Court Opinion

ID: 4300519
Source: CourtListenerOpinion
Date Created: 2018-08-02 17:01:00.544032+00
Date Added: 2024-06-11T14:42:26.783800
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

STATE OF CALIFORNIA; UNITED               No. 17-55150
STATES OF AMERICA,
               Plaintiffs-Appellees,        D.C. Nos.
                                         3:14-cv-02724-
                 v.                         AJB-NLS
                                         3:14-cv-02855-
IIPAY NATION OF SANTA YSABEL,               AJB-NLS
AKA Santa Ysabel Band of
Diegueno Mission Indians, AKA
Santa Ysabel Band of Diegueno               OPINION
Mission Indians of the Santa Ysabel
Reservation; SANTA YSABEL
INTERACTIVE, a tribal economic
development entity; SANTA YSABEL
GAMING COMMISSION; SANTA
YSABEL TRIBAL DEVELOPMENT
CORPORATION; ANTHONY BUCARO;
DAVID CHELETTE; MICHELLE
MAXCY; VIRGIL PEREZ; BRANDIE
TAYLOR; DAVID VIALPANDO,
             Defendants-Appellants.

     Appeal from the United States District Court
        for the Southern District of California
     Anthony J. Battaglia, District Judge, Presiding

         Argued and Submitted March 16, 2018
              San Francisco, California
2       CALIFORNIA V. IIPAY NATION OF SANTA YSABEL

                       Filed August 2, 2018

    Before: M. Margaret McKeown, Julio M. Fuentes, *
            and Carlos T. Bea, Circuit Judges.

                      Opinion by Judge Bea

                          SUMMARY **

                          Tribal Gaming

    The panel affirmed the district court’s summary
judgment in favor of the State of California and the United
States in their action seeking injunctive relief prohibiting
Iipay Nation of Santa Ysabel from continuing to operate
Desert Rose Casino.

    Desert Rose Casino is exclusively a server-based bingo
game that allows patrons to play computerized bingo over
the internet. Iipay Nation is a federally recognized Indian
tribe with tribal lands located in San Diego County,
California.

   The panel held that Iipay Nation’s operation of Desert
Rose Casino violated the Unlawful Internet Gambling
Enforcement Act (“UIGEA”). The panel held that the Indian
Gaming Regulatory Act protected gaming activity
conducted on Indian lands, but the patrons’ act of placing a

    *
      The Honorable Julio M. Fuentes, United States Circuit Judge for
the U.S. Court of Appeals for the Third Circuit, sitting by designation.
    **
       This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
     CALIFORNIA V. IIPAY NATION OF SANTA YSABEL            3

bet or wager on a game of Desert Rose Casino while located
in California, violated the UIGEA, and was not protected by
the Indian Gaming Regulatory Act. The panel further held
that even if all of the “gaming activity” associated with
Desert Rose Casino occurred on Indian lands, the patrons’
act of placing bets or wagers over the internet while located
in a jurisdiction where those bets or wagers were illegal
made Iipay Nation’s decision to accept financial payments
associated with those bets or wagers a violation of the
UIGEA.

                        COUNSEL

Scott D. Crowell (argued), Crowell Law Office-Tribal
Advocacy Group, Sedona, Arizona; Little Fawn Boland,
Ceiba Legal LLP, Mill Valley, California; Kevin C. Quigley,
Foley & Quigley PLC, Saint Paul, Minnesota; for
Defendants-Appellants.

Glen F. Dorgan (argued), Assistant United States Attorney,
United States Attorney; United States Attorney’s Office, San
Diego, California; William P. Torngren, Deputy Attorney
General; Sarah J. Drake, Senior Assistant Attorney General;
Xavier Becerra, Attorney General; Office of the Attorney
General, Sacramento, California; for Plaintiffs-Appellees.
4     CALIFORNIA V. IIPAY NATION OF SANTA YSABEL

                          OPINION

BEA, Circuit Judge:

    This case presents an issue of first impression: Does the
Indian Gaming Regulatory Act, 25 U.S.C. § 2701, et seq.,
permit an Indian tribe to offer online gaming to patrons
located off Indian lands in jurisdictions where gambling is
illegal? Because we conclude that the Unlawful Internet
Gambling Enforcement Act, 31 U.S.C. § 5361, et seq., bars
the activity at issue in this case, we affirm the district court’s
order granting summary judgment to the State of California
and the United States.

