California vs Iipay Nation of Santa Ysabel

8/10/2019 California vs Iipay Nation of Santa Ysabel

1/88

1

2

3

4

5

6

7

8

9

10

11

12

KAMALA D. HARRIS

Attorney General.of California

SARA

J.

DRAKE

State Bar No. 102565

Senior Assistant Attorney General

WILLIAMP TORNGREN

State

BarNo.

58493

Depu x Attorney General

1300 I Street

1

Suite 125

P.O.

Box

944255

Sacramento, CA 94244-2550

Telephone: (916) 323-3033

Fax: (916) 313-1319

E-mail: William.Tol1.}gren@doj ;ca.gov

Attorneys

or

Plaintiff State aj California

IN THE UNITED STATES DISTRICT COURT

FOR

THE SOUTHERN DISTRICT OF CALIFORNIA

13 STATE OF

CALIFORNIA,.

Case No.

14

15

16

17

18

19

20

21

22

23

24

Plaintiff,

v.

IIPAY NATION OF SANTA

YSAJ3EL, also known as SANTA

YSABEL

-BAND

OF-DIEGUENO

MISSION INDIANS; a federal Y

recQg_nized. Ind.iall

r i b ~ ~

SANTA

YSABEL

INTERACT

v a tribal

economic devehwment. entity.

SANTA

YSABEL

GAMING COMMISSION,

DAVID

CHELETTE, l>AVID .

VIALPANDO,

ANTHONY .

BUCARO,

MICHELLE MAXCY,

VIRGIL PEREZ, alld BRANDlE

TAYLOR,

Defendants.

COMPLAINT FOR

INJUNCTIVE

AND DECLARATORY RELIEF

25 The State of California (State) alleges:

26

STATEMENT OF THE CASE

27 1 This action seeks appropriate injunctive reliefto prevent unlawful Internet

28 gambling; Defendant I-ipayNationofSantaYsabel, also known as Santa Ysabel

1

Complaint For Injunctive

And

Declaratory Relief

'14CV2724 NLSAJB

Case 3:14-cv-02724-AJB-NLS Document 1 Filed 11/18/14 Page 1 of 14


2/88

1

Band

ofDie.gueno Mission Indians (Tribe), has begun to offer a facsimile

ofbingo

2 over the Internet to bettors, who are not located on the

Tribe s

Indian lands.

In

3 addition to violating state and federal law, the Tribe s conduct materially breaches

4 the tribal-state class III gaming compact (Compact) between the Tribe. and the

5 State. This constitutes an imminent threat to the public health, safety, and welfare

6 of the State s residents, and a threat to good order. Therefore, this Court should

7 issue orders temporarily restraining, and permanently enjoining, the

Tribe s

8 offering and conducting Internet gambling in breach

of

the Compact and in

9 violation of state and federal law. This Court further should declare that the

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Internet gambling materially breaches the Compact.

JURISDICTION

ND

VENUE

2. This Court has jurisdiction pursuant to 28 U.S.C.

1331 because the

State s claim arises under federal statutes and the federal common law. This Court

also has jurisdiction pursuant to 25 U.S.C. 2710(d)(7)(A)(ii) because this

l:l ction

is

initiated by the State to enjoin conduct related to the

Tribe s

class III gaming

activity that violates its Compact with the State. This Court further has jurisdiction

under

31

U ~ S C

5365(a) because the State brings

this

action to prevent and

restrain restricted transactions that violate the Unlawful Internet Gambling

Enforcement Act.

3. Venue is proper

in

his District because the State s claims arise from

conduct occurring in part, and the underlying Compact is to be performed, in the

Southern District of California.

GENER L LLEG TIONS

The

o m p ~ c t

and Waiver o Sovereign Immunity

4.

On

September 8,

2003,the

Tribe and the State entered into the Compact

- . . . .

pursuantto

the_Indian Gaming Regulatory Act (IGRA), 25 U.S.C.

2701-2721,

18

U.S.C.

1166-1167. A true and correct copy

ofthe Compact

is Exhibit 1 to

.

this complaint and incorporated

by

reference. On December 22, 2003, the Compact

2

Complaint For Injunctive And

Declaratory Relief



3/88

1 became effective upon its pqblication in the Federal Register. 68 Fed. Reg. 71131

2

(Dec. 22, 2003).

3 5. Section 2.13 .1 of the Compact defines the terms Santa Y sahel Tribe'' or

4 Tribe to include the Tribe, as well as its authorized officials and agencies.

5 (Compact,

6

2.13.1.) Based upon information obtained from the National Indian

6 Gaming Commission (NIGC), the Tribe's website, and the press release

7 announcing the Internet gambling's launch, the State is informed and believes and,

8 therefore, alleges that each defendant, other ~ a n the Tribe itself, is an official or an

9 agency of the Tribe, as follows:

10 a. Santa Ysabel Interactive is a tribal economic development entity

11

that operates the Internet gambling.

12

13

b. David Chelette is Santa Ysabel Interactive's president.

c.

The Santa Ysabel Tribal Gaming Commission (Gaming

14

Commission) is the tribal entity that purports toregulate the Internet gambling The

. . . . . . - .. .

15 State is informed and believes and, therefore, alleges that the Gaming Commission

16 is a ''Tribal Gaming Agency within the meaning of the Compact.

See

Compact,

17 7, . 2 0 ~

18 d. David Vialpando is the Gaming Commission's chairman.

19

e.

Anthony Bucaro is the Gaming Commission's gaming/compliance

20 agent.

21

f.

Michelle Maxcy is the Gaming Commission's background

22 investigator.

23

g. Virgil Perez is the Tribal Chairman.

24

h.

Brandie Taylor is the Tribe's Vice-Chairwoman.

25 6 The Compact establishes the parties' rights, privileges, duties, and

26 obligations with respect to class III gaming on the Tribe's Indian lands.

27

7.

The Compact's purposes and objectives include, among other things,

28 ensuring a fair and honest gaming operation in accordance with IGRA, promoting

3

Complaint For Injunctive

And

Declaratory Relief



4/88

1 ethical practices, and maintaining a high level

of

integrity in the Tribe's gaming.

2 (Compact, 4, 1.0.)

3 8 The Compact provides that the Tribe may combine and operate in,its

4 gaming facility any kinds

of

gaming permitted under law,

except to the extent

5

limited under IGRA

. (Compact, 8, 4.2 (emphasis added).)

i 9 Section 3.0

of

the Compact provides that the Tribe shall not engage in

7 class Ill gaming that is not expressly authorized in the Compact. Under section 4.1

8

the Tribe is authorized and permitted to operate (a) gaming devices- i.e., slot

9 machines, (b) banking and percentage card games, and (c} any devices or games

10 that are authorized under state law to the California State Lottery,

provided that the

11

[Tribe] will not offer such games through.use

of

he Internet unless others in the

12

st te re permitted to do so under state nd ederal law. ;

(Compact,8,

4.l c)

13

( m p h s i s added).)

14 10. The Compact provides that a tribal gaming agency, as.designated under

15

tribal law, shall conduct on-site gaming regulation and control ''in order to enforce

16 the terms of this Compact [and] I GRA with respect to the business enterprise

1

7

that offers and operates class III gaming activities and the facilities that serve that

18 business enterprise. (Compact, 22,

7.1.) The tribal gaming agency is, among

19 other things, to ensure

e n f o r ~ m e n t of

all relevant laws and rules and to prevent

20 illegal activity occurring with regard to the business enterprise that offers and

. . . .

21 operates class III gaming activities and within the facilities that serve that business

22 enterprise.

23 11 Gaming conducted under the Compact must comply with ordinances

24 approvedin accordance with IGRA. (Compact, 11,

6.l(a)).) The gaming agency

. 25 shall transmit copies ofits rules, regulations, and the like, as well as gaming

26 ordinance amendments,. to the California Gambling Control Commission within

27 twenty days following adoption or amendment. (Compact, 11,

6.1(c).) Under the

28 Compact, the Tribe is not to permit persons under the age oftwenty-one years to be

4


Declaratory Relief



5/88

1

2

3

4

5

6

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

present in any room or area in which class

III

gaming activities are conducted.

(Compact,

11, 6.3.)

