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
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
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
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