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Iipay did not provide any physical computer terminals located on its lands on which California residents could play DRB; instead, games were offered exclusively through the Internet. Participants needed to create an account with DRB, fund it, select the number of games and cards, and then click “Submit Request!” Within weeks of the launch of DRB in November 2014, the state of California and the federal government sued Iipay seeking injunctive relief prohibiting the tribe from continuing to operate the site. A district court issued a temporary restraining order as well as summary judgment in favor of the government. Iipay appealed. The case presented an issue of first impression regarding the intersection of two federal statutes, the Ninth Circuit explained: the Indian Gaming Regulatory Act (IGRA), which was passed to provide a regime for the regulation of gaming on Indian lands, and the Unlawful Internet Gambling Enforcement Act (UIGEA), which was enacted to regulate Internet gambling. Importantly, the UIGEA does not prohibit otherwise legal gambling, the court said, but it established a system where a “bet or wager” must be legal both where it is “initiated” and where it is “received.” If the court found DRB took place on Indian lands, then it would fall under Iipay’s jurisdiction and the UIGEA would not apply. Iipay argued that DRB was operated on its own lands because the servers—which determined the patterns on the bingo cards, drew the numbers and marked the cards—were located in its former casino. The government countered that the actual gaming activity—selecting the denomination and number of games and submitting the final request to play—happened elsewhere in the state. Under the UIGEA, “gambling” is the participant’s decision to wager money on the bingo game, the government told the court, which occurs off Indian lands. “We reject Iipay’s argument that the patron’s decision to submit a requested wager of a particular monetary denomination is merely a pre-gaming communication with the patron’s designated proxy,” the Ninth Circuit wrote, siding with the government.
For the original version including any supplementary images or video, visit https://www.manatt.com/Insights/Newsletters/Advertising-Law/Ninth-Circuit-Affirms-Illegality-of-Tribes-Online
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