The Canadian federal government announced on Tuesday they’re considering new measures to stamp out internet gaming sites based on the Kahnewake reserve located near Montreal Quebec. This move will certainly spark a major conflict between the First Nations and Ottawa.
The government has long considered the nearly 400 poker and casino sites operating there to be illegal but has failed to act. Neither the federal or provincial governments have ever attempted to enforce the law against the Kahnewake Gaming Commission.
Minister of Justice, Rob Nicholson, has asked his officials to look into “whether the enforcement of the criminal code provisions could be assisted with other measures”. The measures could include restricting banks and credit cards from conducting transactions with illegal operators. Sounds like they’ve taken a page from the US government’s playbook...
Here’s the rub...
The Kahnewake Mohawks claim to be a sovereign nation so Canadian laws don’t apply to them. They cite section 35 of Canada’s Constitution which protects native culture. They claim that gaming is central to their culture as a means of settling disputes through competition instead of violence. Other Canadian native groups have announced plans to emulate the Kahnewake.
Great Canadian Gaming Corp, and others in the billion dollar horse racing industry say they pay $1 billion in taxes each year and carry huge expenses. They claim the gambling sites hosted within the MIT (Mohawk Internet Technologies) servers are parasites and poachers. The track owners want the government to force ISP’s to block the sites from Canadian access.
According to Chuck Barnett of MIT, Ottawa is a foreign government. He says Ottawa has no business regulating activity on Mohawk territory. “If I were a Canadian, I might instead be more interested in how explicit legislation could serve as the catalyst for a potential source of economic development, employment and revenue through taxation,” He said.
Michael Lipton, a Toronto lawyer specializing in gaming law agrees with Barnett. He stated that the horse racing industry has a monopoly on gambling in Canada. “I guess if I had a monopoly, I wouldn’t want anyone to compete against me either”, he said.
Lipton pointed to the current situation in the US. “They are completely bogged down on how to block the system”
Lipton acknowledged there have been some problems with fraud. He was referring to the Absolute Poker scandal. The Kahnewake Gaming Commission fined Absolute $500,000 in that case. He claimed that was the exception, most sites are transparent and credible.
Lipton proposes the government would be better off bringing the Kahnewake sites into the system and regulating them. He thinks regulation would help protect against money laundering and protect the public. It would also bring in tax revenues and provide Canada with a competitive edge within the gaming industry. “I think Ottawa should embrace this and recognize that people don’t want to be in a position where the government tells them what they can or can’t do in the peace of their own home,” he said.
One thing is for certain...
Whenever the Canadian government and the First Nations have gone to war over serious issues, blood has been shed. The Kahnewake won’t just roll over for Ottawa on this, there are hundreds of millions of dollars at stake.
I predict this will be a long and nasty fight.
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