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Quebec little synergy on Internet gambling

2/8/10 - The positive news last week that Loto Quebec is to venture into online gambling with other Canadian provinces following Quebec government approval has to some extent been clouded by developments that indicate there has been little synergy on Internet gambling in the province.
The Kahnawake Mohawk tribe's extensive and ultra-modern hosting and regulatory facilities lie within a 30 minute drive from Montreal, and yet judging by a recent statement from the Kahnawake there appears to have been little if any collaboration between Loto Quebec, the provincial government and the sovereign First Nation regulatory jurisdiction, which has recently been the subject of a substantial revamp.
In a statement this week the Mohawk Council of Kahnawake responded to the Loto Quebec moves, commenting that these come 12 years after the Indian nation's entry into the online gambling industry and complaining that Quebec finance minister Barchand’s comments on making the Loto Quebec announcement, and those attributed to him in the media, seem to imply that the Loto-Quebec initiative will negatively impact Kahnawake and the initiatives it has taken in the online gaming industry.
“I think Quebec believes that it is going to take the online gaming industry by storm,” MCK Gaming Portfolio Chief John Dee Delormier said in the Kahnawake statement.
“That is certainly not the case. They are entering an already established market and are only offering their games to a limited player base. It is a recipe for disaster for them.
“At no time did they consult us on what they were doing,” Delormier continued, “and maybe they should have asked for help, because their short-sighted view on e-gaming will end up with egg on their face.”
The MCK said that it is disappointing that Quebec “...fails to understand, or deliberately ignores, the opportunities for synergy between Loto-Quebec and Kahnawake.
"Loto-Quebec’s online gambling operation could be hosted from Mohawk Internet Technologies. The Regie could work with the Kahnawake Gaming Commission to harmonise their regulations concerning online gaming,” the statement points out, additionally drawing attention to the pledges that Quebec made to Kahnawake in the October 15, 1998 “Statement of Understanding and Mutual Respect.”
This statement says in part, “Kahnawake and Quebec further agree to participate as partners in some of Kahnawake’s economic development ventures. Quebec also agrees to develop financial and fiscal arrangements that would provide for Kahnawake’s long term economic stability.”
In June 2009 Quebec Premier Jean Charest and MCK Grand Chief Michael Delisle Jr., signed a further “Statement of Understanding and Mutual Respect” that was designed to improve intergovernmental relations and establish economic partnerships between Kahnawake and Quebec.

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The Kahnawake statement continues: "Quebec has authorised Loto-Quebec to offer online gambling, meaning it will become yet another online gaming operator offering casino, poker and other games of chance – making it a competitor of long-established online gaming operators such as PokerStars, Party Gaming, Full Tilt Poker and Ultimate Bet.
"Many of these operators are licensed by and operate from jurisdictions such as the Isle of Man, Gibraltar and Alberney as well as Kahnawake.
"It is difficult to understand how Loto-Quebec’s late and limited entry into the market will negatively affect – let alone “cannibalise” – these sites."
The MCK also points out that Kahnawake does not, nor has it ever, offered online gambling itself. Since 1999, the tribal enclave has hosted online gaming operators through MIT - its world class internet service provider and data centre. Kahnawake has also regulated third-party online gaming operators through the Kahnawake Gaming Commission.
“Quebec Finance Minister Bachand’s comments are a clear indication that Quebec does not have any understanding in relation to Kahnawake’s role in internet gaming,” KGC Chairman Dean Montour said.
“Unlike Quebec, Kahnawake is not - nor will be - an internet gaming operator. By means of the Kahnawake Gaming Commission, Kahnawake is considered a leader and world-class regulator for online gaming. In addition, Kahnawake has a ‘state-of-the-art’ hosting facility for third party i-gaming operators at Mohawk Internet Technologies. As a result, Loto-Quebec’s announcement will have minimal impact on Kahnawake.
“Given his limited knowledge and understanding, it is disappointing that Mr. Bachand has chosen to use language such as ‘cannibalise,’
‘underground economy,’ and “illegal gambling” in his assessment of the existing i-gaming industy,” Montour continued. “Despite this position, the KGC has always maintained an ‘open door’ policy in regards to any further discussion with Quebec in regards to internet gaming."
Through this new initiative Quebec is also going to be both an online gaming operator and a regulator, the Kahnawake statement claims – through the Regies des alcools, des courses et des jeux. This environment of “self-regulation” is a position that Kahnawake, and most other jurisdictions in the world, have avoided to maintain transparency, fairness and integrity to all players, the statement continues.
“Over the past 12 years, Kahnawake’s participation in the online gaming industry has generated more employment, highly skilled training opportunities, fiscal advantages and positive global recognition than any other economic development venture in Kahnawake’s history,” the MCK’s statement concludes.
“Now that Quebec has decided to ‘legalise’ online gaming for its purposes, it has a perfect opportunity to ‘participate as partners’ with Kahnawake to advance this developing industry.
"Instead, Quebec has chosen to continue its implicit demonisation of Kahnawake. This is truly disappointing and, unless Quebec reconsiders its position, will certainly colour the relations that Kahnawake and Quebec seek to maintain in other areas.”

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