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March-07-2008,
Setting the Facts Straight About Kahnawake and the AG of Canada...By Hartley Henderson

Setting the Facts Straight About Kahnawake and the AG of Canada

Recently, a story came out in a Toronto based newspaper claiming that the Canadian Attorney General is prepared to shut down Kahnawake on behalf of the horse racing industry. While the story may sound enticing it is hardly truthful. Woodbine Entertainment, located in Toronto, has gone on the record as stating that they would like to be involved with more internet wagering. They already offer online horse betting via Horseplayer International, but clearly they want to be able to offer other forms of gambling as the tote does in the UK and Australia. Furthermore, Canadian laws state that provinces can only offer gambling within their jurisdiction. Hence, Horseplayer International does not have the authority to offer its products in areas where their operation is not situated and absolutely cannot offer the product globally. As a result, Woodbine Entertainment decided that if they are unable to offer the product, no one else should. The company has used the "why should we have to pay taxes if they don't" argument to justify their position, but in reality they are simply looking to curtail competition. Someone from Woodbine Entertainment apparently has approached Roy Cullen, MP for Etobicoke, to have all non officially sanctioned gambling (i.e. non casinos, horse tracks or provincial lotteries) shut down, to which Cullen replied "I'll look into it."

Up to that point the facts are irrefutable. But that's where it ends. Somehow that comment of "I'll look into it" stated by Mr. Cullen has been extended to a wild claim that the AGs office is about to shut down Mohawk Internet Technologies on the Kahnawake reserve. How Kahnawake got thrown into the mix is uncertain, although there are suggestions the Mohawks were implicated by the writers who have a personal vendetta against the aboriginal group. One thing must be made clear, Roy Cullen has no say in what happens with gambling, and for that matter neither does the federal government. Last year I emailed the AG's office about a different question regarding gambling in Canada, and their response was "Gambling is a provincial issue. It's up to the provinces to decide what gambling laws they pass." Michael D Lipton, a Toronto gaming lawyer confirmed as much to me and said the federal government will not deal with gambling since all gambling authority was handed to the provinces by the federal government in 1988. Consequently, any promises Roy Cullen made to Woodbine Entertainment or any other gambling entities in Canada are hollow because the federal government does not have the ability to pass gambling laws. It must also be noted that Roy Cullen has already stated his intention not to run for re-election after this term, stating it is time for him to try new ventures. And with a federal election likely to take place in the near future, his assurances, if they were actually said, are even less meaningful.

The Mohawks have been totally transparent with their operations and have operated in an honest and efficient manner. The 1982 Constitution Act protects standing aboriginal rights ,which includes gambling. This is irrefutable. Even if the police or governments attempted to arrest Kahnawake for offering illegal gambling, it would almost certainly be thrown out of court ,as the case would be deemed unconstitutional. Regardless, neither the Canadian government nor the Quebec government have any intentions of challenging the Mohawks sovereign rights. As Chuck Barnett, spokesman for Mohawk Internet Technologies, stated to me, "we have always been open and honest with government and the police in Canada. They are always welcome. The RCMP were on the reserve just 2 months ago conducting an investigation about a threat by an online user against the U.S. In the spirit of cooperation and national security we were able to provide them the assistance that they had requested of us, although we are under no such obligation. Also, seven standing Senators visited the reserve and MIT." Chuck also mentioned that the Quebec Minister of Public Security was on the reserve to check out the facility and seemed to be impressed with what he saw. As well, in 2 separate GIGSE conferences, ministers from Ontario that had gaming as part of their portfolio called Mohawk Internet Technologies "a success story that should be copied." Needless to say, those words and actions hardly illustrate a government or police system that considers what the Kahnawake Gaming Commission to be doing as illegal.

There has been some confusion in relation to the arrests that took place last year in Montreal regarding Cyberworld Group which has a business relationship with Golden Palace. Golden Palace is a licensed casino operator on the Kahnawake reserve, but Cyberworld is not, and never was, licensed by Kahnawake. Cyberworld apparently was hired by Golden Palace to provide marketing and administrative functions for Golden Palace and operated in the village of St-Laurent. The SQ (Quebec police) raided the Cyberworld facility and arrested members of the group for illegal gambling operations. It is unclear what exactly the group was doing, but without question they were performing some sort of activities on the mainland that are illegal under Quebec Law. Chuck Barnett wanted to make it clear, "there is a threefold rule in Kahnawake that we insist on to confirm a bet has taken place. First, the wager must take place in Kahnawake. Second, the skill/bet/game must exist in Kahnawake. And third, the payout-debit transaction as the result of the wager between the two parties must take place." Since Cyberworld was clearly operating outside of Kahnawake, they were on their own. And if they were conducting some sort of gambling off the reserve, they had no one to blame but themselves. But while the Cyberworld arrests illustrated that Quebec was prepared to arrest companies operating off the reserve, they also showed that the police do not seek any jurisdiction on the reserve. If the real target of those arrests was Golden Palace, the SQ or RCMP would have stormed the reserve and confiscated computers and files. However, once the arrests took place, it was left there. A fine was issued and no one approached Kahnawake, first nor last. The implication is obvious: the incident had nothing to do with MIT or the Kahnawake Gaming Commission.

There is also some belief that the Canadian government is afraid to go onto Mohawk territory for fear of another Oka, an incident where police and a non-native man were killed when the government tried to put a golf course on sovereign land. To this day that incident is seen as a black eye on the Canadian government. While that is almost unquestionably in the back of the minds of the governments and police, a more likely concern of the governments is the ramifications of challenging Mohawk sovereignty. To do so, they would have file suit in the Supreme Court to challenge the constitutionality of the Mohawks actions regarding gambling. But all lawyers I spoke to that specialize in constitutional law have stated that the government wouldn't have a leg to stand on. Aboriginal rights are guaranteed by the constitution. Thus, a failed attempt to challenge the constitution could open a Pandora's Box which could see all native groups trying to assert their rights.

So the conclusion couldn't be clearer. Kahnawake is operating legally per the Canadian constitution and the federal government has no basis to challenge them on constitutional or jurisdictional grounds. If anyone wants to try to challenge Kahnawake's legality it will have to be the Quebec government, but Chuck Barnett made it clear that Kahnawake has a cooperative relationship with the Quebec government and police. Hence any stories that imply the federal government has some basis to shut off payment processing to the Kahnawake reserve are flawed. It's not the Kahnawake Gaming Commission's fault that the horse racing industry has to pay taxes, nor is it their problem that they have been given a constitutional right to offer a form of gambling that the horse tracks and provinces can not. Perhaps Chuck Barnett expressed it best when he stated, "If Woodbine has a problem paying taxes to the government, or if they want to try and expand their gambling avenues, have them set up part of their operation in Kahnawake. We'll work out a mutually beneficial arrangement.

03-07-2008
Hartley Henderson
MajorWager.com
henderson@majorwager.com

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