                                I

    The Iipay Nation of Santa Ysabel (“Iipay”) is a federally
recognized Indian tribe. Iipay’s tribal lands are located in
San Diego County, California. Iipay operated a traditional,
brick-and-mortar casino on its tribal lands, but the casino
failed and Iipay no longer conducts traditional gambling
activity at the casino.

    In an effort to revitalize its gaming revenue stream, Iipay
launched Desert Rose Bingo (“DRB”). DRB is a server-
based bingo game that allows patrons to play computerized
bingo over the internet. Like traditional bingo, participants
in DRB purchase cards labeled with a grid of numbers.
Numbers are then drawn and, if the numbers drawn
correspond with the numbers on the player’s card, the
numbers on the card are covered or “daubed.” A player wins
by daubing numbers on the card in a pre-determined pattern.
        CALIFORNIA V. IIPAY NATION OF SANTA YSABEL                     5

    Iipay operated DRB through its wholly owned
subsidiary, Santa Ysabel Interactive (“SYI”), on a set of
servers that are located in Iipay’s now-defunct casino on
tribal lands. Unlike other computerized bingo games, Iipay
does not provide any physical computer terminals located on
Iipay’s tribal lands at which patrons can play DRB. Instead,
Iipay offered DRB to all California residents over 18 years
of age exclusively through the internet. 1

    A patron must access DRB by navigating to
desertrosebingo.com using a web browser on a computer or
other internet-enabled device, such as a tablet or cell phone.
The patron must then register, create an account, and fund
the account (either via a credit card or an electronic funds
transfer).

    After a patron has funded his account, he can select a
bingo game in which to participate, ranging in value from
$.01 to $1.00. Once the patron selects a denomination of
game in which to participate, the patron is presented with a
“Request Form” popup window. In the Request Form
window, the patron selects the number of games he would
like to participate in (up to five games), the number of cards
per game the patron would like to play (up to 500 cards per
game), and the “playback theme” the patron would like the
post-game video to appear. 2

   After the patron is satisfied with his selection of
denomination of game, number of games, and number of

    1
      Iipay limited the game to California residents who were in state at
the time of logging on by using a geolocation server and geolocation
software to identify and verify the location of users who accessed DRB.
    2
      For instance, in a demonstration DVD provided by the parties, the
playback video is shown in a “Jurassic theme” and features a dinosaur.
6       CALIFORNIA V. IIPAY NATION OF SANTA YSABEL

cards, the patron clicks the “Submit Request!” button on the
Request Form. The patron is then presented with a “System
Message” stating that the request has been submitted and
“accepted” by DRB. After the Request Form is submitted,
the patron’s account is debited for an amount equal to the
denomination of game the patron chose, multiplied by the
number of games and cards per game the patron selected.

    After the patron’s request is accepted, the patron can
view the request under the “Requested” tab on DRB’s main
page. The Requested tab shows the information from the
Request Form—denomination of game, number of games,
number of cards per game, and playback theme. The
Requested tab also displays the number of “proxies,” which
corresponds with the number of patrons registered to
participate in the game, and a timer. Once the number of
patrons participating in the game reaches the pre-determined
minimum number of participants set by DRB, the timer
begins to count down.

    When the timer reaches zero, the patrons’ wagers are
logged as “completed,” and the outcome of the game is
determined. Technically, by submitting the Request Form,
the patron has appointed an individual located at the casino,
on Iipay’s tribal lands, as the patron’s “proxy.” There is
always one SYI employee located at the casino that serves
as the “Patron’s Legally Designated Agent” and is
responsible for representing all patrons. 3

   Serving as a Patron’s Legally Designated Agent does not
require any affirmative action, such as actually daubing the

    3
     SYI also employs approximately a half-dozen “proxy monitors”
who assist in monitoring the operation of the software and hardware
components of DRB.
      CALIFORNIA V. IIPAY NATION OF SANTA YSABEL            7

bingo card, by the proxy. Instead, the proxy is a passive
observer and the DRB software automatically conducts all
aspects of gameplay, from drawing the numbers to daubing
the cards. Thus, the “playing” of the game requires no actual
action on the part of the patron, the Patron’s Designated
Agent, or any other human. The last human action in a game
of bingo conducted through DRB occurs when the patron
clicks the “Submit Request!” button.

