Biblitz delivers advise

ASK Biblitz about Gambling Kahnawake.

'Provincial and territorial governments are free to make local decisions regarding the kinds of lottery or gaming schemes that they may conduct or license within the limits set by the Criminal Code.'

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PartyPoker & PartyCasino, RIP. January 2019


Are other First Nations in Canada hoping to duplicate the spectacular success of those maverick Kahnawake Mohawks in Internet gambling and, if not, why not?

See also aboriginal funding in Canada - how public money earmarked for Indians is improving the lives of Ottawa lawyers plus more on Online Gambling and the super-sized Indian Residential School Settlement - how much is too much?

Update Feb. 19/10:
Part 2 of RCI's program, The Link, on Feb. 19/10 included a segment describing a new proposal by the Quebec government in partnership with B.C. and four Atlantic provinces to license online gambling. According to the report, revenues are projected at $50 million annually. Please check back soon for updates.

Biblitz replies:

One would hope so, especially if aboriginal self-government actually means something in Canada. Biblitz fears it may be one of those phrases the boys on Madison Avenue use to get him to buy bars of soap and sugary breakfast cereal and so on. Biblitz would certainly be pleased to hear about any First Nations Internet gambling proposals using sovereignty to aboriginal advantage. All info most gratefully received! In the meantime ...

Sovereignty issues that make Kahnawake's enterprise risky:

The Draft Umbrella Agreement with respect to Canada/Kahnawake Intergovernmental Relations Act of Jan. 17/01, now the Joint Presentation Renewed Relationship between the Mohawks of Kahnawake and the Government of Canada, a framework agreement representing early stages in treaty negotiations, provides as follows:

Item 9 (w) Kahnawake has jurisdiction or authority or both with respect to the following subject matters as set out in sub-agreements corresponding to each subject or subjects... (w) Gaming. (at p. 9)

However, at p. 20 of that document, item 74 reads:

For greater certainty, Kahnawake's jurisdiction as set out in sub-agreements does not relate to those matters within Canada's jurisdiction under s. 91(27) of the Constitution Act, 1867 (the mighty Criminal Code of Canada, which currently prohibits any gambling enterprise not regulated by the province in which it takes place).

But don't traditional aboriginal gambling rights based on historical practices trump provincial regulations?

Yes, but you'd have to prove gambling took place historically on the aboriginal lands claimed and Internet gambling is quite recent!

Here's how it works:

Legislation prohibiting any provincially unregulated Internet gambling enterprise in Canada:

The general scheme of the gambling provisions in the Criminal Code Part 7 is to prohibit all forms of gambling except those that are specifically permitted by the code. Section 204 permits private bets between individuals who are not engaged in the business of betting. It also permits pari-mutuel betting on horse races, where the federal Minister of Agriculture regulates the betting.

Section 207 permits a broad range of "lottery schemes," defined to include various forms of lotteries, gaming and pool betting that are conducted by a province or territory, including those operated on or through a video device, slot machine, computer or dice game. Section 207 also permits a smaller range of lottery or gaming schemes that are licensed by a province or territory, for example, to charities, but not those that are conducted on a video device, slot machine, computer or dice game. Section 207.1 permits, under certain conditions, a broad range of lottery or gaming schemes operated on cruise ships that are on an international voyage.

Prior to 1969, legal gambling in Canada was primarily limited to pari-mutuel betting on horse races and some low-stakes charity gambling. A joint parliamentary committee had considered the possibility of expanding legalized gambling in the 1950s. The legalization of a state lottery in New Hampshire in 1964 reawakened interest in lotteries throughout North America.

That led to the 1969 Criminal Code amendments in Canada that permitted lottery schemes being conducted by the federal government or provincial/territorial governments and those being licensed by provincial/territorial governments. There has never been Criminal Code permission for a lottery scheme that is licensed by the federal government. Clearly, Parliament chose to expand permitted gambling on the basis that the proceeds would benefit "public good causes," including governments, rather than private, commercial interests.

In 1979, a federal-provincial-territorial agreement on gambling was signed, whereby Canada agreed not to conduct lottery schemes, and in return it would receive what now amounts to some $50 million annually. In 1983, Parliament amended the Criminal Code to permit pool betting operations conducted by the federal government.

Litigation ensued, with some provinces complaining that the federal government was really conducting a lottery scheme and with the federal government complaining that Quebec was operating a pool betting operation. The Canadian and provincial/territorial governments resolved all outstanding litigation by signing a 1985 agreement on gaming. Under the agreement, the federal government agreed to place legislation before Parliament that would remove the authority for federal lottery schemes and pool betting operations and explicitly permit the province and territories to conduct lotteries, pool betting and other games of chance.

