On December 12, 2014, Judge Anthony Battaglia of the U.S. District Court for the Southern District of California granted the State of California's Motion for a Temporary Restraining Order (TRO) against the Iipay Nation of Santa Ysabel Indian Tribe. The TRO enjoins the Tribe from offering any gambling over the Internet to persons not physically located on the Tribe's Indian lands and from accepting any funds from persons wagering over the Internet.

The crux of this dispute has been simmering since last summer when the Tribe announced its plans to launch a "real money" online bingo site. The site finally went "live" in early November and the State filed suit within a couple of weeks thereafter. The United States filed a similar suit seeking to shut down the Tribe's Internet activities in early December.

The Indian Gaming Regulatory Act (IGRA) classifies Indian gaming into three categories — Class I, Class II and Class III — with each category subject to a different degree of regulation. IGRA defines Class II games to include "the game of chance commonly known as bingo (whether or not electronic, computer or other technologic aids are used in connection therewith) ...." 25 U.S.C. § 2703(7)(A). Class II games may use technological aids; however, if the technology is deemed an "electronic facsimile", then the game is elevated to Class III status. The IGRA's classification system is at the heart of the dispute - how the Tribe's game is characterized determines whether it is classified as permissible Class II gaming subject only to Tribal regulation or Class III gaming prohibited by the Tribal-State Compact.

The State's Motion for a TRO alleges breach of the Tribal-State Compact and unlawful Internet gambling under the Unlawful Internet Gambling Enforcement Act (UIGEA). In opposing the TRO, the Tribe argued its online bingo operation is a "technological aid", using proxy technology to allow off-reservation patrons to place wagers exclusively on tribal lands. The State asserted the game amounts to an electronic facsimile in which the wagering occurs both where the wager is placed as well as where it is received. As such, the State contended the betting is therefore initiated off of Indian lands in violation of the UIGEA and California state law.

A party seeking a temporary restraining order or preliminary injunction must establish (1) it is likely to succeed on the merits; (2) it is likely to suffer irreparable harm in the absence of preliminary relief; (3) the balance of equities tips in its favor and (4) an injunction is in the public interest. After reviewing the game and both sides' arguments, the Court sided with the State, and concluded that the Tribe's online bingo operation is an electronic facsimile and therefore constitutes Class III gaming. The Court further found the UIGEA looks to the law both where the bet is made and where the wager is received. As a result, the Court determined that the State is likely to succeed on the merits of both causes of action. The Court also found that the State will continue to suffer irreparable harm while the Tribe's online bingo operation continues and that public interest mandates the shutting down of the Tribe's activities.

The Court specifically ordered and enjoined the Tribe from engaging in the following activities:

Offering or conducting any gambling, or game of chance, played for money, or anything of value, over the Internet to any resident of, or visitor to, California, who is not physically located on the Tribe's Indian lands.
Accepting any credit, or the proceeds of credit, extended to or on behalf of any resident of, or visitor to, California, who bets or wagers over the Internet in connection with any gambling, or game of chance, offered, or conducted, by Defendants. This includes credit extended through the use of a credit card.
Accepting any electronic fund transfer, or funds transmitted by or through a money transmitting business, or the proceeds of an electronic fund transfer or money transmitting service, from or on behalf of any resident of, or visitor to, California, who bets or wagers over the Internet in connection with any gambling, or game of chance, offered, or conducted, by defendants.
Accepting any check, draft or similar instrument which is drawn by or on behalf of any resident of, or visitor to, California, who bets or wagers over the Internet in connection with any gambling, or game of chance, offered, or conducted, by Defendants, and which is drawn on or payable at or through any financial institution.
The Court directed the parties to meet and confer within two weeks to agree upon a joint briefing schedule pertinent to an Order to Show Cause Hearing as to why the State's Motion for Preliminary Injunction should not be granted.

This is a reprint from jdsupra.com. to view the original, click here.