12. Section

8 2ofthe

Compact provides:

Nothing in this Gaming Compact affects-the civil

.or crimin_aljurisdiction

of

the State under Public Law

280 08 . ~ . C . Sec. 1162; 28 U.S.C. Sec. 1360) or

JGM, t9

the extent applicable. ID addition., criminal .

JUnsdtctlon to enforce t a t ~ gambhng laws Is transferred

to the StateP._.ursuant t9

18

U.S.C. I166(d), P.rovided

that no Gammg Activity conducted by the

Tnbe

pursuant

to this. Gaming Compact may be deemed to be a civil or.

criminal violation of any law

of

the State.

13. The Compact requires that the parties meet and confer in a good faith

attempt to resolve disputes that occur under it. This requirement is "without

prejudice to the right of either party to seek injunctive relief against the other when

circUinstances are deemed to require immediate relief." (Compact, 27,

9.1.)

14. Section

9.4

of the Compact provides for a limited waiver of sovereign

immunity as follows:

t:.t} In the event t iat a

giSP.l te

is be resolved in

federal.court

; as provtded m this Section 9, the State

and fue

S a i 1 t ~ 1

ysabel'I):ibe expressly consent to be. sued

thh_

r e i 1 1 . ~ ~ d w . d a i t h v e

any

Immumty therefrom that they may

. ave p r p v l _ ~ ,_-_.at: . .

.

0} The

g ~ s p l t ~

litnited solely to issues arising

under this. Grunmg ,Compac;t; -

(2) Neither side makes any claim for monetary

damages (that is,

on.ly

ipjunctive, specific performance,.

or declaratory rehef Is sought); and _ _

. (3) No person or entity other than the Santa

Y sahel 'tribe and the State is party to the action

15. Section 11.2.1(c) ofthe Compact empowers either party to bring an

action in federal court, after providing a sixty-day written notice

of

an opportunity

to cure any alleged breach, for a declaration that the other party has materially

breached

the

Compact. Upon issuance

of

that declaration, the complaining party

unilaterally may tertriif1ate the Compact.

5


Declaratory Relief



6/88

1

2

3

4

5

6

8

9

1

11

12

13

14

15

16

17

18

19

20

21

22

23

Tribal Gaming Under IGR

16. Congress passed IGRA to provide a statutory basis for the operation

of

gambling by Indian tribes. Among other things, IGRA created the NIGC.

17. IGRArestricts tribal gaming to Indian lands, which include Indian

reservations and lands held in trust

by

the United States for the benefit

of

any

Indian tribe. 25

U.S.C.

2703(4). IGRA does

not

authorize tribal gaming outside

of Indian lands. See 25 U.S.C.

2710(b)(1), (d)(l).

18. IGRA divides tribal gaming into three classifications: class I, which

involves traditional forms of tribal gaming and social games solely for minimal

prizes; class II, which is bingo meeting certain criteria and some card games; and

class III, which is all forms

of

gaming

that

are not class I

or

class II. 25 U.S.C.

2703(6), (7), (8). Class III gaming includes banking card games, electronic

facsimiles

of

any

game of

chance, and slot machines

of

any kind.

25

U.S.C.

2703(7)(B). The NIGC defines an electronic facsimile to be

a

game played in an

electronic format that replicates a game of chance by incorporating all of the

characteristics ofthe game, except when, for bingo , the electronic format

b r o ~ e n s ~ ~ r t i c i p t i o n

by allowing multiple players

to

play with

or

against each

other rather than with or against a machine. 25 C.P.R. 502.8.

19. Class III gaming activities are lawful on Indian lands

onlyifthe

activities

are (a) authorized by a tribal ordinance

or

resolution approved by the NIGC's chair,

(b) located in.a state that permits such gaming, and (c) conducted in conformance

witha tribal-state compact. 25 U.S.C. 2710(d)(l).

20. IGRA waives sovereign immunity with respect to, and confers federal

24 district court jurisdiction over, any cause of action initiated by a State or Indian

25 tribe to enjoin class III gaming activity located on Indian lands and conducted in

26 violation

of

any Tribal-State compact. 25 U.S.C. 2710(d)(7)(A)(ii).

27

28

6

. Complaint For Injunctive

And

Declaratory Relief



7/88

1

2

3

4

5

6

7

8

9

10

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Unlawful Internet ambling

21. The Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA), 31

U.S.C.

5361-5367, defines unlawful Internet gambling as placing, receiving, or

otherwise transmitting a bet or wager by any means that involves the Internet

where such bet or wager is unlawful under any applicable Federalor State law in

the State or Tribal lands in which the e t h ~ initiated, received, or otherwise made.

31

U.S.C. 5362(1

O) A).

22. The UIGEA contains an intrastate exception for bets or wagers that (a)

occur exclusively within a single state, (b) are expressly authori:(;ed by state Jaw, (c)

are subject to state law or regulation requiring verifications reasonably designed to

block access to minors and persons located out

of

the state, and (d) do not violate

any provisions of enumerated federal laws including IGRA.

31

U.S.C.

5362(10)(B).

73. The UIGEA contains an intra-tribal exception for bets or wagers that (a)

occur exclusively within a single tribe's Indian lands as defined by IGRA, (b)are

authorized by ordinance and, for class III gaming, a compact, (c) are subject to an

ordinance that includes verifications ''reasonably designed to block access to

minors and persons located out

of

the applicable Tribal lands, and (d) do not

violate IGRA.

31

U.S.C.

5362(10)(C).

24. The

UIGEA prohibits a person engaged in the business

of

betting or

wagering from knowingly accepting credit, electronic fund transfers, checks, or the

proceeds

of

any other form

of

financial transaction in connection with another

person's participation in unlawful Internet gambling.

31

U.S.C. 5363.

25. The UIGEA confers original and exclusive federal district court

jurisdiction to prevent and restrain prohibited transactions. 31 U.S.C. 5365(a).

The UIGEA allows a state to pursue the remedies provided under its compaC?t ~ i t h

respect to a prohibited transaction that allegedly has been or will be initiated,

7


Declaratory Relief



8/88

1 received, or otherwise made on Indian lands (as that term is defined in [25 U.S.C.

2 2703( 4)]). 31 U.S.C. 5365(b )(3)(A)(ii).

3 alifornia Gambling Laws

4 26. The California Constitution broadly prohibits lotteries. Cal. Const. art.

5 IV, 19(a). It allows for the California State Lottery and bingo games for

6 charitable purposes. Cal. Const. art.

IV,

19(c), (d). t also allows the negotiation

7 and legislative ratification

of r i b a l ~ s t a t e

gaming compacts for the operation of slot

8 machines and for the conduct of lottery games and

banki1;1g

and percentage games

9 by federally recognized tribes on Indian lands in California. Cal. Const. art. IV,

10

19(f). The State's Legislature has found and declared that unregulated gambling

11

enterprises are inimical to the public health, safety, welfare, and good order. Cal.

12 Bus. Prof. Code 19.80 1 d).

13 27. California's statutory prohibitions relating to gambling as they existed on

14 November

6,

1984, have been constitutionalized. Hotel Employees nd Restaurant

15 Employees lnt lv. Davis, 21 Cal. 4th 585, 6 5 ~ 6 (1999). California statutes make

16

setting up and drawing a lottery, selling or furnishing a chance in a lottery, and

17

aidingor assisting in those acts, crimes. CaL Penal Code 320, 321, 322.

18 California Penal Code section 337a broadly prohibits keeping a place with devices

19 for the purpose

of

recording any bets or wagers, receiving anything

of

value bet or

20 wagered, recording bets or wagers, or offering or accepting any bets or wagers.

21

Prevailing

1,1pon

a person, through invitation or device,. to visit a place kept for the

22 purpose of illegal gambling is a crime. Cal. Penal Code 318. Every

l a c ~

used

-

23 for the purpose

of

illegal gambling is a nuisance. Cal. Penal Code 11225( a (1 ).

24 28. In the years following its creation pursuant to the California Constitution,

25

the California State Lottery has offered games, the names of which included

26

~ ~ b Th . 1 d . h 1 . . HB B Bl k

go. . ese games me u e, wit . out .

1m1tatwn,

. mgo . oxes, .ac. out

27

B. ' ' D' dB' d B' T'

5

N C l C . . S L

mgo, 1amon . mgo, an . mgo .. 1mes . o a I.t.orma tate otte.ry

28 game is permitted to be otiered through the Internet.

8


Declaratory Relief



9/88

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29.

