Quebec fines online gambling site

CBC's French-language news service reported on Friday that the company running GoldenPalace.com must pay a $2 million fine after pleading guilty to illegal gaming charges in Quebec.

Cyber World Group, which administers the online casino and poker site through a server located on the Kahnawake Mohawk reserve, pleaded guilty to the charges in September and the sentence was handed out this week.

According to the CBC, the charges against the virtual casino are the first ever in Quebec. The charges raise questions about the Mohawk reserve's authority to hand out gaming licenses.

According to the Criminal Code, only the provincial government is authorized to hand out gaming licenses. Because of this, the Quebec police raided Golden Palace's Montreal-area offices more than a year ago.

The Mohawk community has maintained that under Canada's Constitution, traditional native rights are protected, including those that allow it to provide space on servers to house online casinos.

About 60% of the world's online gambling traffic runs through servers in Kahnawake. Hundreds of betting sites are hosted on servers managed by the Mohawk Internet Technologie and several online casino and poker sites are licensed by the Kahnawake Gaming Commission.

Joe Delaronde, a member of the Kahnawake band council, told CBC that the Mohawk Gaming Commission has already handed out 443 permits without any problems. In fact the territory is recognized as a world leader in Internet gambling.

"You go to any of the publications around the world about this, and Kahnawake is well-respected," Delaronde told CBC. "The only place where there is a question is in [our] backyard."

He says the charges and fines in Quebec are part of a wider jurisdictional battle between the Mohawk community and provincial and federal governments.

Michael Lipton, a Toronto-based lawyer who practices gaming law, told the CBC that the charges and fines could set a precedent for Mohawk-issued gaming licenses and may reflect the government's decreased tolerance for online gaming.

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