Kahnawake Gaming Commission Exits US Market

The Kahnawake Gaming Commission (KGC) has agreed to stop its internet gambling licensees from offering their products in the US, after reaching an understanding with New Jersey Division of Gaming Enforcement (DGE) this week.
The KGC is based on sovereign tribal territory in Quebec, Canada, and has been issuing licensee to gambling sites since 1999, many of whom are US-facing. While many of the companies they do business with operate in the grey market, the KGC’s legitimacy was challenged recently after a bit of investigative journalism by the New York Times revealed that a company closely associated with the KGC had been violating the terms of its New Jersey license.
The data center specialist company in question, Continent 8, had received a transactional waiver from the DGE to provide its services to licensed internet gambling sites in the Garden State. However, the New York Times news report discovered Continent 8 was also providing its service to other unregulated gambling companies operating in the US, representing a clear conflict of interest with the DGE.
Rather than going the legal route, the DGE was subsequently able to persuade the KGC to stop providing licences to companies who contravene US gambling regulations, and existing licensees have now been given until September 30th to comply, or else have their licenses terminated. In an official statement, the KGC said that its was keen to avoid any situations which might adversely affects its “jurisdictional integrity or reputation”, and stated:
“Since 1999, when it became one of the first jurisdictions in the world to license and regulate online gaming, Kahnawake has recognized the necessity of continually evolving its regulatory environment to keep pace with this dynamic industry while ensuring Kahnawake’s jurisdictional reputation and integrity are maintained at the highest levels.”
The agreement reached between the DGE and the KGC has far-reaching consequences, as it applies not just to those companies operating in New Jersey but also in other states across the US. It also demonstrates the DGE’s ability to project power and authority beyond its own state borders.