California

laws

regarding charitable bingo require that each participant

in

a game

be

physically present at the time and place where the game

is

being

conducted.

E.g.

Cal. Penal Code 326.5(m). California laws regarding charitable

bingo generally prohibit using electronic or video displays in connection with the

game ofbingo.

E.g. Cal.

Penal Code 326.5(o). California does not expressly

authorize Internet bingo

as

required forUIGEA s intrastate exception. 31

U.S.C.

5362 1 O) B

).

The NIGC s Interpretations

30.

Interpreting

IGRA,

the NIGC

has

determined that bingo, or

a

bingowlike

game, has three elements: (a) it is played

for

prizes with cards bearing numbers or

other designations;

b)

multiple players cover the numbers when objects, similarly

numbered,

are

drawn or electronically determined; and

c)

the.game

is

won

by

the

first person covering a previously designated arrangement o numbers. Based on

these elements, the NIGC has determined that bingo requires participation beyond

hitting a start button and having numbers covered. The NIGC further has

determined that allowing a game system

to

cover the bingo .card, rather than the

player, incorporates

all

characteristics

o

the game

o

bingo into an electronic

machine and system, and renders such a system

an

electronic facsimile.

31. Interpreting IGRA, the NIGC has opined that i a particular aid to. a game

becomes a necessity, or encompasses all the ;l.Spects o a particular game, it ceases

to be a.teclu1ological aid and becqmes an electronic facsimile.

32. Because IGRA gaming

is

limited to Indian lands, the NIGC consistently

has concluded that tribes making Internet gambling available to persons not located

. -

on

Indian lands violate IGRA.

The Tribe s Internet Gambling Is Accessible Outside its Indian Lands

33.

On or about November

3, 2014,

the Tribe began

to

offer a facsimile o

bingo over the Internet

to

bettors, eighteen years or older, without regard

to

whethe

they are located

on

the Tribe s Indian lands. Under

the.

Tribe s facsimile, bettors

9


Declaratory Relief



10/88

1 use the Internet and

log

into the Tribe s bingo website

w w w . g e s e r t r o s ~ b i J 1 g < ; > . p o m ) .

2 The bettors

place

a bet

by

withdrawing money from accounts. Bettors fund their

3 accounts by credit card or other electronic funds transfer. The Tribe knowingly

4 accepts such funds. After the bet is placed, the game system plays the game

5 including covering the bingo card and determining the winner. The bettor s

6 participation is limited to electing the

amou11t

to bet and how many cards to play in

7 any game.

8 34. Based upon tribal representatives representations,

t ~ e

State is informed .

9 and believes and, therefore, alleges that the servers for, or other equipment integral

10

to, the Tribe s Internet gambling are located on the Tribe s Indian lands. The State

11

further is informed and believes and, therefore, alleges that the Tribe claims that

12 some portion,

if

not all,

of

the Internet gambling occurs on its Indian lands.

13

35

..

Persons, who are not located on the Tribe s Indian lands, can open

14 accounts and participate in the Tribe s Internet gambling. The State s investigators

.

.

.

15

opened an

a c c o u n ~

and participated in the Tribe s Internet gambling

fr om off of

the

16

Tribe s Indian lands.

O 0

, ,,,

17

36. Basedupon the NIGC s website and responses to inquiries, the State is

18

informed and believes and, therefore, alleges that the Tribe s gaming ordinance, as

19 approved by the NIGC s chair, does not expressly authorize Internet bets

or.

wagers

20

and the method by which they are initiated and received or otherwise made. The

21 State further is informed and believes and, therefore, alleges that the Tribe s

22 gaming ordinance, as approved by the NIGC s chair, does not include age and

23 location verification requirements. reasonably designed to block access to minors

.

.

...

24 and persons located outside the Tribe s Indian lands. The State also isinformed

25

and believes and, therefore, alleges that the Tribe s gaming ordinance, as approved

26 . by the

NIGC s

chair, does not include appropriate data security standards to preven

27 unauthorized access by any person whose age and current location has not been

28 verified. Finally, the State is informed and believes and, therefore, alleges that the

10


Declaratory Relief



11/88

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15.

16

17

18

19

20

21

22

23

24

25

26

27

28

Tribe's ordinances, as approved by the NIGC s chair, do not include provisions

required to meet any intra-tribal exception under the UIGEA.

37. The Compact does not expressly authorize Internet bets or wagers and the

method by which they are initiated and received or otherwise made. The Compact

does not include age and location verification requirements reasonably designed to

block access to minors and persons located outside the Tribe's Indian lands. The

Compact does not include appropriate data security standards to prevent

~ a u t h o r i z e d access by any person whose age and current location has not been

verified. The Compact thus does not include provisions required to meet any intra

tribal exception under the UIOEA.

The Meet and Confer Process

38. In July 2014, information appeared in the gaming press and gambling

: blogs that the Tribe intended to launch real money online poker in California

within a short time. On July 14,2014, the State sent a letter to the Tribe requesting

that the parties meet and

o n f e r

concerning

\iVhether

the Tribe's l n n ~ d Internet

gambling materially breached the Compact. That letter also referred to Internet

bingo.

39. By letter dated July 17, 2014, the Tribe rejected the State's request to

meet and confer. The Tribe responded that it intended to offer only online poker,

and not Internet bingo, conducted from servers located on tribal lands. The Tribe

-

- '

\

-;

-

- -

-

-

claimed that its prospective Internet gambling was not covered by the Compact.

The Tribe advised that it had no intention

of

discussing with the State any federal

statutes, including IGRA and the UIGEA.

FIRST CLAIM-FOR RELIEF

Breach

o

Compact)

40. The State realleges and incorporates by reference each and every

allegation set forth above in paragraphs 1 through 39.

11

Complaint

For

Injunctive And

Declaratory

Relief



12/88

1

2

3

4

5

6

7

8

9

19

11

12

13

41. Under the Compact, the Tribe agreed not to engage in class III gaming

that is not expressly authorized by the Compact and not to conduct gaming to the

extent

limited under IGRA. The Tribe further agreed not to offer, by using the

Internet, games authorized to the California State Lottery unless others in California

were permitted to do so under state and federal law. The Tribe also agreed to

control its class III gaming so as to enforce the Compact s terms and IGRA and to

prevent illegal activity

in

operating class III gaming activities.

u r t h e r m o r e ~

the

Tribe agreed that its class III gaming would comply with ordinances approved

in

accordance with IGRA and would not be available to persons under twenty-one

years old.

42. The Internet gambling alleged in this Complaint is class III gaming not

authorized by the Compa,ct, is not conducted in accordance with IGRA,and. is

illegal.under state and federal laws. Among otherthings,:the T r i b y ~ I n t e ~ e t .

_

14 gambling cQnstitutes unlawful Internet gampling and violates, without limitation,

.

.

15 California Penal Code sections 318, 32Q 321, 322, 337a, 326.5(m), and326.5(o).

16 Additionally, the Tribe s Internet gambling does not comply with ordinances

17 approved in accordance

withiGRA

and is available to persons under twenty-one

18 years old.

19 43. By the actions alleged in this Complaint, the Tribe materially breached,

20 and continues to breach, the Compact.

21 44. The facts alleged in this Complaint demonstrate that emergency relief is

22 . required to maintain the public health and safety and general good order. The facts

23

alleged in this Complaint further demonstrate that the State is entitled to injunctive

24 relief as a result of the Tribe s material. breach of the Compact. .

' - ---

25

4.5.

By this Complaintandpursuant to Compact section l1.2.l{c), the State

26 gives the Tribe written notice of an opportunity to cure its breach

of

the Compact.

7 If

the Tribe does not cure within sixty days, the State is entitled to a declaration that

28 the Tribe has materially breached the Compact.

12


Declaratory Relief



13/88

1

SECOND CL IM

FOR RELIEF

2

Unlawful Internet Gambling)

3 46. The State realleges and incorporates by reference each and every

4 .

allegation

set

forth above in paragraphs

1

through 45

5 47 The Internet gambling offered by

the

Tribe is unlawful Internet gambling

6 under the UIGEA.

7

48 The

Tribe is engaged in the business of betting and wagering under the

8 UIGEA.

9 49. In connection with the Internet gambling. th t it offers nd other persons

10 participation in that gambling, the Tribe knowingly has accepted, and is accepting,

11

credit, the proceeds

of

credit, electronic fund transfers, and other funds and monies

12

denominated in 31 U.S.C. 5363.

