Is Santa Ysabel’s Promise to Launch a Real-Money Online Poker Site Just an Elaborate Ruse?

Written By Robert DellaFave on July 17, 2014
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On Sunday, Marco Valerio broke the news that the 300-member Iipay Nation of Santa Ysabel tribe is planning to launch a real-money online poker site as early as next week.

The original announcement was made via press release, in which the tribe’s Commission Chairman David Vialpando justified the move by stating that the Santa Ysabel were “exerting its sovereign right under the Indian Gaming Regulatory Act to regulate and conduct Class II gaming from the tribe’s reservation.” While most table games are considered Class III, poker – which is a non-house banked game – falls under Class II.

As of now, Santa Ysabel’s, which utilizes the same software as U.S-facing offshore network WPN, is offering players access to a play money version of the software.

In short, is up, it’s running and it at least looks real.

Yet, given the Santa Ysabel’s shaky history in the casino industry, the current condition of the software and the inevitable legal implications it would face by going rogue, I’m just as inclined to believe that Santa Ysabel’s foray into the online gaming biz is more an elaborate ruse to satisfy its own interests, or at best a move to facilitate the passage of one of the state’s existing iGaming bills, than it is a(n) (il)legitimate attempt to generate long-term revenue as an independent online poker company.

Who is Santa Ysabel?

A post by PokerXanadu on the Two Plus Two forums, sums up Santa Ysabel previous dealings in the casino industry quite sufficiently:

“So, to sum up, a 300-member California Indian tribe, that went bust on their b&m casino earlier this year and defaulted on tens of millions of dollars in related loans from the Apache Indian tribe of AZ, is going operational this week for real-money intrastate online poker despite having no clear legal precedent or permission from the CA State or US Federal governments, using the same software platform as one of the current US-facing offshore poker networks that is operating illegally in the eyes of the US DOJ, working in conjunction with the Kahnawakee Gaming Commission who was at a minimum complicit in the AP/UB superuser scandals, and using a payment processor whose web site could have been written by almost any high school student and currently contains no method for customers to sign up for their ewallet and whose owner has been lately embroiled in a couple of multi-million dollar court judgments against one of his financial processing companies for the Indian gaming industry, which judgments he tried to dodge by filing for bankruptcy but was denied by the court.

What could go wrong?”

A few points of clarification:

The casino that PokerXanadu is referring to was The Santa Ysabel Casino, which opened in 2007 and closed this past February.

The tribe cited local government’s unwillingness “to renegotiate its financial agreement with the Tribe in the face of economic hardship” as one of the primary reasons behind the closure – a claim which County Supervisor Dianne Jacobs called “absurd.”

Santa Ysabel Casino’s closing left the tribe tens-of-millions of dollars in debt, with little means to pay it off. An attempt to declare chapter 11 bankruptcy prior to the closure was denied by the court.

Point number two: Despite its assertions, the legality of the Santa Ysabel launching a casino with servers based on its grounds is questionable at best. The Indian Gaming Regulatory Act does not address Internet gambling, suggesting that it would have to be amended before the Santa Ysabel could roll out their operation.

Along the same lines, while sovereign nations are more than permitted to accept real-money wagers within their lands, some legal experts “believe that limitations in tribal-state regulatory compacts and provisions in the Indian Gaming Regulatory Act (IGRA) limit the ability of tribes to accept wagers from off Indian lands.” This according to an email from LA-based gaming lawyer sent to industry expert Chris Grove.

The obvious point of contention here is that the Santa Ysabel are readying to offer all California natives access to its real-money poker site, not just those geo-located within the reservation’s boundaries.

In short, even though there is no specific language necessarily prohibiting the Santa Ysabel from conducting iGaming operations, there’s no clause allowing it either.

Moving on, the payment processor mentioned is the Financial Payment Network, a company no one has ever heard of and which features a website that is currently under construction. Enough said.

And finally, the Kahnawakee Gaming Commission, which acted/acts as the regulatory committee for just about every online poker site that operated in the United States despite being in violation of the UIGEA, was in fact likely involved in the super user scandal that saw Absolute Poker and Ultimate Bet steal millions from its customers.

Given this, it’s hard to place any weight into Santa Ysabel’s claims that it’ll be launching a real-money poker site that abides by a similar set of regulations to those set forth by Delaware’s regulatory committee by next weekend.

And I have to think that on some level, the Santa Ysabel realizes this too. Either that or its level of ignorance is unfathomable.

So what’s really going on?

A few possibilities:

  • is a shady attempt by a desperate tribe to generate some sort of short-term revenue.

Given the aforementioned legal murkiness of Santa Ysabel’s supposed real-money online poker site, it’s probably only a matter of time before the tribe would find themselves embroiled in a legal battle. But until then, the tribe will be happy to generate whatever income it can.

Should this be true, the Santa Ysabel will endanger the future prosperity of the US regulated market, and give iGaming opponents just another reason to oppose its expansion – all in the name of its own preservation.

Way to go Santa Ysabel.

  • The whole thing is a ruse.

California’s smaller tribes, especially those facing debt, will hardly be able to prove that they can pay a $5 million deposit.

Recognizing this, the Santa Ysabel threaten to launch its own site, and encourage other sovereign nations to the same, in the hopes that the licensing requirements are relaxed.

The Santa Ysabel’s poker offering is so grossly in violation of everything the regulated markets stands for (identification verification, strong authentication, responsible gambling etc.) that the proposed bills are amended as to be more amenable to smaller tribes.

Admittedly, this theory is a bit of a stretch, but the idea that the Santa Ysabel are merely posturing is not.

  • The Santa Ysabel are doing this to facilitate the passage of an iGaming bill.

Likely not, if only because government and the state’s most influential tribal factions are already in favor of iGaming legislation, with the “bad actor” language the only true dividing point.

At best, Santa Ysabel’s announcement may encourage the Morongo and the state’s other tribes to settle their differences before other tribes go rogue. But even if the Santa Ysabel manages to launch its site by next week, its chances of drawing a significant user base are so low that it will likely not instill lawmakers with any sense of urgency.

More to the point, how would the faster passage of an iGaming bill necessarily help the Santa Ysabel?

Short answer: it wouldn’t.

But it may spark a legal conflict that eventually sees sovereign nations gain the right to legally offer online poker, and that could certainly benefit the Santa Ysabel, as it would position itself as the pioneer of an alternative gaming market. Who knows, maybe by then the tribe would be in a position to host you know, a credible site.

In either case, here’s a warning to California poker players: Don’t play on – especially if it launches under the current conditions.

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Robert DellaFave

Robert DellaFave writes for a variety of online gaming sites and is also working on programming a poker simulation creative enough to beat the best. Follow Robert on Twitter @DivergentGames and on Google+

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