## Facts

- Iipay Nation of Santa Ysabel, a federally recognized tribe in San Diego County, operated “Desert Rose Bingo,” an internet-based bingo product branded as part of “Desert Rose Casino.”
- The game was server-based; patrons played computerized bingo over the internet.
- Patrons, primarily California residents, registered online, funded accounts, selected game parameters, and initiated play by clicking a “Submit Request!” button.
- The computer servers and associated gaming equipment were located on the Tribe’s Indian lands.
- California law generally prohibits for-profit bingo and permits only limited charitable bingo.
- The State of California and the United States sued to enjoin the operation, alleging violations of the Unlawful Internet Gambling Enforcement Act (UIGEA) because bets were placed from California where such wagering was unlawful.
- The district court granted summary judgment for the State and the United States and enjoined continued operation; the Tribe appealed.

## Issues

1. Whether internet bingo with servers on Indian lands but patrons placing wagers while physically located off-reservation is protected as “gaming on Indian lands” under the Indian Gaming Regulatory Act (IGRA).
2. Whether, notwithstanding IGRA, the Tribe violated UIGEA by accepting payments connected to wagers initiated or made in California where those wagers were unlawful.

## Decision

- The Ninth Circuit affirmed summary judgment and the injunction against the Tribe’s operation.
- The court held IGRA’s protections are geographically limited to gaming activity occurring “on Indian lands” and do not cover a patron’s off-reservation act of placing a bet or wager.
- The court held UIGEA applied because patrons in California initiated and made wagers from California, where the wagers were illegal under state law.
- The court rejected the argument that locating servers on tribal land rendered the entire wagering transaction “on Indian lands” for IGRA purposes.
- The court concluded IGRA did not displace UIGEA; the statutes were read consistently, and UIGEA independently barred accepting payments tied to unlawful internet wagers.

## Legal Principles

- IGRA regulates and protects Indian gaming only to the extent the relevant gaming activity occurs “on Indian lands.”
- For internet wagering, legally significant gaming conduct includes the patron’s act of placing a bet; when that act occurs off-reservation, it is not “on Indian lands” even if servers are on tribal territory.
- Under UIGEA, “unlawful Internet gambling” turns on whether the bet or wager is unlawful in the jurisdiction where it is “initiated, received, or otherwise made.”
- A gambling business violates UIGEA by knowingly accepting specified financial instruments in connection with wagers that are unlawful where placed.
- IGRA does not immunize tribal operators from UIGEA liability for accepting payments associated with off-reservation wagers that are illegal under applicable state law.

## Conclusion

The Ninth Circuit held that patrons’ off-reservation internet wagers were not protected as “gaming on Indian lands” under IGRA and that accepting payments tied to wagers initiated and made in California, where such wagering was unlawful, violated UIGEA; the injunction against Desert Rose Bingo was affirmed.


State of California v. Iipay Nation of Santa Ysabel, 898 F.3d 960 (9th Cir. 2018)