    Shortly after the game is completed, the patron can
navigate to the “Completed” tab and view the results of the
bingo game. Under the completed tab, the patron can choose
to view a video replay of the completed bingo game, which
is presented in the selected graphical theme (e.g., Jurassic).
The replay video shows the bingo card the patron purchased
and a video recreation of the numbers being drawn and
daubed. At the end of the video, the patron is informed
whether and how much the patron won. The patron’s
account is then credited with any winnings.

     Iipay launched DRB on November 3, 2014. On
November 18, 2014, the State of California and the United
States (collectively, the “Government”) sued Iipay seeking
injunctive relief prohibiting Iipay from continuing to operate
DRB. On December 12, 2014, the district court issued a
temporary restraining order prohibiting Iipay from
continuing to operate DRB during the pendency of this
litigation. DRB has remained dormant ever since.

    After discovery, the State of California and the United
States filed separate motions for summary judgment. The
State of California sought summary judgment on two
grounds. First, California claimed that Iipay’s operation of
DRB violated the tribal-state compact between California
8       CALIFORNIA V. IIPAY NATION OF SANTA YSABEL

and Iipay regarding Class III gaming. 4 The district court
rejected this argument, finding that DRB was a Class II game
that was not subject to the tribal-state compact. 5

    Second, California and the United States jointly argued
that Iipay’s operation of DRB violated the Unlawful Internet
Gambling Enforcement Act (“UIGEA”), 31 U.S.C. § 5361,
et seq. Iipay argued that the UIGEA did not apply to its
operation of DRB because DRB was conducted on tribal
lands and, as a result, was legal under the Indian Gaming
Regulatory Act (“IGRA”), 25 U.S.C. § 2701, et seq. The
district court ruled that DRB violated the UIGEA and
entered a permanent injunction prohibiting Iipay from
operating DRB. Iipay appealed the district court’s grant of
summary judgment.

                                   II

    We review the district court’s grant of summary
judgment de novo and may affirm on any ground supported
by the record. Phoenix Mem’l Hosp. v. Sebelius, 622 F.3d
1219, 1224 (9th Cir. 2010). Statutory interpretation presents
a question of law, which we also review de novo. Id.

    4
       The Indian Gaming Regulatory Act categorizes various forms of
gambling into three different “Classes.” Bingo is ordinarily a Class II
game, which can be conducted on tribal lands without approval from the
state where the tribal lands are located. See 25 U.S.C. §§ 2703(7)(A)(i),
2710(a)(2). However, California argued that features of DRB rendered
it an “electronic facsimile” of bingo, making DRB a Class III game,
which cannot be conducted on tribal lands unless it is permitted by a
tribal-state compact. See 25 U.S.C. §§ 2703(7)(B)(ii), 2703(8), 2710(d).
    5
      California did not cross-appeal the district court’s denial of its
motion for summary judgment based on its tribal-state compact claim.
As a result, that issue is not before us on appeal.
        CALIFORNIA V. IIPAY NATION OF SANTA YSABEL                    9

                                  III

    This case presents an issue of first impression regarding
the interrelation between IGRA and the UIGEA. No other
circuit has opined on whether an Indian tribe can offer online
gaming to patrons located off Indian lands in jurisdictions
where such gambling is illegal. The issue hinges on the
interpretation of the key provisions of IGRA and the
UIEGA. Thus, to analyze this issue, it is helpful to review
the statutory framework of IGRA and the UIEGA.

