MCK and Gaming Commission Terminate Magic Palace EGD License

The Mohawk Council of Kahnawà:ke (MCK) says that, effective immediately, it has terminated its Royalty Agreement with Magic Palace for Electronic Gaming Devices (EGDs). The Royalty Agreement was required as a condition to ensure there was a community benefit. The loss of the EGD royalties will cost Kahnawake upwards of $5 million dollars in lost revenue according to Ohén:ton Í:iente ne Ratitsénhaienhs Kahsennenhawe Sky-Deer:

“We kind of knew, in terms of our location, that it’s successful and the fact that we had 2 of them operating and looking at the potential of in the future potentially other permits, we had given direction for the KGC to explore the potential of others. Of course, it went beyond what we had expected in terms of projections in the early stages.”

Following a review of publicly available Court records that revealed that Magic Palace and the adjoining Mirela’s Restaurant were allegedly being used to commit money laundering and other crimes. The KGC commissioned an independent U.S. consulting group with a specialization in gaming audits and investigations to conduct an investigation. Ratitsénhaienhs Cody Diabo:

“KGC will have all the information; it does have to do with anti-money-laundering, regulations, like beefing up what is already there. It would be, how do we enhance those to make sure that nothing gets past at this moment. With any developing industries, or whatnot, you put in what you feel at the time, obviously as time goes on, you maybe notice where there’s lacking in certain things, so how we improve those going forward as a credible jurisdiction as well. Those are things that as we go forward, the community is going to be updated on, like anything through the CDRMP, regulations are posted, sometimes there’s feedback warranted or needed or input that’s needed, so, all that stuff, as we progress through this situation, is definitely going to be communicated to the community.”

The results of the investigation revealed that there was an undisclosed beneficial owner of Magic Palace, who is a non-Kahnawa’kehró:non, who exercised significant degrees of control over the establishment and received the majority of the benefits. This breached the terms of the Royalty Agreement that was entered into by Magic Palace and the MCK. The KGC has since suspended the Operator’s License for Magic Palace as a result of the findings in the investigation. K1037 News has sent requests to Gaming Commission Chair Frank Phillips for an interview and has agreed to come on air during the Tetawathartha, “Party-Line” talk show, this coming Thursday.