Justia Gaming Law Opinion Summaries

Gina Burt filed a lawsuit against Playtika, Ltd. and Playtika Holding Corporation in Tennessee state court, seeking to recover alleged gambling losses incurred by Tennessee residents who played Playtika’s online games. Burt's claim was based on Tennessee Code Ann. § 29-19-105, which allows recovery of gambling losses. Playtika removed the case to federal court, invoking jurisdiction under the Class Action Fairness Act (CAFA) and traditional diversity jurisdiction.The United States District Court for the Eastern District of Tennessee remanded the case to state court. The district court determined that it lacked jurisdiction because Burt’s suit was not a “class action” under CAFA, and the losses of the Tennessee players could not be aggregated to meet the amount in controversy requirement for traditional diversity jurisdiction. Playtika appealed the remand order under CAFA’s expedited removal appeal provision.The United States Court of Appeals for the Sixth Circuit reviewed the case and affirmed the district court’s remand order. The appellate court held that Burt lacked Article III standing to proceed in federal court because she did not allege that she personally suffered any gambling loss. The court found that Burt’s claim to recover losses on behalf of other Tennessee residents did not satisfy the injury-in-fact requirement for standing. Additionally, the court rejected Burt’s argument that she had standing under a qui tam theory, concluding that Tennessee Code Ann. § 29-19-105 is not a qui tam statute. Consequently, the court affirmed the district court’s decision to remand the case to state court. View "Burt v. Playtika, Ltd." on Justia Law

Plaintiffs, who are California residents and cardroom operators, challenged the constitutionality of California Business and Professions Code §§ 19858(a) and 19858.5. These statutes make a person ineligible for a California cardroom license if they own more than a 1% financial interest in a business that engages in casino-style gambling or if they have control over such a business. Plaintiffs argued that these provisions violate the dormant Commerce Clause by discriminating against interstate commerce, regulating extraterritorially, and unduly burdening interstate commerce.The United States District Court for the Eastern District of California initially dismissed the complaint as untimely, but the Ninth Circuit reversed that decision. On remand, the district court rejected plaintiffs' dormant Commerce Clause claims, concluding that the statutes did not discriminate against interstate commerce, did not regulate extraterritorially, and did not unduly burden interstate commerce. Plaintiffs appealed this decision.The United States Court of Appeals for the Ninth Circuit affirmed the district court's judgment. The court held that the cardroom licensing restrictions do not violate the dormant Commerce Clause. The court found that the statutes are not facially discriminatory, do not have a discriminatory purpose or effect, and do not favor in-state economic interests. The court also concluded that the statutes do not regulate extraterritorially because they condition a state license for conducting in-state activities on plaintiffs foregoing certain business interests, whether within or outside the state. Finally, the court determined that plaintiffs failed to demonstrate a significant or substantial burden on interstate commerce under the Pike balancing test. Therefore, the court affirmed the district court's judgment in favor of the California officials. View "Flynt v. Bonta" on Justia Law

In June 2019, the Illinois General Assembly amended the Illinois Gambling Act to authorize the Illinois Gaming Board to issue six new casino licenses, including one in Waukegan. Waukegan Potawatomi Casino, LLC (Potawatomi Casino) submitted a proposal, but the City of Waukegan certified three other applicants and not Potawatomi Casino. Potawatomi Casino filed a complaint seeking to prohibit the Board from issuing a casino license due to the City's alleged noncompliance with the statute. The Cook County circuit court dismissed the complaint for lack of standing.The appellate court reversed the circuit court's decision, finding that Potawatomi Casino had standing to bring the action. The appellate court concluded that Potawatomi Casino had a legally cognizable interest in competing in a fair and lawful certification process and that the alleged injury was distinct and traceable to the City's actions. The appellate court also rejected the argument that the absence of a private right of action under the Act provided a basis to affirm the dismissal.The Illinois Supreme Court reviewed the case and reversed the appellate court's decision. The court held that the Board had jurisdiction to consider the applications once the City certified the applicants, and the license issued to Full House was not void. The court found that no effectual relief could be granted to Potawatomi Casino, rendering the appeal moot. Additionally, the court determined that Potawatomi Casino lacked standing to bring the suit because it did not have a legally cognizable interest in the casino licensing process when it filed the action. The court affirmed the circuit court's dismissal of the complaint. View "Waukegan Potawatomi Casino, LLC v. Illinois Gaming Board" on Justia Law

