Mohawk territory gambling on a risky business

[Qbins Missile Crisis]

A Liberal MP wants Ottawa to regulate the First Nation's gambling operation

KAHNAWAKE, QUE.–The newly built, red aluminum building beside the Big Bear Trading post on Highway 132 doesn't exactly scream Vegas from the outside. There isn't a grand entrance with flashing neon lights or high rollers in tuxes stepping out of stretch limos.

But when you walk through the front door, past the burly bouncer and numerous camera monitors, Snake's Poker Club – which one bar patron says "reminds me of Arizona" with its desert-style decor – is a pretty swanky spot with soft leather chairs arranged around 15 bright red tables, each emblazoned in the centre with a Mohawk warrior's face in profile.

Gamblers in this 24-hour poker palace, 10 kilometres south of Montreal, are sipping drinks, tucking into thick steaks and smoking up a storm around the U-shaped bar. They are watching the Canadiens hammer the Boston Bruins in the first round of the NHL playoffs on a huge, flat screen TV overhead.

Suddenly, a big cheer erupts at the table where Montreal resident Amado Landicho and his buddy are playing in a Texas Hold'em tournament. The Habs didn't score, but Landicho just got a straight flush, and the house pays $200 for a handful of hearts like his.

"This place is awesome. It's better than playing poker at the Montreal casino because that's all electronic. Here they have real dealers and cards and chips," notes Landicho, grinning ear-to-ear.

And Snake's card club – complete with a "Viper Room" for VIPs – is the real deal for both residents and visitors who want to play a cash game of Texas Hold'em.

But in Ottawa's eyes , it's all too real – and anything but legal.

The handful of poker dens that have sprouted up in this proud Mohawk territory of about 10,000 people is just a fraction of the lucrative gambling operation that has taken root along the St. Lawrence River's south shore. It seems an unlikely area – one heavily steeped in honour and tradition – for such a risky business to flourish.

But touring the 5,300-hectare territory and speaking to residents and leaders, you quickly get the sense that Kahnawake struggles with a central contradiction: 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.

Here everyone knows your name as well as your family nickname (for instance Snake is Stan Myiow, whose grandfather was known as Snake Oil), and you go to the post office to pick up your mail because there's no delivery and no street signs.

At the same time they're an international player. They issue their own passports and have their own "Peacekeepers." 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.)

"There are emotional scars there and some people probably won't ever recover. No one wants that to happen again," he says.

"I'm not saying we're the shining beacon of integrity. But as usual, we're seen as the bad guys. We're the host, not the gamers.

"Why is it illegal? It's not money laundering or anything," argues Delisle, who doesn't gamble.

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 licences the only servers in North America that host real money online gambling sites. All others are based in the Caribbean, Australia and Europe.

So when you click onto Lucky Charm Casino, PokerStars or Sports Fever Casino, you're actually playing a hand or walking into a virtual casino right here on this Mohawk reserve in suburban Montreal.

"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.

"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.

"We're not cheap. Think in terms of boutique shopping. This is not Costco and this is not Wal-Mart. This is Rodeo Drive," says Barnett, who is also on the board of directors of the Kahnawake Economic Development Commission.

"When you come to MIT, it's because you're serious about your business, you want top-end connectivity and bandwidth. You want full security."

Barnett, who used to work on the enforcement side of the local regulator, says the gaming commission has turned away more than 100 applicants worldwide who didn't pass muster with the commission's strict requirements.

"Who was regulating online gaming in the mid-'90s? It was the Wild West. There were no guarantees.

"We could make a lot more money if we opened the door to everybody. It's a revenue-generating industry, but dignity and honour and respect mean something at the same time. You sleep with a dog, you're going to get fleas," says Barnett, who is annoyed that the legality issue continues to rear its head today even though they've successfully been in operation for 10 years.

"MIT is not a gaming company, we're a utility company. Think of us as Ma Bell, or Hydro Quebec. We simply provide the service, the fibre-optic backbone and connectivity which permits online gaming clients to make their offerings on the global grid," he explains.

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.

Liberal MP Roy Cullen, whose Etobicoke North riding includes Woodbine, met a week ago with Justice Minister Rob Nicholson – who also has the Fort Erie Race Track in his riding – to talk about the online gambling issue.

If no action is taken, he vows to introduce a private member's bill so that the issue will be debated and dealt with in Parliament. "I think something is going to happen. My preference would be to open it up and regulate it," says Cullen.

Grand Chief Delisle said the justice minister's office assured him and MIT last month that nothing was imminent.

"There's always a concern that people are keeping an eye on us," he says.

Meanwhile Nicholson's director of communications said the minister is consulting with various stakeholders to discuss the matter.

"Internet gambling is illegal under the Criminal Code, with some narrow exceptions. It is the responsibility of each province to administer and prosecute, and for the police to enforce (it)," says Genevieve Breton in an email.

Opinion on gambling is mixed locally. A few ladies, who were selling raffle tickets at the post office near the Caisse Populaire bank to raise money to send local athletes to the upcoming North American Indigenous Games, said they didn't like what it brings to the territory, and they're relieved that two referendums on bringing in a casino here, like the Mohawks have in Akwesasne, resulted twice in a thumbs-down.

"It's a negative influence on our young people," said one mother who did not wish to be identified.

For their part, the owners of Snake's Poker Club abide by the etiquette and regulations of the gaming commission. The month-old establishment has even advertised on AM radio stations in Montreal.

"It's perfectly legal here. The rest of it is just government against the Indians. It's the same old story," says co-owner Ben McComber.

And as Montreal resident Jason Gracie quips: "I'm not a gambler. I'm a poker player."

Apr 19, 2008 04:30 AM
Lisa Wright
Business Reporter
TheStar.com