Justia Gaming Law Opinion Summaries

Skillz provides a mobile platform that hosts games in which players compete for cash prizes. To participate in paid-entry competitions, a user must save the player account; after entering a date of birth, the user must tap a box with the word “Next.” Below the “Next” box is the advisory statement: “By tapping ‘Next,’ I agree to the Terms of Service and the Privacy Policy.” A hyperlink, if tapped, takes the user to Skillz’s terms of service. Gostev saved a Skillz player account in 2019. The Terms of Service then had 15 pages.Gostev sued Skillz, alleging that its games constituted illegal gambling, predatory and unlawful practices, and violated the Unfair Competition Law and the Consumers Legal Remedies Act, Gostev alleged the arbitration agreement was unenforceable. Skillz argued that Gostev’s challenges to the enforceability of the arbitration provision had to be submitted to an arbitrator.The court of appeal affirmed a finding that the arbitration agreement was procedurally and substantively unconscionable. The court noted provisions that a plaintiff’s damages are limited, the arbitration must occur in San Francisco, a plaintiff only has one year to bring his claim, the parties must split the arbitration fees and costs, and the defendant can obtain equitable relief without posting a bond or security. Unconscionability ”permeates the agreement such that severance is unavailable,” View "Gostev v. Skillz Platform, Inc." on Justia Law

The Supreme Court affirmed the judgment of the district court setting aside Resolution 2077, which was adopted by the Campbell County Board of Commissioners in 2021, holding that there was no error.Resolution 2077 "revoked and superseded" previous resolutions approving Petitioners - Wyoming Horse Racing, LLC and Wyoming Downs, LLC - to conduct simulcast operations under Wyo. Stat. Ann. 11-25-102(a)(vii)(B) and placed conditions on all future approvals. Petitioners filed a petition for judicial review, arguing that the resolution exceeded the statutory authority of Campbell County under the Wyoming Pari-Mutuel Act, Wyo. Stat. Ann. 11-25-101 et seq. The Supreme Court affirmed, holding that the County had authority under the Pari-Mutuel Act to revoke its prior approvals of Petitioners' simulcast operations. View "Campbell County Bd. of Commissioners v. Wyo. Horse Racing, LLC" on Justia Law

In consolidated appeals, Brighton Ventures 2 LLC and the St. John Life Center ("the Life Center") appealed a circuit court judgment order forfeiting $446,897.19 that was found to have been used as bets or stakes as part of an illegal gambling operation. The City of Brighton ("the City") had an ordinance permitting the establishment of charitable bingo operations within its city limits. In early 2019, an application for a charity-bingo business license was submitted to the City on behalf of Super Highway Bingo ("the casino"); the Life Center was listed as the named charity. In February 2019, the City issued the requested business license, and, in March 2019, the casino officially opened. According to the record, Brighton Ventures was responsible for the day- to-day operations of the casino and, in exchange for its management services, received 85% of the casino's profits. The Life Center, in return, received 15% of the casino's profits. Around the time the casino opened, the Alabama Attorney General's Office began an investigation into "electronic bingo" activity occurring there. "Electronic bingo is illegal in Alabama." An undercover investigator from the Attorney General's office was able to play electronic bingo games at the casino. The State executed multiple search warrants at the casino during which it seized, among other things, over 200 "electronic bingo" machines and large sums of cash. Relevant to these appeals, the State then initiated separate actions, petitioning the circuit court for an in rem civil forfeiture of the $446,897.19. Brighton Ventures and the Life Center denied that the funds seized were "used as bets or stakes in gambling activity" as described in § 13A-12-30(c) and argued that the State had unlawfully seized the funds. They also asserted counterclaims in which they alleged, among other things, that forfeiture of the funds constitutes an "excessive fine" in violation of the Excessive Fines Clause of the Eighth Amendment to the United States Constitution. The Alabama Supreme Court found no error in the circuit court's judgment and affirmed the order ordering the forfeiture. View "Brighton Ventures 2 LLC v. Alabama" on Justia Law

