898 F.3d 960
9th Cir.2018Background
- Iipay Nation of Santa Ysabel (a federally recognized tribe) operated Desert Rose Bingo (DRB), a server-based internet bingo game hosted on servers located on tribal land. DRB allowed California residents 18+ to register online, fund accounts, and play bingo remotely via web browser/mobile devices.
- Patrons selected denominations, number of cards/games, and clicked a "Submit Request!" button to place wagers; an on-site SYI employee served as a passive "proxy" while server software conducted the game and credited winnings.
- California and the United States sued after DRB launched; the district court issued a TRO and later granted summary judgment to the Government, enjoining DRB as violating the Unlawful Internet Gambling Enforcement Act (UIGEA).
- Iipay argued IGRA (Indian Gaming Regulatory Act) immunized DRB because the gaming activity occurred on tribal lands (servers) and thus was lawful under IGRA; the Government countered that patrons initiated bets off tribal lands, making the wagers unlawful under state law and therefore unlawful Internet gambling under the UIGEA.
- The Ninth Circuit reviewed de novo, held that patrons’ click to submit a wager constitutes a bet initiated off Indian lands (California), and that accepting internet payments for such bets violates the UIGEA even if the game’s servers were on tribal land.
Issues
| Issue | Plaintiff's Argument (Iipay) | Defendant's Argument (Government) | Held |
|---|---|---|---|
| Whether IGRA shields DRB from UIGEA | DRB’s "gaming activity" occurs on tribal lands (servers); off-site actions are pre-game/admin communications with a proxy, so IGRA applies. | The wager occurs when patron clicks "Submit Request!" in California; that is gaming activity off tribal lands and not protected by IGRA. | The court held the bet is initiated off tribal lands; IGRA does not shield DRB from UIGEA. |
| Whether DRB violates the UIGEA | UIGEA cannot override IGRA; UIGEA’s non-alteration clause means games legal under IGRA remain lawful. | UIGEA prohibits accepting internet financial transactions for bets unlawful where initiated or received; DRB accepts payments from California where bingo wagering is illegal. | The court held accepting internet wagers/payments from patrons in jurisdictions where gambling is illegal violates the UIGEA. |
| Location of the "bet or wager" for UIGEA purposes | The place of contract acceptance controls; the operative gambling conduct occurs on tribal servers. | The act of staking value (clicking Submit) occurs where the patron is located, so bets are initiated in California. | The court held the wager is initiated where the patron clicks (California), so UIGEA applies. |
| Relevance of tribe’s use of on-site "proxy" | Proxy designation renders patron actions administrative; gaming still occurs on tribal lands. | Proxy is passive; patron’s internet action is a wager or fund-transfer instruction subject to UIGEA. | The court held the proxy argument fails: either way UIGEA governs and DRB’s operation violated it. |
Key Cases Cited
- Phoenix Mem'l Hosp. v. Sebelius, 622 F.3d 1219 (9th Cir.) (standard of review for summary judgment and statutory interpretation)
- AT&T Corp. v. Coeur d'Alene Tribe, 295 F.3d 899 (9th Cir. 2002) (addressed extraterritorial tribal lotteries and standing/NIGC approval issues)
- Michigan v. Bay Mills Indian Community, 134 S. Ct. 2024 (2014) (IGRA protects gaming on Indian lands; administrative/off-site actions are not "gaming activity")
- County of Yakima v. Confederated Tribes & Bands of Yakima Indian Nation, 502 U.S. 251 (1992) (ambiguities in statutes construed in favor of tribes)