A small California American Indian tribe and its online business partner want federal regulators to weigh in on a potentially landmark lawsuit with state and federal prosecutors over an online bingo website.
   
The Iipay Nation of Santa Ysabel and Great Luck LLC are asking the National Indian Gaming Commission (NIGC) to affirm the partnership is adhering to the Indian Gaming Regulatory Act (IGRA) in launching a bingo website taking off-reservation wagers.
   
Without NIGC action, tribal officials contend future determinations on the legality of gambling on Indian lands could be left to federal and state officials, seriously eroding tribal government sovereignty.
   
NIGC officials say they are investigating the Desert Rose Bingo website, which was shut down in December by a federal judge acting on a temporary restraining order requested by California Attorney General Kamala Harris.
   
Harris contends Desert Rose Bingo violates federal law, IGRA and a tribal-state regulatory compact.
   
Harris claims IGRA restricts gambling to Indian lands and that online wagers occur where both the gambler and server are located.
   
Santa Ysabel and Great Luck contend the web-browser-enabled bingo game is conducted by “proxy” players through an internet server on tribal land. Great Luck is not named in the complaint.
   
The partnership also claims online bingo under IGRA is a Class II game not subject to state jurisdiction and tribal-state gambling compacts.
   
Harris contends internet bingo is a “facsimile” of a Class III casino-style game subject to the compact.
   
The case is expected to wind its way through the 9th Circuit Court of Appeals.
   
The tribe has not yet been served in the U.S. Department of Justice case, which alleges the website violates the Unlawful Internet Gambling Enforcement Act of 2006. The DOJ does not allege a violation of IGRA.
   
“The NIGC is currently looking at the full range of IGRA compliance issues implicated by the gaming that was being conducted by Santa Ysabel and Great Luck,” NIGC spokesman Mike Odle says.
   
The NIGC investigation includes whether the partnership violates regulations requiring that most of the revenues go to the tribe.
   
“Our goal is to ensure that the regulatory requirements of IGRA are met and that the tribe is the primary beneficiary of the gaming activity,” Odle says.
   
Tribal and Great Luck officials say they adhere to IGRA sole proprietary guidelines. The tribe’s financially plagued 349-machine casino was shut down last year, putting 115 people out of work.
   
Odle says Santa Ysabel and Great Luck did not ask for a game classification opinion from NIGC prior to launching the website.
   
“Often, tribes will contact the NIGC for a game classification opinion prior to offering a new game,” he says. “The NIGC offers this assistance to avoid risk, uncertainty and costly litigation.”
   
Santa Ysabel Chairman Virgil Perez says the tribe is seeking affirmation from NIGC that Desert Rose Bingo is legal Class II gaming designed to conform with NIGC minimum internal controls and in accordance with an NIGC-approved tribal gaming ordinance.
   
“We are hopeful the NIGC will not stay silent,” Perez says.
   
The simmering dispute between the tribe, Great Luck and the NIGC strikes at growing sentiment among tribal officials and regulators that the federal agency needs to take a more proactive leadership role on internet gambling.
   
“Tribes are going to move on internet wagering. It would be much more beneficial if they could do it in conjunction with NIGC,” says Sharon House, counsel for the National Tribal Gaming Commissioners/Regulators. “Instead of making opinions to provide guidance, they wait until it becomes a real issue. By then the matter is too far gone.”
    
NIGC officials did not respond to the tribe’s suggested February 13 deadline to affirm the website is in compliance with IGRA.
    
Some tribal officials believe acting NIGC Chairman Jonodev Chaudhuri would likely not engage in the litigation before his pending Senate confirmation. Tribal attorney Graydon Luthey says the NIGC “needs to consider jurisdiction issues when you have a state regulator—namely, the attorney general of California—asking a federal court to interpret IGRA.”
   
“If I were the NIGC, that would make me uncomfortable because I’m the congressionally appointed regulator,” Luthey says. “I’ve got some elected state official in California doing what Congress has told me to do.”—Dave Palermo