    A. The Statutory Framework

    IGRA was passed to provide a regime for regulating
gaming on Indian lands. It provides that “[a]ny class II
gaming on Indian lands shall continue to be within the
jurisdiction of the Indian tribes.” 25 U.S.C. § 2710(a)(2).
As discussed above, DRB (like other forms of bingo,
generally) is a Class II game. See discussion supra at 8 n.4.
Thus, if DRB takes place on Indian lands, it is under Iipay’s
jurisdiction, provided Iipay complies with certain regulatory
requirements that are not at issue here. 6

    6
       We note that Congress passed IGRA in 1988—a few years before
the internet became publicly available. Pub. L. No. 100-497, 102 Stat.
2467 (1988). Congress made clear that this was “[a]n Act to regulate
gaming on Indian lands” because “Federal law d[id] not provide clear
standards or regulations for the conduct of gaming on Indian lands.” Id.
(emphasis added). Befitting the technology of the time, IGRA
envisioned bingo with “electronic, computer, or other technologic aids.”
Id. at 2468. But the statute nowhere referenced the internet, or other
networking capabilities that reach beyond Indian lands.
10       CALIFORNIA V. IIPAY NATION OF SANTA YSABEL

    The UIGEA was passed to regulate online gambling. 7
See 31 U.S.C. § 5361. Unlike IGRA or other gambling
regulations, the UIGEA does not make gambling legal or
illegal directly. Instead, the UIGEA makes it illegal for a
“person engaged in the business of betting or wagering”
knowingly to accept certain financial payments from an
individual who is engaged in “unlawful Internet gambling.”
31 U.S.C. § 5363. Unlawful internet gambling occurs when
an individual places or receives a “bet or wager by any
means which involves the use, at least in part, of the Internet
where such bet or wager is unlawful under any applicable
Federal or State law in the State or Tribal lands in which the
bet or wager is initiated, received, or otherwise made.”
31 U.S.C. § 5362(10)(A) (emphasis added). A “bet or
wager” includes “staking or risking” something of value,
purchasing a lottery ticket, or transmitting “any instructions
or information pertaining to the establishment or movement
of funds by the bettor or customer in, to, or from an account
with the business of betting or wagering.” 31 U.S.C.
§ 5362(1).

    Thus, the UIGEA does not prohibit otherwise legal
gambling. But the UIGEA does create a system in which a
“bet or wager” must be legal both where it is “initiated” and
where it is “received.” This requirement makes sense in
light of how the internet operates. If a bet merely had to be
legal where it was received, a bettor could place an illegal
bet (on a game of poker, for instance) from anywhere in the

     7
      When Congress passed UIGEA in 2006, it found that “[n]ew
mechanisms for enforcing gambling laws on the Internet [we]re
necessary because traditional law enforcement mechanisms are often
inadequate for enforcing gambling prohibitions or regulations on the
Internet, especially where such gambling crosses State or national
borders.” 31 U.S.C. § 5361.
        CALIFORNIA V. IIPAY NATION OF SANTA YSABEL                     11

United States, so long as the bet was legal in the jurisdiction
hosting the servers for a game (Las Vegas or Atlantic City,
for instance, in the case of online poker). In effect, the
UIGEA prevents using the internet to circumvent existing
state and federal gambling laws, but it does not create any
additional substantive prohibitions.

    B. Iipay’s Operation of DRB Violates the UIGEA

    The parties’ main point of contention is whether the
“gaming activity” related to DRB occurs exclusively “on
Indian lands” and, thus, under Iipay’s jurisdiction. 8 Iipay
contends that the “gaming activities” related to DRB consists
of the operation of the servers on Iipay’s lands, which
determine the patterns on the bingo cards, draw the numbers,
and daub the cards. Iipay argues that any activity conducted
by the patrons outside of Iipay’s lands—such as selecting the
denomination and number of games the patron would like to
participate in and submitting the patron’s request through
DRB’s website—are merely pre-game communications
between the patron and the Patron’s Designated Agent.
Finally, Iipay argues that, to the extent the terms “gaming
activities” or “on Indian lands” are ambiguous, they must be
    8
       Both parties refer to “gaming activity” throughout their briefing.
This is likely due to the fact that most IGRA cases, including Michigan
v. Bay Mills Indian Community., 134 S. Ct. 2024 (2014), the leading
Supreme Court case, address Class III gaming. The provisions related
to Class III gaming use the phrase “gaming activities . . . on Indian
lands.” 25 U.S.C. § 2710(d)(1). The provisions related to Class II
gaming, which is the relevant topic in this case, refer to “Class II gaming
on Indian lands.” 25 U.S.C. § 2710(a)(2). There does not appear to be
a difference between the meaning of “gaming” and “gaming activity” in
the context of the statute. For consistency with the parties’ briefing, we
also refer to “gaming activity.” “Gaming” is the gambling industry’s
preferred term for “gambling.”
12       CALIFORNIA V. IIPAY NATION OF SANTA YSABEL