Four Native American tribes operating casinos in Oklahoma filed a federal lawsuit in August 2020 to invalidate certain tribal-gaming compacts entered into by the Governor of Oklahoma and other tribes. These compacts were approved by the U.S. Secretary of the Department of the Interior by operation of law. The tribes argued that the Governor lacked the authority to enter into these compacts, violating Oklahoma law and their rights under the Indian Gaming Regulatory Act (IGRA).The Governor, represented by private counsel, defended the compacts' validity under federal law, arguing that any provisions violating state law could be severed. In July 2023, the Oklahoma Attorney General filed a notice to assume control of the state's defense, asserting that the compacts were invalid under state law. The Governor moved to strike the Attorney General's appearance, arguing that he had the authority to retain counsel and that the Attorney General could not override this.The United States District Court for the District of Columbia certified a question to the Supreme Court of Oklahoma regarding whether the Attorney General could assume control of the defense over the Governor's objection. The Supreme Court of Oklahoma held that the Attorney General could not take control of the defense in this case. The court emphasized the Governor's constitutional role as the "Supreme Executive" with the authority to select and direct counsel for the state's interests. The court also noted that the Attorney General could appear in the case but could not override the Governor's choice of counsel. View "CHEROKEE NATION v. UNITED STATES DEPARTMENT OF THE INTERIOR" on Justia Law

Lucky Chances, Inc. and its owners, Rommel and Ruell Medina, had their gambling licenses renewed by the California Gambling Control Commission with additional conditions. The Commission also imposed a 14-day suspension, stayed it, and ordered a monetary penalty based on findings that Rene Medina, a disqualified person, was materially involved in the gambling operation. The trial court issued a writ of administrative mandamus, ordering the Commission to reconsider the penalty, limiting it to $20,000 per violation.The Superior Court of Sacramento County found substantial evidence supporting the Commission's finding of Rene's material involvement but ruled that the monetary penalty exceeded statutory limits. The court ordered the Commission to set aside the penalty and reconsider it in light of the court's decision.The California Court of Appeal, Third Appellate District, reviewed the case. The court concluded that the Commission was authorized to impose additional license conditions based on its findings. However, it determined that the Commission could not use California Code of Regulations, title 4, section 12554, subdivision (d) to impose discipline because the Commission did not find that the Licensees violated any relevant law, regulation, or previously imposed license condition.The Court of Appeal modified the judgment to order the Commission to reconsider the discipline imposed under California Code of Regulations, title 4, section 12554, subdivision (d) in a manner consistent with its opinion. The judgment, as modified, was affirmed, and costs on appeal were awarded to Lucky Chances, Inc., Rommel Medina, and Ruell Medina. View "Lucky Chances, Inc. v. Cal. Gambling Control Com." on Justia Law

POM of Kansas, LLC, owns and distributes Dragon's Ascent, an arcade game where players shoot dragons for prizes redeemable for cash. Concerned about the game's legality under Kansas law, POM sought approval from state agencies, which declined to provide a formal opinion. POM proceeded with the game's launch and filed a lawsuit seeking a declaratory judgment that the Kansas Expanded Lottery Act does not apply to Dragon's Ascent, that the game complies with Kansas' criminal gambling statutes, and that those statutes are unconstitutionally vague.The Shawnee District Court dismissed the claims against the Kansas Racing and Gaming Commission and the Douglas County District Attorney, ruling that no real controversy existed as neither had investigated the game nor threatened prosecution. The court retained the Kansas Attorney General in the case due to the constitutional challenges raised. The district court later dismissed POM's claims for lack of subject-matter jurisdiction and ruled against the constitutional challenges on the merits.The Kansas Supreme Court reviewed the case and focused on the issue of standing. The court held that POM lacked standing to seek a declaratory judgment about the Kansas Expanded Lottery Act because no defendant suggested the Act applied to Dragon's Ascent. The court also found that POM lacked standing to seek a declaration that Dragon's Ascent is lawful under Kansas criminal gambling statutes, as there was no credible threat of prosecution or seizure of the devices. Finally, the court concluded that POM lacked standing to raise a constitutional vagueness challenge to the gambling statutes, as there was no credible threat of prosecution.The Kansas Supreme Court affirmed the district court's dismissal of POM's claims regarding the Expanded Lottery Act and the legality of Dragon's Ascent, vacated the ruling on the constitutional vagueness challenge, and remanded the matter for dismissal. View "POM of Kansas v. Kobach" on Justia Law

Maverick Gaming LLC, a casino gaming company, filed a lawsuit challenging the State of Washington's tribal-state compacts that allow sports betting on tribal land. Maverick argued that these compacts violate the Indian Regulatory Gaming Act (IGRA), the Equal Protection Clause, and the Tenth Amendment. Maverick sought to invalidate the gaming compacts and amendments that permit sports betting on tribal lands, which would allow them to offer similar gaming activities at their cardrooms.The United States District Court for the Western District of Washington dismissed Maverick's lawsuit. The court found that the Shoalwater Bay Indian Tribe, which intervened for the limited purpose of filing a motion to dismiss, was a required party under Federal Rule of Civil Procedure 19(a). The court determined that the Tribe had a legally protected interest in the lawsuit that could be impaired or impeded in its absence. The court also concluded that the Tribe could not be feasibly joined in the litigation due to its sovereign immunity. Consequently, the court ruled that the litigation could not proceed in equity and good conscience without the Tribe and dismissed the case.The United States Court of Appeals for the Ninth Circuit affirmed the district court's dismissal. The Ninth Circuit agreed that the Tribe was a required party with a substantial interest in the legality of its gaming compact and sports betting amendment. The court also found that the federal government could not adequately represent the Tribe's interests, as their interests diverged in meaningful ways. The court held that the Tribe's sovereign immunity prevented its joinder, and the litigation could not proceed without the Tribe. The court rejected Maverick's argument that the public rights exception should apply, as the suit threatened the Tribe's legal entitlements and sovereignty. View "Maverick Gaming LLC V. United States" on Justia Law

