“States have traditionally handled regulation of gambling, supported by federal law in situations where an interstate of foreign element might otherwise frustrate the enforcement of state law,” posited the CRS report. “With respect to federal law, DFS may implicate at least four gambling-related statutes.”
The Federal Reserve and Treasury Department announced on Monday, June 8, 2015 the renewal of a recordkeeping requirement intended to show that payment systems are implementing policies to “identify and block or otherwise prevent or prohibit transactions in connection with unlawful Internet gambling.”
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM DEPARTMENT OF THE TREASURY
“Agency Information Collection Activities; Renewal of a Currently Approved Collection; Comment Request; Prohibition on Funding of Unlawful Internet Gambling”
Board of Governors of the Federal Reserve System (“Board”) and Departmental
Offices, Department of the Treasury (“Treasury”) (collectively, the “Agencies”).
Joint notice and request for comment.
The Agencies are soliciting comments concerning the currently approved recordkeeping requirements associated with a joint rule , which is being renewed without change, implementing the Unlawful Internet Gambling Enforcement Act of 2006 (the “Act”).
This notice is published jointly by the Agencies as part of their continuing effort to reduce paperwork and respondent burden. The public and other Federal agencies
are invited to take this opportunity to comment on this information collection, as required by the Paperwork Reduction Act of 1995, Pub. L. 104 – 13 (44 U.S.C. 3506(c)(2)(A)).
This document is unpublished, but on 06/09/2015 it is scheduled to be published and available on the Federal Register web page. Until then, you can download the pre-publication attached PDF version.
In a response brief filed earlier this week, the State of California argues that peer-to-peer online bingo gaming activity takes place on both tribal lands (vis-a-vis computer servers) AND that is takes place off-reservation by virtue of the fact that bingo players in California are not physically present on tribal lands when they play remotely from PC’s, iPhones, and otherwise from outside sovereign tribal terra firma.
In this first of its kind iGaming litigation, the Iipay tribe had cogently argued in its motion to dismiss this case that if the allegedly illegal iGaming bingo was taking place “off-reservation” as the State of CA repeatedly contended, then the State lacks subject matter jurisdiction to bring the case in the first place. Citing precedent on this score, and believing it had painted the State of California into a corner by virtue of the State’s arguments made previously in the case about “off-reservation” activity, the Iipay nation vigorously claimed that the State could not pursue the instant litigation — i.e., when the State had argued so persuasively to the trial court during the provisional relief stage seeking a TRO (which the USDC trial judge granted) that the bingo gaming activity takes place off of the tribal lands, then the State has no power to bring this lawsuit. Period. End of story. So, said the Iipay, you must now dismiss this case for lack of jurisdiction in accord with the prior TRO ruling.
Now, however, the State has responded; not so fast. We didn’t say the gaming activity only occurs off of tribal lands. CA has filed this motion to dismiss response contending that the improper tribal gaming activity at issue here takes place BOTH upon the tribal lands of the Iipay nation AND off-reservation. As a result of that purported duality as to the locale of the gaming, CA maintains that is has proper subject matter jurisdiction and has noted in passing that the trial court has already determined (during the TRO proceedings) that the bingo gaming activity at issue here is Class III (not Class II) and therefore is a subject of the State – Tribal gaming compact.
On July 27th 2015, the Iipay Tribe filed its Reply brief in response to the State’s Opposition papers. In them, the Tribe again argues that unless and until the State stipulates to the fact that the disputed “gaming activity” is conducted solely and exclusively on the Tribe’s Indian lands, the Court cannot proceed to adjudicate the State’s claims because the State’s action is barred by the doctrine of tribal immunity. The Reply contends that the SCOTUS legal rationale expressed in the Bay Mills decision does not permit any other result.
