appeal the UIGEA ruling. Vialpando said it will probably “move forward,” as the tribe has already put a lot of money into the legal battle, so it might as well keep on going.

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