September 11, 2006

Mohawk gambling profits at risk

US authorities have arrested major figures in the internet gambling world. The resulting fallout has hit the Mohawks hard, which is a shame, given the amount of native tradition and culture bound up in maintaining computer servers for running internet poker halls.

Turmoil in the world of Internet gambling, with PartyGaming losing 10% of its value:

It wasn't only PartyGaming's stock that took a hit. About $1.5 million U.S. in market value evaporated from online gambling stocks in London after the arrest of Peter Dicks, chairman of Sportingbet, at New York's JFK Airport on Thursday.

It was a similar story of stock-market carnage two months earlier when David Carruthers, then chief executive of BetonSports PLC, was detained at a Texas airport and charged with federal racketeering offences.

Running afoul of the 1961 Wire Act, the arrests have sent a chill through the industry. Assumptions about just where the law applies are in doubt, and with doubt comes some serious flight of capital. It is seriously affecting the Mohawks:

The Mohawks of Kahnawake have had their stock-market debut rained out by storms lashing the Internet gambling world.

The Mohawks own a 40-per-cent stake in a company called Continent 8 Technologies PLC that was supposed to have gone public today on the London Stock Exchange's junior AIM market.

But volatility in online gambling stocks in London, amid fears of a U.S. crackdown on the industry, forced the postponement of the Continent 8 initial public offering until the fall.

Continent 8 has an exclusive agreement with Mohawk Internet Technologies in Kahnawake to offer its hosting services to owners of sites in the fast-growing $12-billion (U.S.) online gambling industry.

The Mohawks have put a lot of eggs in the online gambling basket:

MIT's powerful computer servers have made the Kahnawake reserve one of the world's most popular jurisdictions for hosting online gambling sites. Its 61 customers include the world's top five poker sites and seven of the top 10 online casinos, according to Continent 8's preliminary prospectus, an information document for investors considering buying shares in a stock issue.

Profitability is enhanced by the tax-free status of the reserve. Except that maybe gambling profits aren't tax exempt. More uncertainty:

The Mohawks assert their jurisdiction over gambling but the provincial and federal government maintain only the provinces and territories can operate gambling ventures. Quebec has so far tolerated MIT but a crackdown is listed as a risk factor in Continent 8's prospectus. The document also warns there is a risk that the company might fall under the grasp of the long arm of the Canadian tax authorities.

We're talking about $17.4 million in profit last year. The fight over this is going to make Caledonia look like a hissy fit. The Mohawk Warriors have a lot of money on the line. And this is not just money for the band -- every individual Mohawk stands to lose:

The Kahnawake economic development commission's stake is held in an Isle of Man registered company. Grand Chief Michael Delisle said in May that an essential feature of an IPO would be an allotment for ordinary members of the community.

But Canadian securities regulations make that a sticky proposition and Tobin said the postponement of the IPO will give more time for Kahnawake to figure out how to cut in individual band members.

Now you tell a Mohawk Warrior that because of some provincial law or federal law, his cut of a $17.4 million annual winfall is at risk, and you guess what the reaction is likely to be.

Posted by: Steve Janke at 02:22 PM | Comments (25) | Add Comment
Post contains 600 words, total size 4 kb.

1 Birds of a feather??

Posted by: OMMAG at September 11, 2006 07:18 PM (iv01O)

2 Gambling is so spiritual.....I imagine the Creator told them to do it.

Posted by: anonymous at September 11, 2006 07:56 PM (tyzJl)

3 sweet sweet karma. Aint it a bitch boys?

Posted by: Shere Khan at September 11, 2006 09:32 PM (qkcoi)

4 Careful Steve having a mean on for Mohawks is one thing but the continued mockery of a whole culture's traditions and beliefs may incline some to see you as a racist. Oh but then again you aren't racist right, you just present a different point of view. Sure keep telling yourself that. Anyway I think your ignorant snipes will encourage them further to seek ways to oppress the oppressor.

Posted by: at September 11, 2006 10:34 PM (rp6r3)

5 It's those who insist on using culture to hide criminal enterprises who are making a mockery of that culture. Natives are not taxed, they are not subject to border controls on their border-spanning reserves, they have special rules when it comes to tobacco products and to gaming, and in response they use their tax-free status to undermine non-Native industries, they use their cross-border reserves as conduits for massive smuggling operations, they allow their cigarettes to become the tools of terrorist fund-raising schemes, and they establish ties with organized crime gambling interests. Is it all of them? No, of course not. But when the government (US or Canadian) tries to do something about it, many Native leaders insist that they'd rather have the crime then work with non-Native law-enforcement. Read this if you haven't had the chance to understand just how hard it is to enforce the law when Natives keep insisting that their culture is more important than the law, and is above the law. Equating lawlessness and culture is the true mockery here.

Posted by: Steve Janke at September 12, 2006 07:00 AM (89x6I)

6 This is really for the mohawks reading this site. Connect the dots. The Hizbollah flag flies over Caledonia. Online gaming executives are arrested in the US. An IPO is pulled. Can you plot the trajectory?

Posted by: Shaken at September 12, 2006 11:39 AM (JyC7p)

7 And the Europeon culture are the only ones allowed do these things...why...? Oh wait, I know it's because you invented them! Damn, you got me there.

Posted by: at September 12, 2006 08:20 PM (rp6r3)

8 The Natives have claimed the preemptive right to practice these things. Besides why do you keep bringing up the past, why should I pay for the misdeeds of others, whats the past is the past get over it and move on. Sorry, I did not mean to steal your excuses all things considered, things are even.