Additionally, as regards the Class II versus Class III gaming category issue, the Tribe contends that Trial Court cannot begin to conduct a classification analysis to determine if the disputed gaming activity is legally deemed class II gaming or class III gaming under IGRA until it is stipulated that the gaming activity in question is “conducted entirely on Indian lands” so as to fall within the purview of IGRA. The State tries to concede this point, says the Tribe, but in the end it simply cannot bring itself to do so because it wants to have its cake and eat it too – meaning that Tribal Defendants’ motion to dismiss must be granted under Fed.R.Civ.P. 12(h)(3).
The hearing on this Motion to Dismiss is set for March 5, 2015. Given the trial court’s prior ruling during the TRO phase, it would be difficult to see the Judge not agreeing with the State again. That said, both sides (as do all concerned and interested observers) fully expect this matter to be taken up on appeal either way.
See the State of CA Opposition response to the Motion to Dismiss filing here — http://www.jdsupra.com/legalnews/state-of-californias-opposition-to-defe-27045/
See, the Defendant’s Reply papers filed in response to the State Opposition filing here — http://www.jdsupra.com/legalnews/defendants-reply-to-state-of-california-35812/
Internet Poker Consumer Protection Act of 2015 (CA AB No. 167 — Jones-Sawyer)
LEGISLATIVE COUNSEL'S DIGEST AB 167, as introduced, Jones-Sawyer. Gambling: Internet poker: unlawful gambling activity. (1) Existing law, the Gambling Control Act, provides for the licensure of certain individuals and establishments that conduct controlled games, as defined, and for the regulation of these gambling activities by the California Gambling Control Commission. The Department of Justice has related investigatory and enforcement duties under the act. Any violation of these provisions is punishable as a misdemeanor, as specified. This bill, which would be known as the Internet Poker Consumer Protection Act of 2015, would establish a framework to authorize intrastate Internet poker, as specified. The bill would authorize eligible entities to apply for a 4-year license to operate an authorized poker Web site offering the play of authorized Internet poker games to registered players within California, as specified. The bill would require that the license be automatically renewed every 4 years upon application, as specified. The bill would prohibit the offer or play of any gambling game provided over the Internet that is not an authorized Internet poker game permitted by the state pursuant to these provisions. The bill would provide that it is unlawful for a person to aggregate computers or any other Internet access device in a place of public accommodation within the state, including a club or other association, or a public or other setting, that can accommodate multiple players to simultaneously play an authorized Internet poker game, or to promote, facilitate, or market that activity. The bill would provide that any violation of the Internet Poker Consumer Protection Act of 2015 is punishable as a felony. By creating new crimes, the bill would impose a state-mandated local program. This bill would require the commission, and any other state agency with a duty pursuant to these provisions, to adopt regulations to implement the provisions within 270 days after the operative date of this bill, in consultation with the department and federally recognized California Indian tribes, and to facilitate the operation of authorized poker Web sites and expedite the state's receipt of revenues. The bill would require an eligible entity, as defined, to pay an application processing fee sufficient to cover all reasonable costs associated with the review of the entity's suitability for licensure and the issuance of the license, for deposit into the Internet Poker Fund, as created by the bill, to be continuously appropriated to the department and the commission in the amounts necessary to perform their duties pursuant to this bill. The bill would require an entity seeking to act as a service provider to apply for a service provider license, employees of a licensed operator or a licensed service provider to obtain employee work permits, and owners, officers, and directors of a licensed operator to be subject to a suitability review and obtain employee work permits. The bill would establish a tribal gaming regulatory authority process for the purpose of processing tribal employee work permits, and authorize a tribe that is a licensed operator to elect to participate in the tribal gaming regulatory authority process. This bill would require the payment of an annual regulatory fee, for deposit into the Internet Poker Fund, to be continuously appropriated for the actual costs of license oversight, consumer protection, state regulation, and other purposes related to this bill. The bill would require each licensee to pay a one-time license deposit into the General Fund in the amount of $10,000,000. The license deposit would be credited against quarterly fees equivalent to 8.5% of the licensee's gross gaming revenue