construed in Iipay’s favor. See Cty. of Yakima v.
Confederated Tribes & Bands of Yakima Indian Nation,
502 U.S. 251, 269 (1992) (stating that statutes are to be
construed liberally in favor of Indian tribes and ambiguities
should be resolved in their favor). 9

    The Government argues, consistent with the district
court’s opinion, that “gaming activity” is not ambiguous.
Citing Michigan v. Bay Mills Indian Community., 134 S. Ct.
9
       Iipay acknowledges that there are no cases directly on point.
However, it argues that this court’s decision in AT & T Corporation v.
Coeur d’Alene Tribe, 295 F.3d 899 (9th Cir. 2002), can provide
“guidance.” Coeur d’Alene is not helpful in this case. In Coeur d’Alene,
an Indian tribe established a national telephone lottery, which would
allow participants to purchase lottery tickets for a lottery held on tribal
lands over the telephone from anywhere in the country. Id. at 901. The
tribe contracted with AT&T to provide toll-free telephone service for the
lottery. Id. The tribe’s agreement with AT&T was approved by the
National Indian Gaming Commission (the “NIGC”). Id. at 902. Despite
the approval of the NIGC, several states informed AT&T that they
viewed the lottery as illegal and threatened legal action. Id.

     AT&T brought a declaratory judgment action in federal court
seeking a determination that it was not required to provide toll-free
telephone service for the lottery. Id. at 903. The tribe argued that the
lottery was protected under IGRA. Id. The district court granted
summary judgment to AT&T, concluding that IGRA did not protect the
lottery because patrons purchased lottery tickets from off Indian lands.
Id. We reversed the district court, but did so without reaching the merits
of the IGRA argument. Id. at 905–10. Instead, we held that AT&T did
not have standing to bring the suit because the legality of its contract
with the tribe was subject to the NIGC’s approval and that approval
constituted a final agency action which had to be challenged under the
APA. Id. Because we did not address the merits of the IGRA issue
presented by Coeur d’Alene, and Iipay does not contend that the NIGC
has approved DRB, Coeur d’Alene does not provide a precedent we must
follow.
         CALIFORNIA V. IIPAY NATION OF SANTA YSABEL                    13

2024 (2014), the Government contends that “gaming
activity” under IGRA is “the gambling in the poker hall,” as
opposed to “off-site licensing or operation of the games.” 10
Id. at 2032–33. The Government argues that the “gambling”
in this instance, is the patron’s decision to wager money on
the bingo game, which occurs off Indian lands.

    We reject Iipay’s argument that the patron’s decision to
submit a requested wager of a particular monetary
denomination is merely a pre-gaming communication with
the patron’s designated proxy. The district court found that
it was uncontested that the act of clicking “Submit Request!”
by a patron was a “bet or wager” within the meaning of the
UIGEA. The district court based this finding on the fact that
the patrons were staking something of value on the outcome
of the bingo game, but the court could have just as easily
found that the patrons were giving “instructions or
information pertaining to the establishment or movement of
funds by the bettor or customer in, to, or from an account
with the business of betting or wagering.” See 31 U.S.C.
§ 5362(1). Additionally, the district court found that DRB’s
patrons were located in California when they clicked the

