Mohawk Council of Kahnawake sues Ontario over iGaming regulatory scheme

Haley Hintze
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Posted on: November 30, 2022 1:28 am EST

The Mohawk Council of Kahnawake (“Kahnawà:ke”) has sued the Canadian province of Ontario over Ontario’s igaming regulatory regime and practices, declaring that the province’s officials and agencies have implemented a “unilateral re-interpretation” of the “conduct and manage” laws under which iGaming Ontario has been charged with regulating all online gambling authorized in the province.

In a complaint filed on Thursday, the MCK alleges that iGaming Ontario’s actions are illegal and unconstitutional and will undermine the “inherent Indigenous jurisdiction” of the Kahnawake Reserve, located just outside Montreal in Ontario’s neighbor province, Quebec. The lawsuit specifically names iGaming Ontario and the Attorney General of Ontario as defendants. iGaming Ontario is a subsidiary agency of the Alcohol and Gaming Commission of Ontario (AGCO), which is charged under provincial law with regulating all gambling services offered in the province.

The Kahnawake nation, through several interrelated tribal and business entities, has itself offered services and support to the global online gaming industry for more than 25 years, though it is currently shut out of the Ontario market. The Kahnawakes’ initial foray into online gambling in the late ’90s was to some extent a tale of fortuitous timing and geographic convenience. One of North America’s largest Internet data pipelines had previously been constructed across Kahnawake tribal lands, thus providing easy high-speed access that online-gambling providers sought.

Since 1999, the Kahnawake Reserve has also been home to Mohawk Internet Technologies (MIT), an entity wholly owned by the MCK, that provides hardware services and connectivity to online-gambling operators. Historically, many of those operators have been so-called “grey market” operators who are duly licensed by Kahnawake but not necessarily by all of the international jurisdictions where the operators may have offered services.

Though most MIT-hosted operators have been legitimate, and the MCK statement touts the nation’s long iGaming history, there have been exceptions. For example, the Kahnawake service entities provided services for both UltimateBet and Absolute Poker in the pre-“Black Friday” days, and the first official notification identifying Russ Hamilton as the inside cheater at UltimateBet was issued through the Kahnawake Gaming Commission. Later, UltimateBet and Absolute Poker were among the sites seized by the U.S. in 2011’s infamous “Black Friday” crackdown.

More recently, beginning in 2015, the Mohawk Council of Kahnawake has launched Mohawk Online, a gambling operator wholly owned by the MCK itself.

Tribal sovereignty, financial impact key issues behind dispute

A press statement issued by the Mohawk Council of Kahnawake accuses both Ontarian officials and Canada’s national Justice Minister, David Lametti, of failing to engage in a meaningful way with the MCK over the tribal nation’s concerns and claims. The Kahnawake nation has long claimed its tribal sovereignty extends to its online-gambling services, a position which has placed it at odds with both federal and provincial officials throughout Canada.

The MCK asserts that “Ontario’s iGaming regime threatens to undermine this important contributor to
our economy because it prevents all other gaming regulators, including Mohawk Online, and gaming operators licensed by the KGC, from carrying out gaming activities in Ontario—unless they are also registered with the AGCO.”

According to the MCK’s elected Council Chief, Michael Delisle, Jr., “We feel that the legal basis for Ontario’s iGaming scheme needs to be challenged in the Courts and is being used to cause irreparable harm to Kahnawà:ke’s own legitimate and well-established gaming industry.”

Delisle added, “The plain facts are that Ontario has implemented an iGaming scheme, which is based on a
very tenuous legal foundation, that is causing a significant loss of revenues for our community. Until Ontario sought to impose its ill-designed reinterpretation of ‘conduct and manage’ on operators and service providers, Kahnawà:ke was able to successfully operate across Canada in a regulated manner. The Ontario’s iGaming framework will have devastating effects on a source of income that has supplemented programs and services in our community for the last two decades.”

The ongoing regulatory battles between the Kahnawake, other Canadian tribal nations, and various Canadian federal and provincial regulatory bodies roughly mirrors the political landscape in the United States, where tribal efforts to expand into iGaming have run into opposition from competing shareholders and, on occasion, federal and state regulators.

In February of this year, Kahnawake officials signed a “mutual cooperation agreement on iGaming” with an Ontarian tribal nation, the Six Nations of the Grand River, which also alleges adverse impact from Ontario’s iGaming regulatory regime.

Featured image source: Mohawk Council of Kahnawake