Lucky Chances, Inc., Rommel Medina, and Ruell Medina (collectively, Licensees) had their gambling licenses renewed by the California Gambling Control Commission (Commission) with additional conditions. The Commission also imposed a 14-day suspension, stayed it, and ordered a monetary penalty based on findings that Rene Medina, a disqualified person, was materially involved in their gambling operation. The trial court issued a writ of administrative mandamus, ordering the Commission to reconsider the penalty, limiting it to $20,000 per violation.The Licensees appealed, arguing that the imposition of any discipline was unauthorized. The Commission cross-appealed, contending the trial court misinterpreted the relevant regulations and statutes. The Court of Appeal of the State of California, Third Appellate District, reviewed the case.The appellate court concluded that the Commission was authorized to impose additional license conditions based on its findings. However, it determined that the Commission could not use California Code of Regulations, title 4, section 12554, subdivision (d) to impose discipline because the Commission did not find that the Licensees violated any relevant law, regulation, or previously imposed license condition. The court modified the judgment to order the Commission to reconsider the discipline imposed in a manner consistent with its opinion and affirmed the judgment as modified. View "Lucky Chances, Inc. v. Cal. Gambling Control Com." on Justia Law

KalshiEx LLC, a regulated commodities exchange, sought to offer "Congressional Control Contracts" allowing individuals to bet on the outcome of the November 2024 congressional elections. The Commodity Futures Trading Commission (CFTC) prohibited these contracts, arguing they constituted gaming or election gambling, which is illegal in many states. Kalshi challenged this decision under the Administrative Procedure Act, claiming the CFTC's determination was arbitrary and capricious.The U.S. District Court for the District of Columbia ruled in favor of Kalshi, finding that the CFTC erred in categorizing the contracts as gaming or gambling. The court vacated the CFTC's decision, reasoning that the term "gaming" did not apply to election contracts and that the contracts did not involve illegal activity under state law. The CFTC then sought a stay of the district court's judgment while it pursued an appeal.The United States Court of Appeals for the District of Columbia Circuit reviewed the CFTC's emergency motion for a stay pending appeal. The court denied the motion, concluding that the CFTC failed to demonstrate that it or the public would suffer irreparable harm without a stay. The court noted that the CFTC's concerns about potential harms, such as market manipulation and threats to election integrity, were speculative and not substantiated by concrete evidence. The court left open the possibility for the CFTC to renew its stay request if more concrete evidence of irreparable harm emerged during the appeal. The administrative stay was dissolved. View "KalshiEX LLC v. CFTC" on Justia Law

In 2020, a federal grand jury indicted David DeQuattro, an architect, and Cedric Cromwell, Chairman of the Mashpee Wampanoag Tribal Council and President of the Mashpee Wampanoag Gaming Authority. They were charged with various federal offenses, including bribery and extortion, related to Cromwell allegedly soliciting and DeQuattro allegedly providing checks and other items of value to protect a contract between DeQuattro's firm and the Gaming Authority for building a casino on tribal land.The United States District Court for the District of Massachusetts held a jury trial where DeQuattro was convicted of one count of federal-program bribery, and Cromwell was convicted of two counts of federal-program bribery and multiple counts of Hobbs Act extortion. However, the District Court later entered a judgment of acquittal on the Hobbs Act-related counts, determining that the Hobbs Act did not clearly abrogate tribal immunity. Both defendants appealed their § 666 convictions, and the government cross-appealed the judgment of acquittal on the Hobbs Act counts.The United States Court of Appeals for the First Circuit reviewed the case. The court reversed both the § 666 convictions and the judgment of acquittal. The court found that the evidence did not suffice to show that the RGB contract was "business" of the Tribe, as required under § 666, because the Gaming Authority, which entered the contract, was a separate legal entity from the Tribe and received almost all its funding from a third party. The court also reversed the District Court's judgment of acquittal on the Hobbs Act convictions, holding that tribal officials do not enjoy immunity from federal criminal prosecution and that the evidence was sufficient to show Cromwell's intent to engage in a quid pro quo arrangement. The case was remanded for further proceedings consistent with this opinion. View "United States v. Dequattro" on Justia Law