State of California v. Iipay Nation of Santa Ysabel

The Iipay Nation of Santa Ysabel (Iipay) (defendant) was a federally recognized Indian tribe with tribal lands in southern California. In November 2014, Iipay began operating Desert Rose Bingo (DRB), a server-based internet bingo game for California residents. To play DRB, patrons had to register with a website and create a funded account. Patrons could then select a monetary denomination of bingo game, the number of games and bingo cards to play, and a playback theme. Once those selections were set, patrons clicked a “Submit Request!” button, and the requested games played to completion. The State of California and the United States (collectively, the government) (plaintiffs) brought an action against Iipay, seeking an injunction to prohibit Iipay from offering DRB. The government asserted that Iipay’s operation of DRB violated the Unlawful Internet Gambling Enforcement Act (UIGEA). The UIGEA prohibited gambling businesses from knowingly accepting certain financial payments from people engaged in unlawful internet gambling, defined to include an internet bet or wager that was unlawful under the applicable law in the place where the bet or wager was initiated, received, or otherwise made. Iipay countered that the Indian Gaming Regulatory Act (IGRA), not the UIGEA, controlled Iipay’s operation of DRB. IGRA provided a regulatory framework for gaming on Indian lands and classified gaming into three categories. IGRA class II gaming, which included bingo games, could be conducted on Indian lands under tribal jurisdiction as long as certain regulatory requirements were met. Iipay thus contended that it could legally offer DRB, a class II bingo game, on Iipay tribal lands. The district court granted summary judgment for the government. The court found that Iipay’s operation of DRB violated the UIGEA because DRB patrons were located in California when they clicked “Submit Request!” to place bets or wagers on the game, and betting on bingo was illegal in California. Iipay appealed.