proceeds, as specified. The bill would require an applicant for an operator license to provide documentation establishing that the applicant is qualified to pay the one-time license deposit through its own net position or through credit directly to the applicant, as specified. This bill would establish the Unlawful Gambling Enforcement Fund within the General Fund for purposes of ensuring adequate resources for law enforcement charged with enforcing the prohibitions and protections of the provisions described above. The bill would authorize the Attorney General, and other public prosecutors, as specified, to bring a civil action to recover a civil penalty in an unspecified amount against a person who engages in those prohibited activities described above, or other specified unlawful gambling activities. The bill would provide for an unspecified percentage of revenues from civil penalties collected to be deposited into the fund and used for law enforcement activities pursuant to these provisions, upon appropriation by the Legislature. This bill would require the commission, in consultation with the department, the Treasurer, and the Franchise Tax Board, to issue a report to the Legislature describing the state's efforts to meet the policy goals articulated in this bill within one year of the operative date of this bill and, annually, thereafter. The bill would also require the Bureau of State Audits, at least 4 years after the issue date of any license by the state, but no later than 5 years after that date, to issue a report to the Legislature detailing the implementation of this bill, as specified. The bill would provide that specified provisions are not severable. (2)Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest. This bill would make legislative findings to that effect. (3)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. (4)This bill would declare that it is to take effect immediately as an urgency statute.
A detailed OpEd penned by long-time gaming industry observer and veteran journalist Dave Palermo underscores http://www.sacbee.com/opinion/california-forum/article6688959.html#storylink=cpy%5DRead more here:
That being said, Palermo’s piece additionally points out that Federal law gives tribal governments primacy to regulate their casinos, including those in California which many gaming experts have called the “best regulated casinos on the planet.” For example, the San Manuel Band of Mission Indians in San Bernardino County has more regulators than the California Bureau, which has some 150 employees and a $28 million budget.
But at the same time, and given the bifurcated nature of gaming control and enforcement in California, Card rooms — which have evolved from poker-only to high-stakes versions of blackjack, pai gow and baccarat requiring the use of banking firms, are another matter entirely. Some gaming industry experts contend that California’s card clubs lack internal operating controls as well as adequate surveillance.
“It’s the wild, wild west,” said independent card-cheating consultant George Joseph said.
“Internal controls are nil,” agrees Vic Taucer, an independent table games consultant.
In commenting upon the 4-member Gambling Control Commission appointed by California Governor Jerry Brown (which Mr. Palermo notes is largely inexperienced in gambling matters and struggles in particular with regulating card rooms), Commissioner Richard Schuetz said that it was the “worse regulated segment” of the nation’s gambling industry.
While lack of resources are always an issue for cash-strapped governments, the bureaucratic culture and separation of gambling controls into separate dysfunctional State agencies exacerbates the disconnection between regulatory bodies which do not routinely or systemically communicate or coordinate with each other.
But is that more an indictment of the divergent approach to CA gaming regulation and enforcement activity for different gaming industries? Or does it really mean only certain gaming market sectors are more prone to issues than others?
On that score, Palermo has augmented his investigative reporting to point out in another blog piece that the California gambling regulatory officials who will rule on the licensing of a former casino enforcement chief accused of jeopardizing a $119 million card room skimming investigation may themselves be faced with conflicts of interests, industry legal experts said.
Both Richard Lopes, chairman of the California Gambling Control Commission, and Tina Littleton, the commission’s executive director, have personal and professional relationships with persons connected to a licensing investigation by Attorney General Kamala Harris. [See, Palermo Blog at — http://www.pechanga.net/content/potential-conflict-ag%E2%80%99s-lytle-licensing-investigation-0?utm_source=MailingList&utm_medium=email&utm_campaign=01%2F21%2F2015+–+Victor+Rocha%26%2338%3B%2339%3Bs+Daily+News+Digest%5D
Bitcoin is best thought of as a 5- to 10-year project, and we’re at the very early stages. An (admittedly imperfect) analogy is the early Web. http://www.wired.com/2015/01/price-bitcoin-doesnt-matter-right-now/?mbid=social_twitter