Justia Gaming Law Opinion Summaries

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 In 1994, the Fifth Circuit held that the Restoration Act superseded IGRA.In 2016, the Tribe began offering bingo, including “electronic bingo.”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

The Supreme Judicial Court affirmed in part and reversed in part the judgment of the superior court dismissing FBT's claim against the Massachusetts Gaming Commission alleging intentional interference with a contract and granting summary judgment on the remaining regulatory taking claim, holding that summary judgment on the regulatory takings claim was improper.Plaintiff brought this suit against the Commission alleging various claims including tortious interference with contract and a regulatory taking after the Commission refused to allow Plaintiff to receive a "casino-use premium" on the sale of a parcel of land in Everett. The superior court dismissed the tortious interference claim and granted summary judgment on the regulatory takings claim. The Supreme Judicial Court reversed the grant of summary judgment on the regulatory takings claim, holding that there were material disputed facts at issue precluding summary judgment. View "FBT Everett Realty, LLC v. Massachusetts Gaming Commission" on Justia Law

Plaintiff, a non-profit group composed of small business owners who fish in the Bay Area, sued various government agencies seeking to prevent the enforcement of a commercial fishing prohibition that applies generally in national parks. Plaintiff claims that the Golden Gate National Recreation Area (GGNRA) does not confer with National Park Service with the ability to regulate offshore waters. The district court granted summary judgment to the government entities.The Ninth Circuit affirmed, finding that the text and structure of the GGNRA Act confirm that Congress has given the Park Service administrative jurisdiction over the waters in question. Nothing in the GGNRA Act supports the Plaintiff's position, that the Park Service must first establish a property interest in the waters from the State of California. View "SAN FRANCISCO HERRING ASSOC. V. USDOI" on Justia Law

After a hearing, the California Gambling Control Commission (Commission) revoked and refused to renew the gambling license of cross-appellant Eric Swallow. The Commission also imposed a monetary penalty and costs against Swallow. Swallow petitioned the trial court for a writ of mandate, challenging the revocation and nonrenewal of his gambling license, the amount of the monetary penalty, and the costs. The trial court granted Swallow’s petition in part and denied it in part, concluding the Commission did not violate Swallow’s due process rights when it revoked and refused to renew Swallow’s gambling license, except that the Commission may have relied on unproven misconduct. The trial court therefore remanded to the Commission “to ensure that Swallow is not disciplined based on misconduct that was not proven.” The trial court also concluded the amount of the monetary penalty imposed by the Commission was not supported by law, and the costs could only be assessed by the ALJ on remand. It therefore vacated the penalty and costs imposed and remanded for the Commission to redetermine the amount of the penalty and to refer the issue of costs to the ALJ. Both the Commission and Swallow appealed. The Court of Appeal concluded: (1) Business and Professions Code section 19930(c), when considered within the statutory and regulatory framework of the Gambling Control Act, did not authorize the monetary penalty; (2) the Commission had jurisdiction to revoke Swallow’s gambling license; (3) the Commission did not violate Swallow’s due process rights; (4) Swallow failed to present a proper argument challenging the sufficiency of the evidence; and (5) the trial court properly remanded the issue of costs for further proceedings. The Court modified the judgment granting the peremptory writ of mandate to order the Commission to reconsider the monetary penalty in a manner consistent with its opinion instead of the trial court’s order. View "Swallow v. Cal. Gambling Control Commission" on Justia Law

Blizzard Entertainment, Inc. (Blizzard) appealed an order denying its motion to compel arbitration. B.D., a minor, played Blizzard’s online videogame “Overwatch,” and used “real money” to make in-game purchases of “Loot Boxes” - items that offer “randomized chances . . . to obtain desirable or helpful ‘loot’ in the game.” B.D. and his father (together, Plaintiffs) sued Blizzard, alleging the sale of loot boxes with randomized values constituted unlawful gambling, and, thus, violated the California Unfair Competition Law (UCL). Plaintiffs sought only prospective injunctive relief, plus attorney fees and costs. Blizzard moved to compel arbitration based on the dispute resolution policy incorporated into various iterations of the online license agreement that Blizzard presented to users when they signed up for, downloaded, and used Blizzard’s service. The trial court denied the motion, finding a “reasonably prudent user would not have inquiry notice of the agreement” to arbitrate because “there was no conspicuous notice of an arbitration” provision in any of the license agreements. The Court of Appeal disagreed: the operative version of Blizzard’s license agreement was presented to users in an online pop-up window that contained the entire agreement within a scrollable text box. View "B.D. v. Blizzard Entertainment" on Justia Law