- . .

13 50. The State has authority to enforce the Compact, and the Tribe has waived

14

sovereign immunity with respect to such enforcement. The Compact provides

.

15

authority for the State to initiate enforcement proceedings. The UIGEA authorizes

16

such

proceedings in connection with the unlawful Internet gambling offered by the

17 Tribe.

18

51. The facts alleged in this Complaint demonstrate that emergency relief is

r

19 rt(.quired to maintain the public health and s fety and general good order and to

20 restrain the Tribe s violation of the UIGEA. The facts.alleged in this Complaint

21 further demonstrate that the State is entitled to injunctive reliefas a result of he

.

.

22 Tribe s violation of the UIGEA.

23 PR YER ND RELIEF

REQUESTED

24 WHEREFORE, the State prays that:

25

1

This Court enter a temporary restraining order, and preliminary and

26 permanent injunctions, prohibiting the defendants, including their officers, agents,

27 servants, employees and persons acting under any defendant s direction and .

28

13

Complaint

For Injunctive And

.

Declaratory

Relief



14/88

1

2

3

4

5

6

7

8

9

10

2

13

14

15

.

16

17

18

9

20

2

22

23

24

25

26

27

28

control from offering and operating Internet gambling in violation o the Compact

IGRA and the UIGEA.

2.

This Court declare that the Tribe has materially breached the Compact

that the Tribe has failed to cure the breach within sixty days

o

written notice and

that the State may exercise all rights powers and privileges accorded it with

respect thereto including without limitation the right to terminate. the Compact.

3. This Court enter such further orders and judgments as it deems

appropriate.

Dated: November 18 2014

Respectfully submitted

KAMALA D. HARRis

Attorney General o California

SARA

J.

DRAKE

Senior Assistant Attorney General

Is WILLIAM

P.

TORNGREN

WILLIAM P. TORNGREN

~ ~ ~ ~ Z Y ~ 2 ~ 1 a g ~ f f S ~ ~ t e o

alifornia

.

14


Declaratory Relief



15/88

'14CV2724 NLSAJB

Case 3:14-cv-02724-AJB-NLS Document 1-1 Filed 11/18/14 Page 1 of 2


16/88



17/88

EXHIBIT

1

TO COMPL INT

FOR

INJUNCTIVE

AND

DECL R TORY RELIEF

Tribal State Compact Between the

Santa Ysabel Band ofDiegueno Mission Indians

of the Santa Ysabel Reservation

and the State of California



18/88

;

-

\...

-

I

I

I

,_

-...........

... .

TRIBAL-STATE COMPACT

BETWEEN

THE

SANTA YSABEL BAND OF

DIEGUENO MISSION INDIANS OF

THE

SANTA YSABEL RESERVATION

.AND THE.

STATE OF CALIFORNIA

-.

-"---

-

\

/

..:: ' '

~

- - - - - ~ -

-

-

....... ..... -- ________ ._____



19/88

1

i

I

I

J

t

~

)

...

,

I

()

TRIBAL-STATE GAMING COMPACT

Between the SANTA YSABEL BAND OF DIEGUEN.O MISSION

INDIANS OF THE SANTA YSABEL RESERVATION;

a federally recognized lndjan Tribe,

and the

STATE OF CALIFORNIA

. This Tribal-8tate

G a ~ n g

Compact is entered into on a government

to-government basis by and between the Santa Ysabel Band ofDiegueno

Mission Indians of

the

Santa

Y s a b ~ l

Reservation, a e d e r a l ] y - r e c o g n i z e ~

sovereign Indian

tribe

(hereafter Santa Ysabel Tribe or Tribe, ), and

the

State of California, a sovereign

State

of he United States (hereafter State ),

pursuant to

the

Indian

Gaming

Regulatory Act of 1988 (}l.L. 100-497,

codified at 18 U.S.C.

Sec.

1166 et seq. and 25 U.S.C.

Sec. 2701 et

seq.)

I ,

(hereafter IGRA ),

and

any

successor

statute

or

amendments .

PREAMBLE

A. The State

enters

into this Compact at

this

time in recognition that the

Santa Ysabel Tribe (1) communicated its interest n a compact in

May

2000,

.not long after compacts were signed in 1999 with other California Indian

Tribes; (2) possesses Indian lands as defined by

IGRA;

(3) will operate no

more than 350 Gaming Devices

at this

time on its Indian land

as

defined in

IGRA described in Appendix A attached hereto; and (4)

is

committed to

working cooperatively with local governmental entitiesin California to

mitigate off-reservation

m p a c t s

.

B. The State enters into this Compact out of respect for the unique

history and circumstances

of

the Tribe. The Tribe represents that, prior to

European contact,

~

~ c e s t o r s of the Santa Ysabel Tribe lived in

an

area

from the Pacific coast to the inland mountains of Southern California

'

C. On December 1875, U1ysses S. Grant, President of the United

States, signed an executive order establishing the original boundaries of the

Santa Ysabel Indian Reservation. The Tribe eventually permanently

relocated to the rocky mountain tops within the Reservation

D. The Santa Ysabel IndianReservation now consists of three separate

parcels, currently called Tract 1, Tract

2,

and Tract 3, totaling

;:;tpproximately

1?,500 acres and

is

within the original boundaries ofthe Santa Ysabel

.



20/88

. _

i )

..

I

(

r ~

,

I

_/

,

,

Reservation.

The Tribe has approximately 800 enroJled mei)lberS

who

possess at

least 1/8

degree Indian blood .

B. The Tribe has

faced

and o n t i n u ~ s

to

face

a

number of

economic

hardships including butnoflimited to: the destruction of valuable timber and

natural resources loca-ted n l h e

Reservation

due to an. extensive fire

in

2002

and

an

unprecedented bark reetle infestation; the

lack

of running water or

electricity for many

members

of

the

Tribe; and a high unemployment rate.

F. The Santa Ysabel Tribe

is

governed by r t i c l e ~ ofAssociation

adopted

by the Tribe on June 2, 1974,.as amended. The Tribe does not have

a tribal court

G.

In

1988, Congress enacted

IGRA

as

the

federal statute governing

Indian gaming

in the

United

States.

The

purposes

ofiGRA are

to

provide a

.statutory basis for

the

operation ofgaming by Indian tribes as a means of

promoting tribal economic development, self sufficiency, and.strong tribal

governments.;

to provide a statutory

basis

for regulation oflndian ginning

adequate to shield it from organized crime and other corrupting n f l u e n c e s ~

to ensure

that the Indian tribe is

the

prima ry beneficiary of the gaming

operation; to ensure that gaming

is

conducted fairly and honestly by both

the

operator and players; and to declare that the establishment

of

an independent

federal regulatory authority for gaming on Indian lands, federal standards for

gaming on Indian lands, and a National

Indian

Gaming Commission are

necessary to m e e ~ congressional concerns.

H.

The

system

of regulation oflpdian gaming. fashioned by Congress in

IGRA

rests on an allocation of regulatory jurisdiction among the three

sovereigns involved: the federal

government,

the state in. which a tribe has

land,

and

the tribe itself. lORA makes

Class

III

gaming

activities lawful on

the lands. of federallyrecognized Indian tribes only if such activities

are:

(1)

authorized by a tribal

ordinance,

(2) located in a state. that permits such

gaming for

any

purpose by

any

person, organization or entity,

and

{3)

conducted

in

conformity with a gaming

compact

entered into between

thy

Indian tribe and

the

state and approved by

the

Secretary of the Interior

I.

The Santa

YsabelTribe doesnot currently operate a Gaming Facility

that offers

Class

III Gaming Activities. However, on or after the effective

date of this Compact, the Santa Ysabel

Tribe

will develop and operate a

2

~

..

--

...

- .. _ -



21/88

)

t

.

)

I

I

I

I

I

I

I

-

Gaming

Facility with up to 350

Gaming Devices

in

San

Diego County,

California, on

the

parcels

described in Appendix

A

J.

The

Santa

Y

ahel

Tribe

and

the

State share

an

interest in mitigating

off-reservation impacts of the Gaming Facility, as

well

as an interest in .

fostering a

good

neighbor relationship

among the.

Tribe,

the

State

and the

community that borders on

the

Tribe's reservation

land.