The Eighth Circuit reviewed a case for the second time regarding “whether a South Dakota tax on nonmember activity on the Flandreau Indian Reservation (the Reservation) in Moody County, South Dakota is preempted by federal law. On remand, and after a six-day video bench trial, the district court entered judgment in favor of the Tribe, concluding again that federal law preempts the imposition of the tax.   The Eighth Circuit reversed and remanded. The court explained that in light of guideposts from the Supreme Court, even with the evidence that the district court heard at trial, the court cannot conclude that the federal regulation in IGRA regarding casino construction is extensive. The court reasoned that even with a more factually developed record than the court considered on summary judgment, the Bracker balancing test does not weigh in favor of preemption under IGRA because the extent of federal regulation over casino construction on tribal land is minimal, the impact of the excise tax on the tribal interests is minimal, and the State has a strong interest in raising revenue to provide essential government services to its citizens, including tribal members. The district court thus erroneously entered judgment in favor of the Tribe based on IGRA’s preemption of the excise tax. View "Flandreau Santee Sioux Tribe v. Michael Houdyshell" on Justia Law

In 2017, the State of Alabama sued, among others, Epic Tech, LLC ("Epic Tech"); K.C. Economic Development, LLC, d/b/a VictoryLand ("KCED"); and Sheriff Andre Brunson, in his official capacity as sheriff of Macon County (referred to collectively as "the Macon County defendants"). At around that same time, the State sued, White Hall Enrichment Advancement Team d/b/a Southern Star Entertainment ("Southern Star") and White Hall (referred to collectively as "the Lowndes County defendants"). In each action, the State sought an order declaring the illegal gambling operations conducted by the defendants to be a public nuisance and related injunctive relief. The State's complaint in each action was also accompanied by a motion seeking the entry of an order preliminarily enjoining the defendants from engaging in illegal gambling operations. In case nos. 1200798 and 1210064, the State appealed Macon Circuit Court and Lowndes Circuit Court orders denying the State's requests for injunctive relief. In case no. 1210122, defendants/counterclaim plaintiffs White Hall Entertainment and the White Hall Town Council (referred to collectively as "White Hall"), cross-appealed the Lowndes Circuit Court's order dismissing their counterclaims against the State. The Alabama Supreme Court consolidated these appeals. In case no. 1200798, the Court reversed the Macon Circuit Court order denying the State's request for preliminary injunctive relief and remanded the matter for that court to enter, within 30 days, a preliminary injunction enjoining the defendants' gambling operations in Macon County; in case no. 1210064, the Court reversed the Lowndes Circuit Court order denying the State's request for permanent injunctive relief and remanded the matter for that court to enter, within 30 days, a permanent injunction enjoining the defendants' gambling operations in Lowndes County; and in case no. 1210122, the Court affirmed the Lowndes Circuit Court's order dismissing White Hall's counterclaims. View "White Hall Entertainment, et al. v. Alabama" on Justia Law

Plaintiffs are members of the Shinnecock Indian Nation and assert an ancestral right to fish in the Shinnecock Bay without interference. Over the past decade, state officials ticketed and prosecuted Plaintiffs for violating state fishing laws. Plaintiffs sought declaratory and injunctive relief to prevent the further enforcement of the regulations as well as damages based on allegations of discrimination in past enforcement. The district court granted summary judgment to Defendants.The Second Circuit found that Ex Parte Young applies to Plaintiffs’ fishing-rights claims against the New York State Department of Environmental Conservation (“DEC”) officials— but not against the DEC itself—because Plaintiffs allege an ongoing violation of federal law and seek prospective relief against state officials. Thus, the district court erred in granting summary judgment to the DEC officials on Plaintiffs’ claims for declaratory and injunctive relief. However, the district court properly granted summary judgment on the discrimination claims because there is no evidence in the record that would permit an inference of discriminatory intent. View "Silva v. Farrish" on Justia Law

The Chicken Ranch Rancheria of Mewuk Indians (“tribes”) alleged that California violated Indian Gaming Regulatory Act (“IGRA”) by failing to act in good faith in the parties’ negotiations for compacts for the tribes to conduct high-stakes Las Vegas style casino gambling, known as Class III gaming. The district court concluded that California’s demand for tribal enforcement of state domestic support orders “pulled negotiations into a field wholly collateral to the operation of gaming facilities” and thus constituted “per se evidence of bad faith.” The district court concluded that other disputed provisions were “somewhat connected” to gaming and thus not a per se violation of the State’s good-faith duty, but California nevertheless was required to provide “meaningful concessions” in exchange for demanding these provisions, and the State’s failure to do so was a failure to negotiate in good faith, triggering IGRA’s remedial provisions.   The Ninth Circuit affirmed, on different grounds, the district court’s summary judgment in favor of the tribes. The court held that through its insistence on family law, environmental law, and tort provisions, California substantially exceeded IGRA’s limitation that any Class III compact provision be directly related to the operation of gaming activities. The court further held that when, as here, a State seeks to negotiate for compact provisions that fall well outside IGRA's seven permissible topics of negotiation, as set forth in an exhaustive list in 25 U.S.C. Section 2710(d)(3)(C), the State has not acted in good faith. View "CHICKEN RANCH RANCHERIA V. STATE OF CALIFORNIA" on Justia Law