The Court of Appeals reversed the decision of the appellate division modifying and affirming the judgment of Supreme Court declaring that article 14 of the Racing, Pari-Mutuel Wagering and breeding Law violates the constitutional prohibition on gambling to the extent it authorizes interactive fantasy sport (IFS) contests, holding that Plaintiffs did not meet their burden to demonstrate beyond a reasonable doubt that article 14 is unconstitutional.In 2016, the legislature enacted article 14, which authorizes and regulates IFS contests, upon determining that IFS contests are not unconstitutional gambling activities because they are skill-based competitions in which contestants have some influence over the outcome of the fantasy contests. At issue was whether the legislature properly determined that IFS contests authorized in article 14 are not unconstitutional. The Court of Appeals held that the legislature's conclusion that IFS contests are not "gambling" is consistent with precedent delineating the parameters of that term. View "White v. Cuomo" on Justia Law

The Supreme Court held that chance predominated over skill in Plaintiffs' new video game and, therefore, this game was a game of chance that violated N.C. Gen. Stat. 14-306.4, which prohibits the operation of sweepstakes conducted through video games of chance.Plaintiffs sued Governor Roy Cooper and certain state law enforcement officials seeking a declaratory judgment that Defendants' operation of a sweepstakes through video game kiosks does not violate N.C. Gen. Stat. 14-306.4, which criminalizes certain video sweepstakes. The trial court held that the sweepstakes game was lawful, but the court of appeals reversed. The Supreme Court modified and affirmed, holding that Plaintiffs' new game was a video game of chance prohibited by section 14-306.4. View "Gift Surplus, LLC v. State ex rel. Cooper" on Justia Law

Debtor, licensed under North Dakota’s pari-mutuel wagering system, filed for bankruptcy in 2004. Ten years later, the district court ruled that the state was not authorized to collect certain taxes from the Debtor. North Dakota agreed to pay the estate $15 million. Creditors asserted claims. Although the state constitution provides that “the entire net proceeds of such games of chance are to be devoted to educational, charitable, patriotic, fraternal, religious, or other public-spirited uses,” North Dakota did not raise the rights of any charities.In 2018, the bankruptcy court ruled on the claims. North Dakota filed a new proof of claim. The court concluded that the state lacked parens patriae authority to assert claims on behalf of charities. The Eighth Circuit Bankruptcy Appellate Panel (BAP) remanded. On remand, the state attempted to add a breach of contract claim. The bankruptcy court denied that motion and concluded that the contract claim had no merit. The court also rejected a constitutional-statutory claim.The BAP affirmed, rejecting arguments that North Dakota law requires that charities, not Debtor, recover the remaining tax settlement funds and that the court erred when it disallowed the contract claim. The state constitution concerns the legislature and does not govern the actions of private parties such as Debtor. Debtor paid the taxes originally; the reimbursement of those improperly-paid taxes should inure to the benefit of Debtor after distribution under the bankruptcy priority scheme. View "North Dakota v. Bala" on Justia Law

The Supreme Court affirmed the circuit court's order dismissing Appellant's complaint for declaratory and injunctive relief, holding that there was no error.Appellant was cited for aiding and abetting two individuals in his boat who were violating Arkansas Game and Fish Commission (AG&FC) Regulation N1.03(B)(3)(i)(b), which prohibits using barbed hooks in designated areas, and Regulation 1.00-C. Appellant filed a complaint seeking declaratory judgment that the two regulations are unconstitutional because they are in direct conflict with Ark. Code Ann. 35, 8. The circuit court dismissed the complaint, determining that there was no conflict between the AG&FC regulations and the Arkansas Constitution. The Supreme Court affirmed, holding that the regulations in question were not unconstitutional. View "Peveto v. State" on Justia Law