Posted by: at September 12, 2006 08:26 PM (rp6r3)

9 So what are you saying? That you don't like gambling or smoking? You still haven't explained how your words are not that of a racist, neo-nazi-con. If anything you have line danced around the subject.

Posted by: at September 12, 2006 08:34 PM (rp6r3)

10 To the last poster: Why are you conflating criminal behavior with racism? Why don't you refute Steve's claims instead with facts if you know them? Why don't you explain how mocking a culture (if that is what you claim Steve is doing...I certainly don't think so)is racism? Is mocking Canadian hockey nuts for idolizing boorish athletes racist? According to your seeming definition it is. The behaviour of the Mohawks at Caledonia is illegal. But just let you or me try this stunt anywhere and we would be arrested without any consideration of our claims.

Posted by: mike s at September 13, 2006 10:36 AM (FyApX)

11 QUESTION FOR STEVE: What portion of the online gambling industry belongs to the Mohawks? What portion belongs to white people? Italiams? Greeks? Black people? etc If you are going to align a group with an activity like this, you'd better give us the complete and BALANCED picture. Otherwise, people might mistake you for a racist! Comment for Mike S: Why don't you go ahead and try it ... assuming you have valid documentation indicating that the land is YOURS!!!!!

Posted by: saga at September 13, 2006 06:02 PM (iKp7h)

12 "But when the government (US or Canadian) tries to do something about it, many Native leaders insist that they'd rather have the crime then work with non-Native law-enforcement." So ... what does that tell you about the ability of our police to establish good relatiuons with them? nil ... kinda hard to change their views on that overnight when for OVER a century police have been chasing and kidnapping their kids and putting them in torture schools! Why can't they just be like us? BECAUSE WE HAVEN'T TREATED THEM JUST LIKE US!!

Posted by: at September 13, 2006 06:09 PM (iKp7h)

13 Janke made a perfect rebuttal above so there is no need for anyone to come to his defense. Personally I resent the fraud and rip-offs that are so numerous where SOME natives are involved. Part of that fraud is the attempt to shelter crime under mask of traditions. Special incentives and non-tax advantages were extnded to the Native community by compassionate Canadian governments. Native abuse of those generous advantages can result in the revokation of all non-tax status on the basis that the debt is now paid in full and all citizens of Canada are equal and subject to the exact same law. The new fairness in society. = TG PS. I have always liked native people who I met over the years. Good natured and easy to smile. There are always some bad guys in every group it seems.

Posted by: TonyGuitar at September 13, 2006 06:11 PM (2GVBQ)

14 What portion of the online gaming belongs to the Natives? How about 100%? Spokespeople for Loto Quebec and Quebec's alcohol, racing and gaming board have been cited as saying they view the casino operation as illegal. Attorneys general in Canada and Quebec have also said it is illegal. But no charges have been laid, and the Kahnawake Gaming Commission's lawyer, Murray Marshall, says no one has contacted the commission about an investigation. He says the commission and the casinos are perfectly legal. "It's the exercise of an aboriginal right that's recognized and protected in the Canadian constitution," he says. No Canadian ISP or hosting company off-reserve would knowingly host a gambling operation. The only other choice is to go offshore. So when it comes to hosting gambling within the borders of Canada, MIT and a few others are the only games in town.

Posted by: Steve Janke at September 13, 2006 07:34 PM (89x6I)

15 Tony I don't know where you are getting your history from but "compassionate Canadian governments extending Natives tax free status" is not only delusional, given the history, it is just plain untrue. Without going into the complete history, it was acknowledged by the settling European nations that natives possessed the right of occupancy, through Natives' negotiations, early Europeans came to the determination and understanding that this also afforded the Natives certain inalienable rights, which, as they evolved, came to include tax free status. Nowadays this right amounts to very little where income tax is concerned as a good deal live and work in cities. A native person on reserve performing the same occupation as you or I or any person off reserve does so at a rate of pay considerably lower. Say they were making $10 to $13 an hour, that same occupation off reserve would result in a rate of pay of $18 to $26 or more and this being for a qualified individual. Of course there are other factors involved but for the same job title and duties the pay isn't comparable even after taxes.

Posted by: at September 13, 2006 11:57 PM (rp6r3)

16 I am open minded and welcome correction when off base. My weakness however, is an inability to confer much weight to someone who is afraid to assume even a screen name. = TG

Posted by: TonyGuitar at September 14, 2006 08:39 PM (2GVBQ)

17 It's only a weakness when you relegate facts to that of a screen name(label) when it has zero to little relativity in accordance to the information presented and the copious amount of examples that can be researched in it's (wages gap) determination. I can see your point if it was hearsay, but citing the info out there it seems to have little relevance in this case. If one feels plausibility is a factor pending omission of a screen name then would "payroll officer" suffice? Or how about "wage researcher"? I can understand your dilemma Tony but only when you can consider the fact that some posters on here and other blogs outright b*llSh*t despite the appearance of a screen name. Then it makes more sense to equate the need for a label, to determine plausibility, when deciding whether to buy... oh say the Trojans or do I just go with the saran wrap.

Posted by: at September 14, 2006 09:47 PM (rp6r3)

18 Having my dilemma understood is calming. I*m impressed that anyone would devote the time. The reasoning presented seems a little circular but polite and enjoyably amusing. Reminds me a little of Jeff from wise proteins. However, the vibe is more likely to be derived of dusted brooms. In any case, the more concrete points are well taken. = TG

Posted by: TonyGuitar at September 15, 2006 03:08 AM (2GVBQ)

19 Saran wrap; is that a trailer park thing? = TG

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