The Iipay Nation of Santa Ysabel has lost its appeal against a 2016 judgment that its online bingo operations illegally violated the Unlawful Internet Gambling Enforcement Act.
The decision by a panel of appellate judges from the US Court of Appeals for the Ninth Circuit effectively puts an end to the California tribe’s maverick online gambling ambitions.
In 2014, apparently exasperated by California’s failed attempts to legalize online poker, the Iipay decided to go it alone and announced the launch of a real-money poker site, PrivateTable.com, and an online bingo site, DesertRoseBingo.com.
The federally recognized 700-member tribe, situated about 45 minutes east of San Diego, was left around $50 million in debt after the closure of its doomed Santa Ysabel Resort & Casino earlier in the year and was eager to explore new economic opportunities.
While the poker site never saw the light of day, DesertRoseBingo.com was launched in November 2014. State and federal legal action swiftly followed, and an injunction took the bingo site offline until the matter could be resolved in the courts.
IGRA Versus UIEGA
The Iipay has argued it is permitted to offer online Class II gaming — such as poker and bingo — on tribal lands under the Indian Gaming Regulatory Act 1988 (IGRA) without special dispensation from the state — in fact, it claims it is its sovereign right.
IGRA, of course, predates the internet, so the crux of the case depended on whether the use of the internet to offer gaming from tribal lands meant gaming occurred on tribal lands. The case also examined the interplay between IGRA and UIEGA in the context of tribal online gaming.
The appellate panel noted in its ruling that UIEGA specially creates a system in which a bet must be legal both where it is initiated and where it is received.
End of the Road for Desert Rose
“The panel held that the Indian Gaming Regulatory Act protected gaming activity conducted on Indian lands, but the patrons’ act of placing a bet or wager on a game of Desert Rose Casino while located in California, violated the UIGEA, and was not protected by the Indian Gaming Regulatory Act,” the judges wrote.
The panel further held that even if all of the ‘gaming activity’ associated with Desert Rose Casino occurred on Indian lands, the patrons’ act of placing bets or wagers over the internet while located in a jurisdiction where those bets or wagers were illegal made Iipay Nation’s decision to accept financial payments associated with those bets or wagers a violation of the UIGEA.”
The tribe has not stated publicly whether it intends to take the case to the US Supreme Court, but there is little chance the court would even agree to hear the case.
For now, it looks like the Iipay will have to wait for California to legalize online gaming, an issue that has been debated in the legislature for the best part of a decade with little progress.