Oldest Canadian Gambling Regulator Sues Ontario for Illegal Competition
Over two decades ago, the Kahnawake Gaming Commission (KGC) emerged as one of the world’s very first online gambling regulators. Situated in the Mohawk Territory of Kahnawake, Canada, just outside of Montreal, the KGC successfully managed and monitored countless iGaming operations since the mid-1990s. More than twenty years later, Ontario chose to launch its own competitive iGaming market. It’s been doing very well! So well that it may be infringing on the rights of their sovereign neighbors.
The Mohawk Council of Kahnawake (MCK) is not happy with how wide Ontario’s online sports betting market is growing. On Monday, the MCK announced in a press release that it intends to file a lawsuit in the Ontario Superior Court of Justice. The suit will revolve around Ontario’s online sportsbook market, its allegedly unlawful existence, and how it’s threatening the long-standing operations of Kahnawake.
Canadian iGaming Regulator to Sue Ontario
According to its press release, MCK is aiming its lawsuit at the Attorney General of Ontario and the province’s regulatory body, iGaming Ontario. A statement from MCK verifies the Council’s intent to challenge:
“…the legality and constitutionality of Ontario’s unilateral re-interpretation of the ‘conduct and manage’ provisions of the Criminal Code on which Ontario has based its new iGaming scheme.”
Ontario’s online gambling market, in its current commercially-competitive state, is still in its infancy. It hasn’t even been a year since the province officially transitioned from its former gov-run monopoly. The new scheme, complete with commercial licenses for domestic and international operators, went live on April 4, 2022.
Today, more than 30 private-sector licensees are operating a total of 67 gambling websites. They offer everything form online sports and eSports betting to casino gambling and poker games.
Such a competitive market is a first for Canada. Up until now, provinces that chose to launch any form of iGaming were wholly committed to managing government-run monopolies. Those operations did not push the boundaries of federal law, or pose a threat to Kahnawake. It would seem Ontario’s perfect recipe for success is stirring the pot in both regards.
MCK Challenges Legality of Competitive Market
It is not simply Ontario’s success that the Mohawk council is challenging, but rather the legality of its commercially competitive market. Ratsénhaienhs Michael Delisle Jr., elected Council Chief for MCK, explains their position:
“The plain facts are that Ontario has implemented an iGaming scheme, which is based on a very tenuous legal foundation, that is causing a significant loss of revenues for our community.”
If the MCK is successful in this challenges, it could have a detrimental impact on iGaming as we know it; the effects of which will be felt all across Canada.
Domino Effect of Consequences to Come?
Let’s imagine for a moment what might happen if MCK wins this challenge. It would be a domino effect of epic proportions. Without doubt, it would shatter the market in Ontario. From there, its tendrils would spread to other provinces and territories, subduing the future of Canadian online gambling regulation.
The biggest problem arises in Ontario. There are more than five dozen iGO-licensed websites. Their operators are heavily invested. They have worked to secure licenses, expand products and gain traction in what immediately became a saturated market. What happens if they are suddenly denied access? Just imagine the number of lawsuits Ontario might face if it is determined the province illegally handed out licenses to all these companies, collectively costing them millions, if not billions of dollars.
I’ve no doubt other provinces have been eagerly eyeing Ontario’s instant success. British Columbia, Manitoba, Quebec – certainly they are considering following in Ontario’s footsteps. Up until Monday morning, it seemed all-but inevitable that they would, sooner or later. Obviously, that won’t be an option if Ontario is forced to roll back operations.
An Alternative Route to Complacency?
There is, of course, one more way Ontario might be able to appease the Mohawk Council of Kahnawake. That would be to offset revenue losses of the indigenous Canadian iGaming regulator by distributing a portion of its own profits to the tribal territory. Considering how often high-profile cases settle out of court these days, it would come as no surprise to this author if that’s exactly what happens. It likely rests upon the recommendation of Ontario’s legal eagles.