    10
        In Bay Mills, a tribe with its tribal lands located in the state of
Michigan opened a casino in Michigan, but off of its tribal lands. 134 S.
Ct. 2028–30. In order to avoid the tribe’s sovereign immunity defense,
Michigan attempted to sue the tribe under IGRA, arguing that the tribe’s
operation of the casino fell within the statute’s scope. Id. Specifically,
Michigan argued that although the casino was located off of Indian lands,
the tribe licensed the casino and completed administrative functions from
its headquarters on its tribal lands. Id. at 2030–35. Michigan contended
that these actions were “gaming activity” and could be enjoined through
IGRA. Id. The district court granted a preliminary injunction to
Michigan, the tribe appealed, and the Sixth Circuit vacated the
injunction. 134 S. Ct. 2028–30. The Supreme Court affirmed, holding
that the administrative actions that occurred on tribal lands were not
“gaming activity” and thus were not subject to IGRA. Id. at 2030–35.
14        CALIFORNIA V. IIPAY NATION OF SANTA YSABEL

“Submit Request!” button and that betting on bingo violates
California law. See Cal. Penal Code § 330 (prohibiting
“percentage games”). Iipay does not contest these findings
on appeal.

    Two key conclusions can be drawn from these
uncontested findings. First, as the Government argues, the
patrons are engaging in “gaming activity” by initiating a bet
or a wager in California and off Indian lands. Consistent
with the Supreme Court’s holding in Bay Mills, the act of
placing a bet or wager is the “gambling in the poker hall,”
not “off-site licensing or operation of the games.” 134 S. Ct.
at 2032–33. As a result, it seems clear that at least some of
the “gaming activity” associated with DRB does not occur
on Indian lands and is thus not subject to Iipay’s jurisdiction
under IGRA. 11

    Second, these uncontested facts undermine Iipay’s
position that IGRA can shield DRB from the application of
the UIGEA. Iipay has admitted that patrons initiate bets or
wagers within the meaning of the UIGEA while located in
California, where those bets are illegal. Even if DRB is
completely legal in the place where the bet is accepted, on
     11
        Iipay argues that if the term “gaming activity” is ambiguous, it
must be construed in favor of Iipay. See Cty. of Yakima, 502 U.S. at 269.
Although this is true, the Supreme Court’s ruling in Bay Mills undercuts
Iipay’s argument that the phrase is ambiguous. Justice Sotomayor,
writing for the Court, held that gaming activity “means just what it
sounds like . . . the gambling in the poker hall, not the proceedings of the
off-site administrative authority.” 134 S. Ct. at 2032–33. The Court also
made clear that IGRA “regulate[s] gaming on Indian lands, and nowhere
else.” Id. at 2032. Iipay provides no basis to depart from this common
sense, straightforward analysis. Additionally, as discussed below, even
if this court accepts Iipay’s definition of “gaming activity,” the UIGEA
still applies to DRB. See discussion, infra at 14–17.
         CALIFORNIA V. IIPAY NATION OF SANTA YSABEL                     15

Iipay’s lands, the bets are not legal in the jurisdiction where
they are initiated, in this case California. 12 Thus, when Iipay
accepts financial payments over the internet as part of those
bets or wagers, Iipay violates the UIGEA.

    In this respect, Iipay’s argument regarding proxies
actually works against Iipay’s position. Iipay argues that the
patron’s action in selecting a wager amount and clicking
“Submit Request!” is pre-gaming communication with the
proxy, not “gaming activity.” But if clicking “Submit
Request!” is not “gaming activity” within the meaning of
IGRA, but merely an administrative issue, it cannot be
protected by IGRA. See Bay Mills, 134 S. Ct. at 2032–33
(holding that IGRA’s provisions do not apply to
administrative activities that are unrelated to the “gambling
in the poker hall”). That conduct is, however, subject to the
provisions of the UIGEA as a “bet or wager” initiated
through the internet. 13 As a result, whether Iipay is correct
that no “gaming activity” occurs off Indian lands or not,
Iipay’s operation of DRB violates the UIGEA.

   Iipay argues strenuously that this analysis is flawed
because any determination regarding the legality of DRB

    12
        Iipay argues that the location of a bet or wager should be
determined under contract principles and that a contract (including a
wager) is formed in the place of acceptance. But Iipay’s argument
ignores the plain statutory text of the UIGEA, which prohibits bets or
wagers that are illegal in either the jurisdiction where the bet or wager is
initiated or where the bet or wager is received. 31 U.S.C. § 5362(10).