For these

reason.s,

the Santa Ysabel Tribe and

the

State believe it is in the best interests of the

Tribe and the State for the Tribe

to

enter into eJ.Iforcea,ble and binding

agreements with San Diego County and any other local governmental

entities that will either provide services to,. or be adversely impacted by, the

con'struction or' operation

of

the Gaming

Facility

to address off:-reservation

impacts of the Santa Ysabel Tribe's a m i ~ g Facility:

K.

The exclusive rights that

the

Santa

Ysabel

Tribe

will

enjoy under

this

Compact create a unique opportunity for 'the Santa Y ahel Tribe

to

operate

its Gaming Facility in an econoniic environment

free

of competition from

the

Class III gaming referred to in Section 4.0. of

this

Compact

on

non

Indian lands

in

California.

The

parties

are m i ~ d f u l

that

this

unique economic

environment is of great

value to the

Santa Y ahel

Tribe and the

fact that

income from Gaming

Devices will

represent a b s t a n t i a l portion

of the

Santa

Ysabel

Tribe's revenues. The parties

are

also mindful of he fact that

the

State will bear costs directly related to the regulation.and operation of

Gaming Devices. In consideration for the exclusive rights enjoyed l:?Y the .

.Santa Ysabel Tribe, and

in

further .consideration for the State's ~ . i l l i n g n e s s

to

enter into this Compact,

and to

bear such costs,

and

in light of the

meaningful concessions offered.by the State

i11.

good faith negptiations, the

Santa Ysabel Tribe

has agreed

to provide

to

tb,e

State, on

a sovereign-to

sovereign basis, a portion of its revenue from

Gaming

Devices. .

L. The State

has

a legitimate interest in promoting the purposesofIGRA

for all

federally recognized

Indian tribes

in

California;

whether gaming or

non-gaming. The State also has a legitimate sovereign interest in regulating

the growth of Class III

Gaming

Activities in California. The Santa Ysabel

Tribe

and the

State

share

a joint sovereign interest in ensuring that tribal

gaming activities are

free from

criminal

and

other undesirable elements .

M. The State enters into this Compact in reliance on the representations

of the Santa Ysabel Tribe that the land identified in the box described as

Proposed Development. Zone

in

Appendix A is

the

land

on which it

will

3

~ ~ - .

--------

~ ~

, ~



22/88

I

.......)

.

I

I

I

I

I

..

}

__;

locate the

Gaming

Facility, and that such land

is

Indian lands acquired prior

to October 17, 1988 imd qualifies for gaming under IGRA.

N.

The

State

also

enters

into

this

Compact

out

of a respect

for the

sentiment o f t h ~ _ v o t e r s of California

who,

in approving P r o p o s i t i o ~ s 5

and

lA, expressed their b e l i e f t h ~ t the forms

of

gaming authorized herein should

be allowed. /

0.

The

parties

to

this Compact recognize each other s respective lawful

govemmental interests, and further recognize that any

and

all obligations,

waivers

of

urisdictionalinununities_o_r.agreements to abide

by

governmental

laws and regulations arising

from

this Compact are solely by means

of

this

contractual

agreement, which

is

an exercise of

the

governmental authority of

the parties. Except as provided in this Compact, nothing herein contained

shall

be

construed

as

actual or

implied derogation or

shall

be applied

so as

to

hinder,

any and all powers of internal sel.f-govemment of

the

Santa Ysabel

Tribe or

the State of California,

or

their respective governmental standing

Section l.O. PURPOSES AND OBJECTIVES.

The tenns of his Compact

are

designed and intended to:

(a) Evidence the goodwill and cooperation of the

Santa

Ysabel-Tribe

and

the

State

in fostering a mutmilly respectful government-to-government

relationship that will

serve

the mutUal interests of the parties .

(b) D e v ~ l o p and implement a mearis of regulating Class l l gaming,

and only Class Ill gaming, on the Santa

Ysabel

T r i b ~ s Indian lands to

ensure

its.

fair and honest operation in accordance with IGRA, and through

that regulated

Class

III

gaming, enable the Santa Ysabel Tribe to develop

self-sufficiency,_

promote tribal economic development,

and

generate jobs

and revenues

to

support the Santa Y,sabel Tribe s government

and

governmental

services

and

programs. .

(c) Promote ethical practices in

conjunction

with that gaming, through

the licensing and

control ofpersons and

entities

employed in,

or

providing

goods and services

to,

the

Santa Ysabel Tribe s Gaming Operation and

protecting against the presence or participation of persons whose criminal

backgrounds, reputations, character, or associations make

them

unsuitable

for

participation

iri

gaming,

thereby maintaining a high level of integrity in

tribal

government

gaming.

4

___



23/88

l

t

-

)

'

'

'

'

'

'

I

-

)

' _ /

I

'

'

. \

I

.1

Section 2.0.

DEFINITIONS.

Sec. 2.1. Applicant

means

an

individual or

entjty that applies for a

Santa Ysabel Tribal hcense

or

State certification.

Seer.

2.2.

Association means an

association,

of California tribal and

_state

gaming

regulators, the membership ofwhich comprises up to two

representatives

from

each tribal

g aming

agency of those tribes with

\YhO,m.

the State has a gaming compact under

lORA, and up

.to

two

delegates each

from the Division of

Gambling

Control in the California Department o

Justice

and

the California Gambling Control Commission.

Sec. 2.3. Class Ill gaming

means

the forms of Class III

gamhi.g

defined as such in 25

U.S.C.

Sec. 2703(8) and by regulations o the National

Indian Gaming Commission .

Sec. 2.3

.1

.. Coordinator means t h ~ .Office o the American Indian

Coordinator in the Office of the Governor.

I I

Sec.

2.4. Gaming

c t i v i t i e s ~

means

the

Class

III gaming activities

authorized under

this Gaming

Compact.

Sec. 2.5.

Gaming Compact or Compact means this compact.

Sec. 2.6. Gaming Device means a slot machine,

inCluding an

electronic., electromechanical, e l e c t r i c a l ~ or video device that, for

consideratio n,. pemrits: individual play with or against that device or the

participation in any electronic, electromechanical, electrical, or video system

to wl)ich that device is connected; the playing of r n ~ s thereon or therewith,

including, but not limited to, the playing of

~ c s i m i l e s

o games

o

chance or

skill;

the

possible deliveryof, or entitlement by the player to, a prize or

something.ofvalue as a result of the application of

an

element of. chance;

and-a

method for viewing the outcome, prize

won,

and other infonnation

regarding the playing of games thereon or

ther.ewith.

'

Sec. 2.7.

Gaming Employee means.any natural person

who (a)

operates, maintains, repairs, assists

in

any Class Ill gaming activity, or is in

any way responsible for supervising such Gaming Activities or

e r ~ o n s

who

conduct

1

operate, account

for,

or supervise any such gaming activity, (b) is

in a category under

federal or

tribal gaming law requiring licensing,

(c) is

an

employee of the Tribal Gaming Agency with access

to

confidential

information,

or

(d)

is

a person whose employment-duties require or authorize .

access to

areas

of the Gaming Facility that ate not open to the public

Sec. 2.8. Gaming Facility or ''Facility means any building in

California

in

which Class liT gaming activities or gaming operations occur,

or

in

which

the business records, receipts,

or

other funds o the gaming

operation

are

maintained (but excluding offsite facilities primarily dedicated

to storage of those records, and financial institutions), and all rooms,

5

_________________ ---- .... -----------



24/88

'

,

.,

-

)

.

t

.

t

t

t

,

- I

'-

buildings,

and areas: including

parking lots

and walkways,

a principal

purpose of

which

is to serve the activities of the

Gaming

,Operation,

provided that nothing herein prevents the conduct of Class

II

gaming (as

defined

under

IGRA) therein.

Sec. 2.9. Gaming Operation m ~ n s the business enterprise that

offers and

Operates Class

III Gaming

Activities, whether

exclusively or'

otherwise .

S e c ~ 2.1 0. Gaming Ordinance means a tribal ordinance or resolution

duly

authorizing the conduct of Class

III Gaming

Activities

on the

Santa

Ysabel

Tribe's

Indian, Lands and approved

under

IGRA.

Sec. 2.11.

