If you ever travel Route 138 from the island of Montréal in the direction of Châteauguay, you would be forgiven if you missed spotting the world's 3rd largest online gaming jurisdiction. Plaza 138 is a sleepy, run-down strip mall, comprised of weather-board buildings with mostly blackened windows. Recently a new gas station opened in the huge parking lot out front. Apart from the concrete 2 storey building that once housed all of Golden Palace's staff, it is the only sign of life.
Most of the tenants in the plaza are in the business of online gaming, for them, an anonymous and unassuming location is fine by. After all, their passing trade comes via the internet, not the 4 lanes that carry commuters to and from Quebec's largest city week working day.
Kahnawake as a gaming jurisdiction is attractive to many casino and sportsbook operators for many reasons. Mohawk Internet Technologies (MIT) is a first nation’s run company that offers those operators a gaming specialized co-location server park. The availability of a well educated labor pool from nearby Montreal and all the advantages of doing business in North America as opposed to Central America or the Caribbean also stand in Kahnawake's favor. But for many sportsbooks, the fact that their customers could talk to someone with an "American" (Canadian) accent and be re-assured that the company was "right here in Canada" (Kahnawake, Quebec) meant a lot. In fact it was enough for well known sportsbooks such as BetUS.com and SportsInteraction.com to locate in Kahnawake. In total, there are 4 sportsbooks on the Kahnawake Gaming Commission's Permit Holder's list. But that will soon change.
On November 9 of this year the Kahnawake Gaming Commission (KGC) amended certain provisions of its regulations to "prevent its permit holders from conducting betting or wagering by means of voice communication over the telephone or any other device." In fact they went further than this, and specifically targeted sportsbooks in these amendments. The verbiage included conditions that no KGC license holder may (be in the activity of) "Receiving or accepting instructions of any kind in relation to funds held in, or to be deposited to, the player’s account" or "Providing odds, lines or any other information related to a sporting or other event" In fact, these two excerpts describe the exact functions of Customer Service agents and Odds makers that those very sportsbook companies employ. By making these changes, the KGC are effectively serving notice of eviction to Sportsbooks. But why are Sports books targeted in particular? Some believe it is the pressure felt by the KGC after the US recently passed anti online gaming legislation. This new set of provisions is based on existing legislation, i.e. the Interstate Wire Act of 1961. Often called the Federal Wire Act, this is a United States federal law prohibiting the operation of certain types of betting businesses in the United States. This law has been interpreted by the Department of Justice to mean that all online gambling is illegal. U.S. Courts, however, have ruled to the contrary. Many believe that the phrase "in the business of" means only businesses are affected. Some argue that the law only covers sports betting, and not other forms of gambling such as poker. The U.S. Fifth Circuit Court of Appeals has ruled that the Wire Act applies only to sports betting and not other types of online gambling. The Supreme Court is yet to rule on the meaning of the Federal Wire Act as it pertains to online gambling.
Forced relocation for any company never comes a good time. For BetUS and Sports Interaction this is particularly inconvenient. Both invested in buildings in Kahnawake, some of the few operators that did. BetUS has redundancy with a large part of their operation in Costa Rica. For Sports Interaction however, they must find another new home. They may follow Golden Palace to Panama, where the Online Casino heavyweight recently opened one of the largest call-centers in that country.
For Plaza 138, things will become a little sleepier.