The 1985 amendment also clarified that provinces could conduct lottery schemes or other gaming activities operated on or through a video device, slot machine or computer, but they could not license others to do so. Provinces and territories agreed to give the federal government $100 million for the 1988 Calgary Olympics and to continue the annual payments under the 1979 agreement. A 1999 amendment to the Criminal Code permitted lotteries or gaming schemes that are operated by a province or territory through a dice game.

The lottery scheme provisions in section 207 express the current federal government policy. Provincial and territorial governments are free to make local decisions regarding the kinds of lottery or gaming schemes that they may conduct or license within the limits set by the Criminal Code.

Some provinces choose to operate casinos and others do not. Provinces and territories determine the types of games or lotteries that can be operated in each province. To this point, only the Northwest Territories and Nunavut have decided not to offer any slot machine gambling, which includes VLTs. British Columbia, Ontario and Yukon have chosen not to offer any VLT gambling in bars, but do offer slot machine gaming in casinos.

Some provinces, including Alberta, Manitoba and New Brunswick, have held provincial or municipal referenda relating to the removal of VLTs from bars. In provincial referenda, no province has chosen to remove slot machines from all bars. However, in provinces with municipal referenda, a few municipalities have chosen to have VLTs removed from bars. Some provinces have chosen to cap the number of VLTs that will be placed within the province, as is the case with Quebec. Clearly, the issue of problem gambling as balanced against individual choice and provincial revenues has arisen in the context of provincial or municipal referenda relating to machine gambling. (From Apr. 21/04 minutes of the Standing Senate Committee on Legal and Constitutional Affairs in a presentation by Hal Pruden, counsel with the federal Dept. of Justice, singing for his supper here in a discussion concerning Bill S-6, An Act to amend the Criminal Code (lottery schemes), (now Bill S-11, which received Third Reading May 17/05), a bill seeking to remove video lottery terminals (VLTs) from bars)

Somehow Mohawk gambling operations continue without regulation or prosecution:

Betting on Kahnawake

Mohawk territory gambling on a risky business

By Lisa Wright
April 19/08

... touring the 5,300-hectare territory ... you quickly get the sense that Kahnawake struggles with ... trying to retain and uphold the historic ways of the Mohawk nation while literally taking a gamble in the new economy of the 21st century. ... They issue their own passports and have their own "Peacekeepers" (police force). And they also happen to be the undisputed capital of online gambling in North America, housing one of the most cutting-edge, high-tech centres for poker, casino games and sports betting in the world.

While the games people play at Kahnawake (pronounced Gah-nah-WAH-gay) technically violate Canadian law, for the last decade they've enjoyed a hands-off approach by government and police, who clearly aren't eager to walk into the absolute hornet's nest of shutting them down. The bitter memories of the 77-day Oka

standoff in 1990 that resulted in one death still linger in the minds of residents today, not to mention the Canadian and Quebec governments, says Mohawk Council of Kahnawake Grand Chief Mike Delisle. (Mohawks here blocked a major Montreal artery, the Mercier Bridge, in support of a protest by First Nations in neighbouring Kanesatake over the expansion of a golf course.)

.. The biggest piece of the gaming pie here in "K-town," as the kids call it, is of the online variety and centred at a state-of-the- art, high security fortress called Mohawk Internet Technologies, or MIT, which houses the computer servers for 470 global Internet gambling sites. You can't just walk in and take a tour of the massive operation, which is coincidentally known as MIT, just like Cambridge's well-known Massachusetts Institute of Technology. In fact, security swiftly approaches any unidentified vehicles that drive into the parking lot. Pictures show the inside lined with rows and rows of servers stored individually in what look like tall, black high school lockers. MIT is regulated by the Kahnawake Gaming Commission, which licenses the only servers in North America that host real money online gambling sites. All others are based in the Caribbean, Australia and Europe.

... "The games take place in Kahnawake Mohawk territory. The games don't take place where the player is. If you're logging on in Topeka, Kansas, you're playing right here. All the core engines which drive the games are located in Kahnawake," explains Chuck Barnett, who sits on MIT's board of supervisors (also on the board of directors of the Kahnawake Economic Development Commission). "It's a massive responsibility. I sleep with one eye open because the Internet is on 24 hours, seven days a week. There is no vacation from this."

The ante for those who apply to run such sites is steep: $25,000, which includes deep financial and criminal background checks on all applicants. After that, the annual fee for MIT's international clients - currently 65 are licensed to run nearly 500 websites - is $10,000. ...

MIT employs 200 people while another 500 jobs will soon be created here by Mohawk-Morris Gaming Group, which will handle the operations and marketing of the popular Bodog Entertainment brand the online gambling powerhouse founded by colourful Canadian billionaire Calvin Ayre - in North America. "These are technically savvy jobs. These are 21st century jobs. This is not slinging hash in a diner somewhere or distributing bingo cards or working in a smoke-filled betting parlour," notes Barnett.