Gaming

Resources means any goods or

services provided

or used in connection with Class III Gaming Activities, w:hether exclusively

or

otherwise, including, but not limited

to,'

equipment, furniture, gambling

devices

and

ancillary equipment, implements of gaming activities such as

playing

cards and

dice, furniture designed primarily for Class III ganring

activities, maintenance

or

security equipment

and

services, and

Class l l

gaming

consulting services. Gaming R e s o u r ~ e s does not include .

professional accounting

and

legal services .

Sec. 2.1.2.

Gaming Resource Supplier

11

means

any

person

or

entity

who, directly or indirectly, manufactures, d i s t r i b u t e s ~ supplies, vends, leases,

or otherwise purveys Gaming Resources to the' Garmng Operation or

Gaming

Facility, provided that

the

Tribal Gaming Agency may exclude a

purveyor of equipment

or

furniture that is.

not

specifically designed for,

and

is distributed generally for

use

othet: thari in connection with, Gaming

Activities, if

the

purveyor is

not

otherwise a Gaming Resource Supplier as .

described by of Section 6.4,.5, the compensation received by the purveyor is

not groSsly disproportionate to the value of the

goods

or services provided,

and the purveyor is not otherwise a

person

who exercises a significant

influence

over the

Gambling Operation. . .

Sec.

2.13

.. IGRA means the Indian Gaming Regulatory Act of 1988

(P.L. 100-497,

18

U.S.C. Sec. 1166 et seq. and

5

U.&.C.:Sec.

2701

et

seq.}

any

amendments

thereto, arid all regulations promulgated thereunder

Sec. 2.13

.1.

Santa Ysabel Tribe or Tribe means the Indian tribe

listed in the Federal Register

as

the Santa Ysabel Band ofDiegueno Mission

indians ofthe Santa Ysabel Reservation or an authorized official

or

agency

thereof.

Sec. 2.14.

Management Contractor

means any Gaming

Resource

Supplier

with

whom the Santa Ysabel Tribe has c o n t r a c t ~ d

for the

management of any

Ga:miDg

Activity

or

Gaming Facility, including, but not

6

__

---- ........ .

.



25/88

. .

.

)

.

.

..

........

)

.

~ -

limited

to,

any person who would be regarded

as

a management contractor

under IGRA .

Sec. 2.15. Net Win means net win

as defined by

American

Institute

of

Certified Public Accountants.

1 .

Sec. 2.16.

NIGC means the

National Indian Gaming Commission .

Sec. 2 . 1 7 . S t a t ~ means

the

State of California

or

an authorized

official oragency thereof designated by this Compact or by

the

Governor.

Sec. 2.18. State Ga11iing Agency means the entities authorized to

investigate, approve, and regulate

gaming

licenses and regulate

gaming

pursuant to the

Gambling

Control Act (Chapter 5 (commencing

with

Section

19800)

of

Division 8 of the

Business and Professions Code)

.

Sec. 2.19. '

0

Tribal Chairperson means the

person

duly elected under

the Santa Ysabel Tribe's Articles of Association to serve

as

the primary

spokesperson

for

the

Santa

Ysabel Tribe. '

Sec. 2.20.

Tribal

Gaming

Agency

means

the

person, agency,

b ~ a r d

committee, cormnission, or council designated under tribal law, including,

but not limited to, an intertribal gaming regulatory agency approved to fulfill

those

functions

by the National

Indian Gaming

Connnission,

as

primarily .

responsible for carrying out the Santa Ysahel Tribe's regulatory .

r(fsponsibilities under IGRA and the Tribal Gariring Ordinance. No person

employed in, or in connection with, the management,' supervision, or

conduct ofany gaming activity may

be

a member or employee

of

the Tribal

Gaming Agency.

Section 3.0.

CLASS

III

GAMING

AUTHORizED ANn

PERMITTED. The

Santa ,ysabel Tribe is hereby authorized and pennitted to

engage in only the Class III Gaming Activities expressly referred to in .

Section 4.0 and shall not engage in Class III gaming that is not expressly

authorized in that Section.

The

gaming activities herein refer.red to are

authorized

to

be

conducted at

the Gaming Facility situated on the Tribe's

Indian lands within

the

meaning ofiGRA, identified in Appendix A, whicb

is hereby represented by

the

Tribe to be located within

the

boundariesof ts

original Reservation established pursuant to an Executive Order issued by

President Ulysses

S. Grant

for the Tribe's benefit on December 27, 1875. It

is specifically understood that

this

Compact is entered

into

by the State in

reliance

upon

the Tribe's representation and

is

null

and

void

if

the

representation is not accmate.

1

See

Addendum

regarding the Meaning

of

Terms.

7

...

~ -----.---



26/88

,

.,_

J

')

.

'

'

'

/

-J

'

Section

4.0.

SCOPE OF

CLASS III GAMING.

. Sec. 4;1. Authorized

and

Permitted Class

III

Gaming. The Santa

Ysabel Tribe is hereby authorized and permitted to operate

the

following

Gaming Activities under

the terms and

conditions set

forth in

this Gaming

Compact: .

(a) Gaming

Devices.

1

(b) Any banking or.

~ r c e n t a g e card

game .

(c) Any devices

or

games

that are

authorized

under state

law

tothe

California

State

Lottery, provided that the

Santa

Ysabel

Tribe will

not offer

such games through use of the Internetunless o ~ e r s in the state

are

permitted to do

so

under state

and

federal law .

(d) Nothing

herein

shall be construed to preclude negotiation ~ f a

separate, compact governing

the

conduct of off-track wagering at the a n ~ a

Ysabel

Tribe's

Gaming

Facility.

.

(e)

In

recognition that

the

scope of

gaming

pennitted

to

Indian tribes

in California under Tribal-State gaming ~ o m p a c t s now in existence is

governed by unifonn language

in

each compact,

the

Santa Ysabel. Tribe and

the State acknowledge that the scope of

Class III gaming permitted

by

this

Gaming Compact 1s identical to the

s c o p ~

of Class III gaming permitted to

aily tribe under any

compact

now in existence, and will remain SQ during the

duration of his Gaming Compact.

Sec. 4.2. Authorized Gaming Facility. The Santa Ysabel

Tribe

may

establish

and

operate one Gaming Facility on the site identified in Appendix

A of

this

Compact,

which

is located on Indian landson which gaming may

lawfully beconducted under

the

Indian Gaming

ReiDJlatory

Act. The

Santa

Ysabel Tribe may

combine and

operate

in

this Gaming Facility any forms

.and kinds

of

gamill;g permitted under

law,

except to the extent limited under

IGRA, this

Compact, or' the Santa Ysabel

Tribe's.

Gaming Ordinance. If he

Santa Ysabel

Tribe

requests in writing that the State negotiate with the Santa

Ysahel Tribe for a second

Gaming

Facility

on

i ~ s Indian lands as defmed by

IGRA, the parties agree to negotiate such request in

good

faith.

Sec.

4.3.

Authorized Number of Gaming

Devices

Sec.

4.3.1 (a) The Santa Ysabel Tribe may operate no more than 350

Gaming Devices. From and after the first day of

operatiop.

of its first

Gaming

Facility,

the

Santa

Ysabel

Tribe shall pay five percent (5 ) of ts

Net

Win

from

the

operation of Gaming Devices

to

the California Gambling

Control

Connnission, or such other State entity as may be designated by

the

Governor, for deposit

into the

General

Fund. Payments

shall

be

made

on a

quarterly

basis

and

shall be

determined aitd made not later than the thirtieth

(30th) day following the end of each calendar quarter.

The

first payment shal1

8

~

..

'- .- ....

.

................

~ ~ .... . ---- -- ---



27/88

t .

t

t

t

.

.

t

t

t

l )

...

t

)

I

L

be made. at the conclusion of the

first

full calendar quarter following the first

.

day of

operation of

any

Gaming Device. . .

(b)

Any quarterly payment not paid on or before the date

on

which ,

such amount

is

due

shall

be

deemed overdue.

I f

any

quarterly payment

under subdivision (a) is overdue, the Tribe shall

pay,

in addition to the

overdue quarterly paym ent, interest on such amount from the date sucp .

quarterly

payment

was due until the date such quarterly payment (together .

with interest

thereon)

was actually paid at the rate of 1.0% per month or the

maximum rate permitted

by

state law,

whichever is

less. Entitlement

to such

'interest shall be in addition

to

any other remedies the State may have.

.

