In late November 2007, the media reported that Cyber World Group (CWG) had pled guilty to charges of illegal gambling in Québec and had been ordered to pay a $2-million fine. The gaming giant administers GoldenPalace.com, one of the largest Internet casinos in the world.
McCarthy Tétrault Notes:
It is important to note that CWG's conviction of illegal gambling resulted from a guilty plea. Police and court records suggest that the Crown and the company agreed to the payment of a fine rather than going to trial.
Though it is difficult to find information concerning the operation of the Golden Palace gaming site, it appears that the operator uses servers and call rooms located on the Kahnawake Mohawk reserve and that the site is licensed by the Kahnawake Gaming Commission.
If no activity related to the gaming website takes place anywhere in Canada other than Kahnawake, a criminal trial would have raised a number of highly political issues about the status of Kahnawake as an independent nation and its right to host and license gaming websites.
Under the Criminal Code, only provincial governments are authorized to license gaming activities in Canada. However, the Mohawks assert a right to issue gaming licences under Sec. 35 of the Constitution Act. To date, their authority to do so has never been settled in court.
The court would also have had to deal with a significant number of major legal issues concerning the nature of online gaming. For example, it would be necessary for the Crown to prove that allowing Canadians to gamble in an online casino that is (arguably) operated entirely outside of Canada constitutes a criminal activity.
It appears that neither party was sufficiently sure of its position on any of these issues to risk going to trial. Apparently, the simpler and more effective approach was to agree to a relatively large fine. That way, the Crown did not have to prove its case, and the company's executives were spared possible jail terms.
It is also probable that CWG agreed to close its office in St. Laurent and move entirely offshore, removing the problem entirely from the purview of the Québec authorities. To date, Golden Palace continues to permit Canadians to gamble on its website.
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