The Mohawk council doesn't collect or pay taxes to the federal or provincial government. Delisle says MIT raises a "substantial" portion of the community's revenue, which is fed back into the simple little town for everything from upgrades to the arena to equipping hospitals and upgrading schools, where the traditional Mohawk language is still taught. The fact that Kahnawake doesn't collect taxes and has been allowed to operate outside federal gambling law rankles the Woodbine Entertainment Group, who argue their market share is being eroded by illegal online gambling. ...


A Cree Life

The Art of Allen Sapp

Featuring the work and reflections Plains Cree artist Kiskayetum Saposkum

The selection above by the great Allen Sapp is titled simply, Playing Cards. Biblitz hovers ghost-like in the shadows, examining the cards and privately tutting players who might've improved their game back in the day with a few lessons online from PartyPoker!


Cheating? Biblitz? Tut-tut, sir. Surely an old man may enjoy a friendly wager with a few of Caravaggio's young sharpies occasionally to top up what's left of his pension. Or are you referring to one of Kahnawake's cheating scandals, perhaps? Earnest toilers at MIT put a team on it years ago. Ancient history.

About Kahnawake:

Canadian Geographic

Spoken here

The Mohawk community of Kahnawa:ke near Montreal takes a page from Quebec's language legislation

by Mark Abley
September/October, 2003

... Kahnawa:ke is not a remote place; its 8,000 or so residents are immersed in the life and languages of greater Montreal. Many of them work in the city, and Mohawk students can be found at several of the city's leading private schools and both of its English-language universities.

Kahnawa:ke can seem like a quintessential working-class town. Idealistic German tourists, hoping to meet up with timeless wisdom, have been distressed to learn that this is a community fond of country music and heavy metal, one whose residents tend to be serious about bingo, passionate about wrestling and hockey, increasingly anxious about obesity and diabetes and proud of their numerous war veterans. Don't come here looking for a Green Party vision of indigenous America. (-- p. 78)

Note, too, that the language spoken in this epic Canadian film is not Huron but Mohawk.

Update March 13/10: See CTV W5's The Jackpot, Part II for a glimpse of former Bodog CEO Calvin Ayre now reduced to exile in hurricane-tossed Antigua beyond the reach of U.S. justice and tax authorities, who may or may not be investigating his company's pre-UIGEA online gambling operations. Ayre had admittedly flown in a woman he described as 'this week's model' companion, who dutifully appeared in the pool next to him and managed to feign interest on a deadly dull fishing expedition. Far more compelling were the bold maverick Mohawks, who defended their right to immunity from Criminal Code provisions barring their gambling activities on the dubious grounds that they somehow never attorned to Canadian law. Federal and provincial authorities were reported to be reviewing the Mohawks' gambling enterprise, which they operate tax free - unlike Ontario's casino agreement with Rama Nation:

The agreement complements ... the $3 billion Gaming Revenue Sharing and Financial Agreement signed by the McGuinty government and the Chiefs of Ontario in February 2008. ... Provincial revenue from resort casinos, estimated to be $162 million in 2009-2010 ... OLG will continue ... overseeing the management and operations. ... Rama First Nation assumes the role of commercial landlord ... and continues to receive lease payments and a share of casino revenue (which is shared between 127 reserves in Ontario).
Many thanks to a visitor who explained that Rama Nation's winning entry was one of three finalists selected following a province-wide call for proposals. Like U.S. states, Canadian provinces take their revenue cut through casino agreements like this one. Rama Casino is the only one of Ontario's 11 casinos to be run by a First Nation, and it will be subject to all the same laws and regulations as the others.

So clearly there are procedures in place in Canada for First Nations to negotiate the right to operate a legal, fully regulated gambling enterprise.

Legalized Gambling

For and Against

Edited by Rod L. Evans and Mark Hance

... Does reservation gambling, then, support the proliferation of a federally mediated tribal culture to the detriment of American Indian nationhood? Or can the tribally run American Indian gambling industry be appropriated in ways that support indigenous identities and traditions?

The answer depends to a large extent not on how conflicts with external forces are resolved but on how factions within Indian communities come to understand one another. For the presence of high-stakes gambling facilities has aggravated existing conflicts within the Native American community itself. Throughout the U.S., tribal leaders have argued that gambling revenues provide the most available means to stimulate reservation economies. This claim is supported by the great success of a number of tribal communities. Gambling on the Mashantucket Pequot Reservation has transformed an all-but-abandoned Indian territory into a thriving and dynamic community. In other places, however, gambling has had a more negative impact. In the most dramatic example, the establishment of high-stakes gambling operations at Akwesasne divided the Mohawk community into gambling and anti-gambling factions. At the height of the controversy two men were killed. The Mohawks continue to be plagued by this fundamental division.