    13
       As noted above, even if the court accepts Iipay’s argument that no
“bet or wager” in the traditional sense has occurred when the patron
clicks the “Submit Request!” button, the patron has certainly provided
“instructions or information pertaining to the establishment or movement
of funds by the bettor or customer in, to, or from an account with the
business of betting or wagering.” 31 U.S.C. § 5362(1).
16     CALIFORNIA V. IIPAY NATION OF SANTA YSABEL

must be made exclusively through examining IGRA,
without reference to the UIGEA. This is so, Iipay contends,
because the UIGEA does not contain any substantive
prohibitions on previously legal gambling and expressly
provides that “no provision” of the UIGEA “shall be
construed as altering, limiting, or extending any Federal or
State law or Tribal-State compact prohibiting, permitting, or
regulating gambling within the United States.” 31 U.S.C.
§ 5361. Thus, Iipay argues, if DRB would have been legal
in the absence of the UIGEA, it must remain legal after the
UIGEA’s passage.

    On this point, Iipay’s argument fails for two reasons.
First, absent a direct conflict, courts should give effect to co-
existing federal statutes. Connecticut Nat. Bank v. Germain,
503 U.S. 249, 253 (1992). Here, there is no direct conflict
between IGRA and the UIGEA and, thus, we give effect to
the provisions of both statutes.

    Second, although Iipay is correct that the UIGEA does
not alter IGRA, that does not mean that the UIGEA did not
outlaw certain financial transactions associated with gaming
on Indian lands facilitated by the internet, a topic on which
IGRA is silent. 14 Indeed, Congress clearly contemplated
that the UIGEA might apply to games played on Indian lands

     14
        That Iipay’s interpretation of the UIGEA’s scope is unworkable
is demonstrated by applying Iipay’s logic to other potential situations.
For instance, because the UIGEA specifies that it does not alter either
federal or state laws regarding gambling, a state like Nevada could
theoretically make the same argument advanced by Iipay to justify
accepting wagers over the internet made by residents of other states.
Effectively, Nevada could argue that accepting wagers in its jurisdiction
was legal before the UIGEA and, thus, must be legal after its passage as
well. Given the realities of the internet, this interpretation would render
the UIGEA all but meaningless.
         CALIFORNIA V. IIPAY NATION OF SANTA YSABEL             17

because it specifically exempted certain intra- and inter-
tribal games from the UIGEA’s scope. See 31 U.S.C.
§ 5362(10)(C) (exempting bets or wagers “initiated and
received or otherwise made exclusively” on a single tribe’s
land or multiple tribal lands, provided that the relevant tribal
ordinances and regulations permit such bets or wagers).

     What Iipay’s arguments fail to acknowledge is that the
UIGEA does not have to make DRB the game illegal in order
to make Iipay’s operation of that game—specifically, its
decision to accept wagers and financial payments over the
internet from patrons located in California—illegal.
Whether DRB is permitted by IGRA or not, Iipay’s
operation of DRB violates the UIGEA’s requirement that
bets placed over the internet be legal both where they are
initiated and where they are received. Thus, it can be true
that the UIGEA did not alter IGRA, and it can also be true
that DRB is subject to and violates the UIGEA. 15

    In summary, Iipay is correct that IGRA protects gaming
activity conducted on Indian lands. However, the patrons’
act of placing a bet or wager on a game of DRB while located
in California constitutes gaming activity that is not located
on Indian lands, violates the UIGEA, and is not protected by
IGRA. Further, even if Iipay is correct that all of the
“gaming activity” associated with DRB occurs on Indian
lands, the patrons’ act of placing bets or wagers over the
internet while located in a jurisdiction where those bets or
wagers is illegal makes Iipay’s decision to accept financial

    15
       We take no position on whether Iipay would violate the UIGEA
by accepting DRB bets or wagers exclusively from patrons located in
jurisdictions where bingo is legal.
18   CALIFORNIA V. IIPAY NATION OF SANTA YSABEL

payments associated with those bets or wagers a violation of
the UIGEA.

   Because Iipay’s operation of DRB violates the UIGEA,
we AFFIRM the district court’s order granting summary
judgment to the Government.