Iipay Nation of Santa Ysabel

Santa Ysabel Publishes White Paper, Asserts California Lacks Jurisdiction in Ongoing Case

The Iipay Nation of Santa Ysabel has published a white paper highlighting the core points behind the tribe’s continuing battle to offer Internet-based gaming in California, in the wake of last year’s brief online gambling offering that was quickly shut down via injunctions obtained by California and US federal authorities.

iipay-nation-santa-ysabel-gaming-commission-logoThe six-page white paper, published in advance of the important B2B GIGse (Global iGaming Summit & Expo) to be held in San Francisco later this month, declares in its introduction that the state of California has stepped outside its “legal dominion” in continuing to block the tribe’s attempts to operate online gaming — bingo and poker — that is available to California residents.

According to the intro:

“Legal Internet Poker is at stake in a watershed case as the State of California steps outside of their legal dominion in an attempt to curtail the Santa Ysabel Tribe’s interactive gaming plans.”

— Tribal Internet Gaming / Santa Ysabel Interactive: A Case Study in Changing Paradigms

The paper was authored by David Vialpando, the chairman of the Santa Ysabel Tribal Gaming Commission, and David Chelette, the president of Santa Ysabel Interactive (SYI).   Vialpando and Chelette are two of the six individual tribal officers, in addition to various Santa Ysabel corporate entities, that were named by the state of California in its lawsuit brought to stop the tribe’s online-gambling offerings.

Santa Ysabel Interactive, for its part, is the specific entity that launched the tribe’s online offerings last November after announcing them last July.  Real-money online bingo was briefly available at SYI’s DesertRoseBingo.com offering, while real-money online poker was announced for but never actually offered at the tribe’s separate PrivateTable.com site.

The paper continues the Santa Ysabel’s tight focus on whether online poker and online bingo are Class II or Class III gaming, as defined under the terms of the 1988 Indian Gaming Regulatory Act, or IGRA.  In turn, IGRA is the law that opened the legal door within the US that has since allowed hundreds of tribal-operated casinos to open their doors.

The Class II-v.-III debate focuses entirely on language within IGRA dictating that Class II gambling such as bingo and poker becomes Class III when done remotely, via electronic transmission.  The exact wording, however, predetermines technical language of the Internet era, meaning that when the battle goes to a high-level US court (as it almost surely will), the trial judge and later appellate courts will likely be charged with deducing the original intent of the US Congress when IGRA was drafted and encated.

Meanwhile, the Santa Ysabel officials have accused California authorities of trying to have it both ways.  In the SYI white paper, the tribe asserts that California wants online poker and bingo to be declared as Class III gaming for the purposes of the lawsuit.  However, the tribe says that in legislation currently pending before the state to regulate California online poker, the state must claim that online poker is Class II, instead of Class III.

The crux of this argument is vital, according to the tribe.  According to the Santa Ysabels’ stance, the state must avoid trying to regulate online poker entirely, or risk voiding all of its existing casino compacts with California tribal nations, at the loss of hundreds of millions of dollars in state revenue.

Continuing from the SYI white paper, the authors believe that if the state wins in its case, then only the state’s tribal nations will be allowed to offer online poker.  That means no card rooms with online sites (such as Commerce, Hawaiian Gardens or the Bicycle Casino), nor any of the state’s pari-mutuel facilities, which are also seeking entry into the potential new market.

Taken directly from the SYI white paper:

As currently proposed, the emphasis in the pending legislation is on offering Internet poker, whether the bills are AB 9 and AB 167, or the newest entrants into the fray, AB 431 and SB 278. The bills either define or allude to the activity as being Class II gaming. Now this distinction means nothing outside of a tribal reservation, but it is important when the State considers allowing cardrooms and other non-tribal entities to participate in the activity. Tribal-State gaming compacts provide that in exchange for revenue-sharing payments, tribes in California will have exclusivity in California with regard to offering Class III gaming, in the form of traditional slot machines, to California consumers.  No one else in California can offer these types of games for profit.

Any proposed Internet gaming in the State, if non-tribal entities are allowed to participate, must be defined as Class II gaming. Otherwise, Class III gaming exclusivity provisions in the sixty-plus gaming compacts in the State are null and void, and tribes would be free to cease their revenue-sharing payments derived from their Class III gaming operations. …

The SYI white paper sums up the above elsewhere in the same brief, while also declaring that each of the four online-poker bills currently being considered by the state is a loser for political reasons as well:

The State of California is now poised to consider enacting legislation to authorize state-licensed interactive gaming to the state’s citizens, but the construct of the proposed legislation contradicts the state’s position that it has used in its legal attack against the small southern California Tribe [Santa Ysabel]. The state’s proposal is fraught with exclusionary language, the result of which has been to pit competing gaming interests against one another, including tribes against tribes, virtually guaranteeing gridlock and no state legislative action on this issue.

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