(c)

At the

time

each quarterly payment is made, the Tribe shall submit

.

to tl;le

California Gambling Control Commission, or such other State entity

as

may

be

designated

by

the Governor, a

re,port (the

Quarterly Net Win

Payment Report ) certified

by an

authorized e p r e s e n ~ a t i v e of Tribe

reflecting

the

Net Win, and the total amount of the quarterly payment.

(d) f the California

Gambling Con'trol Commission, or such

other

State entity

as

may be designated by the

Governor, causes

an audit to

be

made by or on behalf of

the

State

of

he Quarterly Net Win Payment Report

submitted pursuant to subsection (c), and the quarterly Net Win payment for

any quarter

as

reflected on such quarter's

Q ~ a r t e r l y

Net Win Payment

Report is found to be understated, the State will promptly notify the Tribe,

and the Tribe will either accept the difference or provide.a reconciliation

satisfactory

to

the State. If the Tribe accepts the difference or d o ~ s not

provide a reconciliation satisfactory to the State wjthin.sixty (60)

days

of

receipt

of

the

notice, the Tribe.rnust immediately pay the arnount ofthe

. resulting deficiencies

in

the quarterly payment plps interest on such amounts

from

the date they were due at

the

rate of

1.0%.

per month or the maximum

rate permitted by state law, whichever is less. .

(e)

The

Santa

Ysabel

Tribe

shall

not conduct any

Gaming

Activity

authorized by

this

Compact if

he

Santa Ysabel Tribe is more.thaii o (2)

quarterly contributions il l arrears in its payments to the General Fund

Sec. 4.3.2. Revenue Sharing with

N o n ~ G a m i n g T r i b e s .

(a) For the purposes

of

this Section 4.3.2

and

Sections 4.3.1 and 5.0,

the

following definitions apply:

(i)

A Compact Tribe is a tribe having a compact with the. State that

authorizes

the Gaming

Activities authorized

by this

C o m p ~ c t .

Federally

recognized tribes that

are

operating fewer than 350

Gaming

Devices

are

Non-Compact Tribes. Non-Compact Tribes

shall

be deemed third party

beneficiaries of

this

and other compacts identical in all material respects. A

Compact Tribe that becomes a Non-Compact Tribe may not thereafter return

9

- - ~ - - - - - - - - - -

~

------------------------------------------



28/88

---------

r 1

)

~

i . =:

to

the status of a Compact Tribe for a period of two (2) years after becoming

a N

n ~ o m p a c t

Tribe.

(ii)

The

Revenue Sharing Trust Fund is a fund created by the

Legislature

and

administered by the California Gambling Control

Commission, as Trustee,

for

the receipt, deposit,

and

distribution

of

monies

paid pursuant to

this

Section 4.3.2.

(iii) The Speciai Distribution Fund is a fund created by the Legislature

for the receipt, deposit, and distribution of o ~ i e s p a i ~ pursuant

to

Section

5.0. .

. Sec. 4.3.2.1. Revenue Sharing Trust Fund .

(a) The Santa Ysabel Tribe agrees with all other Compact Tribes that

are

parties

to

compacts having this

Sectiol.14.3.2,

that each N o n ~ C o m p a c t

Tribe in

the

State shall receive the

sum

of $1.1 million per year. In the event

there are insufficient

monies

in the Revenue Shanng rust Fun'd to pay $1.1

million per year

to

each

o n ~ C o m p a c t

Tribe,

any

available monies

in

that

Fund shall be.distributed

to

Non-Compact Tribes in equal shares. Monies in

excess of the amount necessary

to

pay $1.1 million to

each

Non-Compact

Tribe in

any

given year shall remain in the R ~ v e n u e .Sharing Trust Fund

available for disbursement in future years.

'(b)

Payments

made to Non-Compact Tribes

~ ~ h a l l be

made quarterly

and in equal shares out of the Revenue Sharing Trust Fund. The Commission

shall serve

as

the trustee

of

the fund. The Coinmtssion shall have no

discretion with respect

to

the

use or

disbursement

of

the trust :fluids. Its sole

authority shall be to serve as a depository of the trust

Unds

and d i s ~ u r s e

them

on

a quarterly basis

to

N o n ~ o i n p a c t

Tribes.

In no

event shall the

State s General Fund

be

obligated to make up any shortfall or pay any

unpaid claims .

Section 5.0. REVENUE DISTRIBUTION

Sec.

5.1. The

parties acknowledge that certain

o m p ~ c t

Tribes make

co.ntributions

to

the Special Distribution Fund created

by

the Legislature .

Sec. 5.2.

Use

of

funds. The Special Distribution Fund is available for

appropriation by the Legislature for the following purposes:

(a)

grants,

including

any

administrative costs,

for

programs designed to address

gambling addiction; (b) grants, including any administrative costs, for the

support of state

and

local government agencies impacted by tribal

govertunent gaming; (c) compensation for regulatory costs incurred by the

State Gaming Agency and the State Department of Justice in connection

with the implementation and administration. of the Compact; (d) payment of.

shortfalls that may occur in the Revenue Sharing Trust Fund; and (e) any

1

~ . . : _

- - - - ww--

--

.

------



29/88

.-----

t

t

t

1.

--

. I

1

:

I

.

__

other

purpqses

specified by the Legislature. It is the intent of the parties that

Compact Tribes will be consulted

in

the

process of identifying p u r p o ~ e s

for

grants

made

to local

governments.

Section 6.0. LICENSING.

Sec. 6.1. Gaming

Ordinance

and

Regulations .

a) All

Gaming Acti ities conducted under

this

Ganring Compact

shall, at a minimum, comJ?1Y with a Gaming Ordinance duly adopted by the

Santa Ysabel Tribe

and

approved in accordance with

IGRA,

and with

all

rules, regulations, procedures, specifications, and standards duly adopted by

the

Tribal

Gaming

Agency.

(b)

The

Santa Ysabel Tribe

shall

transmit a copy of its Gaming

Ordinance to the California Gambling Control Commission or such other

State entity

as

may be designated by the Governor, within twenty 20) days

following execution of

his

Compact.

c) The Tribal Gatniitg AgenGy shall transmit a copy

of

its rules,

regulations, procedures, specifications,

and

standards, and any amendments

thereto or to its Gaming Ordinance, to

the

California Gambling

Control

Connnission or. such other State entity

may be

designated by

the

Governor, within twenty 20) days following adoption or amendment.

d) The. documents

identified

in

subdivisions (b)

and

(c) b o v ~

applicable to

the

public shall be

made

available to

any

member ofthe public

upon request for i n s p e c t ~ o n and copying at

the

Tribe s offices or

in

such

other manner as the Tribe may designate .

Sec. 6.2.

Tribal Ownership, Management,

and

Control

of

Gaming

Operation. The Gaming Operations authorized under this Gaming Compact

shall be owned solely by

the

Santa Ysabel Tribe .

Sec.

6.3. Prohibition Regarding

Minors.

The Santa Ysabel Tribe shall

not permit persons under the age of 21 years

to

be present in ,any room or

area in which Class ~ I I

Gaming

Activities

are

being conducted unless the

person is

en

route to a nongaming area

of

the Gaming facility

Sec.

6.4. Licensing Requirements and Procedures .

Sec. 6.4.1. Summary

of

Licensing Principles.

All

persons in

any

way

connected with the

Gaming

Operation or Facility

who

are required to be

licensed

or

to submit to a background investigation under IGRA, and any

others required

to

be licensed under

this

Gaming Compact, including, but

not limited to, all

Gaming

Employees and Gaming Resource Suppliers,

and

any

other person having a significant influence over

the

Gaming Operation

must be licensed by the Tribal

Gaming Agency.

The p r t i e ~ intend that the

licensing process provided for in

this

Q ~ t n r i n g Compact shall involve joint

11

-----

---

--



30/88

.

)

.

t

)

I

I

I

\

__ .

cooperation between

the Tribal

Gaming

Agency

and

.the State

Gaming

Agency,

as

more particularly described herein.

Sec.

6.4.2,

Gaming

Facility. .

(a) The Gaming Facility authorized by this Gaming Compact shall be

licensed

by

the Tribal Gaming

Agency in

conformity with the requirements

o

this Gaming Compact,

thd

Tribal Gaming Ordinance,

and

IGRA. The

}jcense shall be reviewed and renewed, i appropriate, every two 2) years

thereafter. The Santa Ysaoel Tribe shall provide a copy of the initial license .

