Canada Probes Indian Nation's Online Gambling Plans

08 February 2007
Jason Markusoff, Shawn Ohler, CanWest News Svc; Edmonton Journal
Thursday, February 08, 2007

EDMONTON – A northern Alberta First Nation that is offering to host online casinos is under investigation by the Alberta Gaming and Liquor Commission.

The commission says it will crack down on what it deems would be illegal gambling.

Alexander First Nation, just north of Edmonton, announced last October that its own gambling commission will regulate and offer licences to Internet gambling operators – based on the notion that the treaty band can derive powers from its own gambling law, separate from Alberta or Canadian laws.

The AGLC’s top official said he’s seen no sign of online casinos or poker programs operating yet, but is watching closely.

Norm Peterson, the provincial regulator’s CEO, said Alexander “hasn’t done anything” beyond creating a website that appears to solicit interest from would-be online casinos. The band also issued a press release, heralding its rules that would allow “a safe, high quality environment for on-line gamers.”

But when asked if the AGLC would shut down any online casinos that might eventually operate in connection with the nascent Alexander body, Peterson said: “Yes, it’s illegal under the Criminal Code, and we would take action like any other illegal activity under the Criminal Code.

“Internet gaming, unless it’s conducted by the province or licensed by the (AGLC), is illegal.”

Preparing to accommodate western Canada’s first online gambling operations, Alexander is building a 2,300-square-metre data centre on its territory, which will host the gambling websites’ computer servers.


Alexander’s venture is a departure from other Alberta reserves’ casino plans. Unlike the Enoch reserve’s new casino, whose machines are owned and controlled by the AGLC, Alexander’s gambling revenues would not be collected by the provincial government for the Alberta Lottery Fund. Six other first nations have applied to the provincial regulator to build casinos.

The Alexander commission’s director did not return phone calls for comment. Nor did band Chief Raymond Arcand.

But their casino-licensing scheme has a successful and legally questionable model in Quebec.

That province’s Mohawk Territory of Kahnawake is one of the world’s largest hosts for online gambling sites. It has operated the Kahnawake Gaming Commission since 1996.

Among Kahnawake’s hundreds of mostly offshore licensed casino and poker websites is Website founder Calvin Ayre, born in Lloydminster, Sask., was on the cover of Forbes magazine’s “Billionaires” issue last year.

The Alexander commission’s website has copied verbatim some of Kahnawake’s stated basic principles, “that the games offered are fair to the player” and “that winners are paid.” The reserves’ data-hosting firms are Alexander Internet Technologies and Mohawk Internet Technologies, respectively.

Loto-Quebec and Quebec’s attorney general have in the past said that online gambling based in Kahnawake is illegal. But charges have never been laid.

“Legal opinion is they shouldn’t be doing that and it’s a violation of the Criminal Code, but there’s a few lawyers that say it’s a loophole and they get around it,” said Garry Smith, a gambling research specialist at the University of Alberta.

Kahnawake was also the site of the 1990 Oka crisis, a tense dispute and standoff between Mohawk activists and police and military. Tensions between the government and reserve may linger.

“It’s just a rat’s nest – but they make a lot of money off it,” Smith said.

Some legal experts have argued that Kahnawake’s gambling activities are a right protected by the Canadian Constitution. It is unclear that Alexander would use the same defence, although an article posted on its gambling commission website makes mention of Alexander’s “sovereign” status within Alberta and Canada.

The band’s posted regulations also say the casino operators it hosts must abide by the tough new United States laws banning the processing of payments for gambling websites, and cannot accept bets from Canadian residents

The federal government does not regulate Internet gambling, besides provisions in the Criminal Code requiring that all computerized gambling be run under provincial gambling bodies. British Columbia is among provinces that have started small lottery games online.

The AGLC has long studied whether Albertans want Internet gambling. It does ongoing public opinion surveys.

It has no plans in the immediate future to start up legal online casinos, and it’s too early to say if it will ever endorse them, Peterson said.

“We’d want to make sure that government would want that, that Albertans would want that. We’ve got a lot of gaming activity in Alberta right now, and we’re looking at … whether or not we’ve reached that level where enough is enough or there’s room for future growth,” he said.

“I could think there could be wonderful business opportunities for Internet gaming, but we’re not going to be doing anything without it being ratified by our board and without a policy direction coming down through government.”

The province’s income from games of chance has grown in recent years despite the increasing popularity of online poker and casinos. This year, the province expects to rake in a record $1.4 billion from lottery and gambling revenues.

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