... Gambling is a notorious industry, and many Indians are concerned that tribal leaders and crime bosses will develop powerful alliances. In California, for example, mobsters attempted to gain control of the Rincon Tribal Council's high-stakes bingo operation. Their efforts were eventually thwarted by internal tribal politics and the work of federal agents. Nevertheless, the possibility remains that Indian gambling operations could be infiltrated and run by organized crime.

Reservation gambling also creates new leaders who are politically and economically independent of both elected and traditional governing councils. Are these "bingo chiefs" appropriating a corporate tribal sovereignty for personal gain, or are they expressing their own fundamental rights as tribal people? That question is related to another regarding they long-term economic effects of reservation: Will high-stakes gambling stimulate the growth of viable reservation economies, or will it contribute to a greater disparity in the distribution and use of Indian resources? (From Modern Gambling Is Unlike Indian Games of Chance by Paul Pasquaretta in Part VII of Legalized Gambling For and Against, pgs. 352-353)

The Vancouver Sun

Bodog's ownership transfer guarantees virtual immunity

By David Baines
April 23/08

More of Baines on online gambling in Banana Canada.

The concentration of online gambling activities on the Kahnawake Reserve in Quebec is getting quite frightening. For years, Bodog, the online gambling firm run by part-time Vancouver resident Calvin Ayre, has run its business through servers owned and operated by Mohawk Internet Technologies, which is located on the reserve. MIT services hundreds of gambling websites, and processes more than half the world's online gambling traffic.

Last September, Bodog announced it would license its North American operations to the Morris Mohawk Gaming Group, which is also located on the reserve. On Monday, Ayre belatedly announced he had also transferred ownership of Bodog to the Morris Mohawk Group. Morris Mohawk is headed by Alwyn Morris, who won two medals in kayaking in the 1984 Olympics and was made a member of the Order of Canada. He is now director of the Mohawk Council of Chiefs in Kahnawake. "We could not have found a more perfect partner than Alwyn Morris and Morris Mohawk Gaming Group. Morris is a true Canadian hero," Ayre said in a release Monday.

Whether he's a hero or not depends on your point of view. Morris, like his Mohawk brethren, is using the reserve as a safe haven for all sorts of activities that would be considered illegal elsewhere in Canada. After the Oka debacle in 1990, federal and provincial authorities have been too scared to apply laws on the reserve that all other Canadians are subject to.

Transferring ownership to the Morris Mohawk group has provided Bodog with virtual immunity from prosecution. The firm can solicit billions of dollars in wagers without regard for regulation or taxation. Your local Rotary club, meanwhile, has to procure a licence before it can hold something as benign as a charity raffle. ...

Even a former Justice Minister was in on the lucrative online gambling game:

Barrie Examiner

Ex-MPP wanted CBC to say sorry; Doug Lewis suing broadcaster over gambling claims

By Tracy McLaughlin
April 17/07

Funny! PartyPoker was in Ottawa that year lobbying against an amendment to the Criminal Code that might have threatened its share of the Canadian market!

The only thing former Simcoe North MPP Doug Lewis wanted from the CBC was an apology for what he called "gotcha journalism," but he never got one, he said yesterday in court. Now, six years later, Lewis, a former Canadian Justice Minister, is suing the CBC for $800,000 for damaging his reputation in a broadcast that ran April, 2001 which, he claims, "maliciously" suggested he was running an illegal Internet gambling site.

"It was like getting kicked in the stomach," Lewis said on the witness stand. "Here was the national news media running a story saying that I was doing something illegal."

"And were you?" asked his lawyer, Peter Waldmann.

"Absolutely not," Lewis answered.

In the broadcast that ran on CBC's Canada Now and The National, Lewis openly admitted that he was involved in a completely legal Internet gambling business that operated out of the Caribbean island of Antigua. In Canada, Internet gambling is illegal except for government sanctioned gaming, which has prompted many Canadian companies to take their business offshore. In the interview, Lewis stated he believed Canadian laws should change so that billions of dollars in revenue from such sites would stay in Canada. But he insisted any Canadian who tried to log on to his website would be blocked, to concur with Canadian laws. But in the broadcast, CBC reporter Sasa Petricic contradicts Lewis and insists he was able to log on to Lewis' site, Tropical Casino, and place a bet on the Toronto Blue Jays using a Canadian address and Canadian funds, court has heard.

Lewis' lawyer insists Petricic's bet was "caught" within 20 minutes and he was given a full refund the next day. But lawyers for the CBC insist it was his winnings - not a refund.

In the end, it will be up to Superior Court Justice Bruce Glass to decide whether it was a refund or a gambling bet.

Lewis said he later resigned from the Internet software development company to get away from the controversy. The trial is expected to end next week.
Biblitz notes with interest that less than a month later, Lewis joined the roster of 40 benchers at the Law Society of Upper Canada for a term that ends in 2011, when he may seek re-election.