The State of Texas sought to enjoin the Ysleta del Sur Pueblo from holding live-called and electronic bingo. The district court granted the injunction and the Fifth Circuit upheld it under its prior decisions.   In light of the Supreme Court’s decision in Texas v. Ysleta del Sur Pueblo, 955 F.3d 508 (5th Cir. 2020), overruled by No. 20- 493, 2022 WL 2135494 (2022), the Fifth Circuit vacated the district court’s judgment and remanded for further proceedings. The court wrote that the Supreme Court granted the Pueblo’s petition and rejected Texas’s contention that Congress has allowed all of the state’s gaming laws to operate as surrogate federal law enforceable on the Ysleta del Sur Pueblo Reservation.   Under the Court’s interpretation of the Restoration Act, “if a gaming activity is prohibited by Texas law”—that is, absolutely “banned in Texas”—then “it is also prohibited on tribal land as a matter of federal law.” But if the gaming activity is merely regulated by Texas law—that is, “by fixing the time, place, and manner in which the game may be conducted”—then it’s only “subject to tribal regulation” and “the terms and conditions set forth in federal law, including [the Indian Gaming Regulatory Act] to the extent it is applicable.” View "State of TX v. Ysleta del Sur Pueblo, et al" on Justia Law

In 2003, the Alabama Legislature and the citizens of Greene County voted to allow nonprofit organizations in that county to operate bingo games for fundraising purposes. Greenetrack, Inc. ("Greenetrack"), which was not a nonprofit organization, almost immediately began offering live and electronic bingo games at its gambling facility. From 2004 to 2008, Greenetrack reaped vast profits under the guise that its whole casino-style bingo operation was constantly being leased and operated by a revolving slate of local nonprofit organizations, whose nominal role earned them a tiny fraction of the bingo proceeds. Eventually, the Alabama Department of Revenue ("the Department") audited Greenetrack, found that its bingo activities were illegal, and concluded that it owed over $76 million in unpaid taxes and interest. Following a decade of litigation, the Alabama Tax Tribunal voided the assessed taxes on the threshold ground that Greenetrack's bingo business (regardless of its legality) was tax-immune under a statute governing Greenetrack's status as a licensed operator of dog races. The Department appealed, and the Alabama Supreme Court reversed, rejecting the statutory analysis offered by the Tax Tribunal and circuit court. Judgment was rendered in favor of the Department. View "Alabama Department of Revenue v. Greenetrack, Inc." on Justia Law

In 1968, Congress recognized the Ysleta del Sur Pueblo Indian tribe. In 1983, Texas renounced its trust responsibilities with respect to the Tribe and expressed opposition to any new federal legislation that did not permit the state to apply its gaming laws on tribal lands. Congress restored the Tribe’s federal trust status in the 1987 Restoration Act, “prohibiting” all “gaming activities which are prohibited by the laws of the State of Texas.” Congress then adopted the Indian Gaming Regulatory Act (IGRA), which permitted Tribes to offer class II games—like bingo—in states that “permi[t] such gaming for any purpose by any person, organization or entity,” 25 U.S.C. 2710(b)(1)(A). IGRA allowed Tribes to offer class III games—like blackjack and baccarat—only pursuant to negotiated tribal/state compacts. Texas refused to negotiate a compact regarding class III games. In 1994, the Fifth Circuit held that the Restoration Act superseded IGRA.In 2016, the Tribe began offering bingo, including “electronic bingo.” The Fifth Circuit upheld an injunction, shutting down all of the Tribe’s bingo operations.The Supreme Court vacated. The Restoration Act bans, on tribal lands, only those gaming activities also banned in Texas. Texas laws do not “forbid,” “prevent,” or “make impossible” bingo operations but allow the game according to rules concerning time, place, and manner. Texas’s bingo laws are regulatory, not prohibitory. When Congress adopted the Restoration Act, Supreme Court precedent held that California’s bingo laws—materially identical to Texas’s laws—were regulatory and that only “prohibitory” state gaming laws could be applied on the Indian lands in question, not state “regulatory” gaming laws. The Restoration Act provides that a gaming activity prohibited by Texas law is also prohibited on tribal land as a matter of federal law. Other gaming activities are subject to tribal regulation and must conform to IGRA. View "Ysleta del Sur Pueblo v. Texas" on Justia Law