.and each renewal license

to

the California

Gambling

Control

Commissio:rt

or

such other State entity

as may be

designated

by

the Governor, within

tWenty

20) days

after issuance of

the

license and

each

renewal. The active license

or renewal thereof shall

be

posted

in

a conspicuous

and

public

place. in

the

Gaming

Facility

at all times

.

b) In

order

to

protect

the

pealth.and safety of all Gaming Facility

patrons, guests, and employees, the Ganring Facility o the Santa Ysabel

Tribe

constructed after

the

effective date

o this

Gaming Compact,

and all

expansiens or modifications

to

a Gaming Facility in operation

as o

the

effective date

o

tNs

Compact,

shall meet

the

building

and

safety codes

o

the Santa Ysabel Tribe,

which, as

a condition for engaging in that

construction, expansion, modification, or renovation, shall amend its

e;xisting

building

and

safety

codes i

necessary, or enact

such

codes ifthere

are none,. so that they meet the standards of either the building an d safety .

codes

o

any county within

the

boundaries of which the site

o

the Facility is

located, or the Uniform Building Codes, including

a11

uniforin

fire,

plumbing, electrical, mechanical, and related codes then in effect provided

that nothing herein shall

be

deemed

to

confer jurisdiction

upon.

any county

or the State with respect to .any reference

to

such building and safety codes.

Any

s ~ c h

construction,

expansion

or modification will also comply with the

federal Americans with Disabilities

Act, P.L. 1 0 1 ~ 3 3 6 as

amended

1

42

U.S.C.

12101 et

s e q ~

.

c)

Any Gaming Facility in which gaming authorized by this Gaming

Compact

is

conducted

shall be

issued a certificate

o

occupancy by the

Tribal Gaming Agency prior

to

occupancy

i

it

was

not used for

any

Gaming

Activities under lORA prior

to

the effective date of this Gaming Compact,

or, i

it

was so

used, within

one

year thereafter.

The

issuance

o

this

certificate shall be reviewed by the Tribal Gaming Agency for continuing

compliance every two years thereafter Inspections by qualified building and

safety experts shall be conducted under the direction of the Tribal Gaming

Agency

as the

basis for issuing any certificate hereunder.

The

Tribal Gaming

Agency shall determine

and

certify that,

as

to

new construction or new use

12

________

____________________________



31/88

t

t

r, )

.

. _

)

--

.

for gaming,

the FacjJity

meets the Santa Ysabel

Tribe s

building and safety

code, or,

as

to facilities or

portions of

facilities-that w e r ~

used for

the

Santa

Ysabel

Tribe s

Gaming

Activities prior

to this

Gaming

Compact,

that

the

facility

or

portions

thereof

do

not endanger

the

healthor

safety

o

occupants

or

the integritY

of

the Gaming Operation. The SaJ?ta Ysabel

Tribe

will

not

offer Class

III gaming

in a Facility

that

is constructed

or

maintained

in a,

manner that

endangers the health or safety

of

occupants or

the integrity o .

the

gaming operation .

(d)

The State shall

designate

an agent or agents to be

given reasonable

notice ofeach

inspection by the

Tribal

Gaming Agency s

experts,

whicp

state agents may

accompany

any

such inspection.

The

Santa Ysabel Tribe

agrees to correct

any

Gaming Facility condition

noted

in

an

inspection that

does not meet the

standards

set

forth

in subdiVisions (b) and (c). The Tribal

Gaming Agency and the

State s designated

agen.t

or agents s h l ~ exchange

any

reports of

an

inspection

within ten

19)

days after

completion of

the

report,

which

reports shall also be separately and simultaneously forwarded

by both agencies

to the

Tribal

Chairperson.

Upon

certification

by the

Tribal

Gaming

Agency s experts

that a Gaming

Facility meets

applicable standards,

the Tribal

Gaming

Agency shall forward

the

experts certification to the

State

Within ten (10) days

of issuance. Ifthe

State s agent

objects

to

that

certification,

the Santa

Y ahel

Tribe shall make

a

g0od faith

effort to

address

the State s

concerns,

but

i

he State does not :withdraw its objection, the

matter

will be resolved

in

accordance

with

the dispute

resolution.provisions

o Section 9.0.

Sec.6.4.3. Suitability Standard

Regarding

Gaming

Licenses. In .

reviewing an

application for

a

gaming

license,

and

in addition

to any

standards

set.forth

in

the

Tripai

Gaming

Ordinance, the Tribal Gaming_,

Agency

shall

consider whether issuance of

the

license

is

inimical to public

health, safety,. or welfare, and

whether

issuance,

of

the

license will

undermine public trust that the

Santa

Ysabel Tribe s

Gaming Oper }tions,

or

tribal

government gaming

generally, are

free

from criminal and dishonest

elements and would be

conducted honestly. A license

may

not

be

issued

unless, based on all information

and

documents submitted, the Tribal .

Gaming

Agency

is

satisfied that the applicant is all of

the

following, in

addition

to

any

other criteria in

lORA

or

the Tribal

Gaming

Ordinance:

.

(a)

A

person

of

good

character,

honesty,

and

integrity .

(b)

A person

whose

prior activities,

criminal

record (if

any),

reputation,

habits,

and associations do not

pose

a threat

to

the public interest

.

or

to.

the

effective regulation and control of

gambling,

or create or enhance

the dangers

of unsuitable, unfair,

or

illegal

practices, methods,

or activities

13

~ . . . . . . . . _ . . ___ ______



32/88

/ I

'

( )

.

I

--

a

in the conduct of gambling, or

in

the carrying on of the business and

financial arrangements incidental

thereto

(c)

A

person who

is in all

other

respects qualified to be licenseq as

provided

in this

Gaming

Compact,

IGRA,

the Tribal Gaming

Ordinance,

and

any other criteria adopted

by

the

Tribal Gaming Agency

or

the

Santa

Ysabel

Tribe. An

applicant-

shall not

be

found

to

be unsuitable solely on the ground

that the applicant

was

art employee of a

tribal gaming

operation

in

California

that

was

conducted

prior

to

the effective.date of this Compact.

Sec. 6.4.4.

Gaming

Employees. (a) Every G ~ m i n g Employee shall

obtain,

and

thereafter maintain current, a valid tribal gaming license, which

shall

be

subject to biennial renewal; provided that in accordance

with

Section

6.4.9,

tbose.persons

may be

employed

on a

emporary

or

conditional

basis pending completion of

the

licensing process .

(b) Except as provided

in

subdivisions

(c)

and

(d), the Santa Ysabel

Tribe will not employ or continue

to

employ, any person whose application

to

the State Gaming Agency

for

a determination of suitability,

or

for a

renewal o

such

a determination,

has

been

d e ~ e d

or has expired i t ~ o u t

renewal.

(c) Notwithstanding subdivision (a),

the

Santa Ysabel Tribe may

retain

in

its

employ

a

~ s o n whose applicatiop. for a.-determination

o

suitabiHty, or

for

a renewal o

such

a e t e n n i n t i o n ~ has been deJ:}ied

by the

State

Gaming

Agency,

if:

(i)

the person holds

a v alid

and

current license

issued by

the

rnbal

Gaming Agency

that must

be

renewed at least

biennially; (ii) the denial of the application by the state Gaming Agency is

based solely

on

activities, conduct,

or

assoCiations

that

n t e d ~ e

the

filmg of

the

person s initial application to the State Gaming Agency for a

determination o suitability; (iii)the person

is

not an. employee or agent o

any other gaming operation; and

(iv)

the person has been in the continuous

employ of

the

Santa

Ysabel

Tribe

for at least three years prior to the

effective date o this Compact.

(d)(l) Notwithstanding subdivision (a),

the

Santa

Ysabel

Tribe may

employ or retain in its employ a person whose application for a

detennination of suitability, or for a renewal o such a determination, has

been denied

by

the State Gaming

Agency, i the

person

is

an enrolled

member of the Santa Ysabel Tribe, as defined in this s:ubdivision, and

i

(A)

the

person

holds

a valid

and

current license

issued

by the Tribal Gaming

Agency

that

must be

renewed

at

least biennially;

(B)

the denial

o

the

application

by

the State

Gaming Agency is

based solely Qn activities,

conduct, or associations that antedate the filing o he person sinitia

Documents

California vs Iipay Nation of Santa Ysabel