ARTICLES ...

Internet Gaming Regulation: The Kahnawake Experience
by Frank Catania

I. Introduction

In late winter 1999, shortly after my resignation as Director of the New Jersey Division of Gaming Enforcement (NJDGE), the Mohawks of the Kahnawake Territory approached me to assist them with the development of regulations for Internet gaming.The idea of regulated Internet gaming from a location in North America intrigued me, as most discussion regarding Internet gaming regulation was taking place in Australia[1] and various nations throughout the Caribbean.[2]

My first introduction to Internet gaming occurred a few years previous while serving with the NJDGE.[3] Like many other gaming regulators, I had numerous concerns about this new and expanding form of gaming.Nevertheless, after careful consideration, I was convinced that a philosophy of strict regulation would provide a far better solution to my concerns than attempts at prohibition.In the end, I decided that the development of regulations for Internet gaming in theKahnawake Territory was a challenge worth pursuing.But, before agreeing to work on these regulations it was important for me to gather information about the Kahnawake Mohawks, the tribal government, and their position as a sovereign government within the Province of Quebec .

Because the tradition and workings of the Kahnawake Mohawk government were an important consideration for me, I will briefly summarize the history of the Kahnawake Mohawks and their status within Canada before discussing the regulations and my opinions regarding well-regulated Internet gaming.

II. The Kahnawake Mohawks

Kahnawake is a Mohawk Territory just across the St. Lawrence River fromMontreal .[4] It has approximately 7500 inhabitants and is governed by the elected Mohawk Council.[5] Kahnawake has its own police force, court, schools, hospital, fire department, and social services.[6] All of these services and others are funded, operated, and controlled, either directly or indirectly, by the Mohawk Council.[7]

In July 1994, a hotly contested referendum for a land-based casino was defeated by a slim margin.[8] Despite this defeat, the Mohawk Council established the Kahnawake Gaming Commission (KGC) in 1996.[9] The KGC’s main purpose was to effectively regulate all gaming activities in the Territory.[10] Therefore, when the Mohawks began to consider the Internet gaming idea, they gave the KGC the task of promulgating the necessary regulations.

The KGC is composed of three part-time commissioners, all Mohawks.[11] One commissioner serves as chairperson.[12] The KGC has a director that oversees the commission’s daily operations, legal counsel, and support staff.[13] The KGC enforces and applies the regulations with limited resources by using independent contractors to perform various duties, such as background and probity investigations of all applicants.[14] The objective of the Mohawks has always been to regulate Internet gaming in the same manner as traditional "brick and mortar" casino jurisdictions.[15] This was an important consideration for me as it proved that the Kahnawake Mohawk leadership and I shared a similar underlying opinion–for Internet gaming to be successful, it would require the same strict regulation as traditional casinos.

A. Indian Sovereignty and Canadian Law

Under Canada’s Constitution Act of 1867, the federal government is assigned the power to legislate with respect to "Indians, and lands reserved for the Indians."[16] The Indian Act purports to establish a regulatory scheme for all matters related to aboriginal peoples in Canada.[17] Although it still exists, the Indian Act is in the process of being abolished and replaced with "government to government" agreements between Canada and aboriginal "First Nations."[18] This process began with an amendment to the Canadian Constitution Actin 1982, which states, "The existing aboriginal and treaty rights of the aboriginal peoples of Canada are hereby recognized and affirmed."[19]

The Canadian federal government acknowledged the right to self-government.[20] The federal government’s approach has been to discuss and reach practical, workable agreements with regard to self-government, rather than to try and define self-government in abstract terms.[21] This process has been followed and discussions are held on a regular basis between the governments of Canada, Quebec, and Kahnawake.[22] These discussions include Internet gaming, and, contrary to some published reports,[23] neither the federal government nor the government of Quebec is contemplating any imminent action that would disrupt Internet gaming currently originating from the Kahnawake Internet service site.[24] In fact, since the establishment of the Kahnawake Peacekeepers–resulting from the Tripartite Policing Agreement in 1995, when the Kahnawake Peacekeepers became the primary police force in the Territory–there has never been a time when another law enforcement agency has entered into the Kahnawake Territory without an invitation from the Kahnawake Peacekeepers.[25]

The Mohawks have always asserted their sovereignty and jurisdiction in theKahnawake Territory .They have neither been defeated in battle, nor have they ever waived or forfeited any of their sovereignty in a treaty with any government.[26] The Mohawks are proud of their history and let it be known to the world.[27]

B. The Creation of Mohawk Internet Technologies (MIT)

To own property or to form a business in Kahnawake the principal owners must be Mohawks; no foreign companies can be established in the Territory.[28] Therefore, the Mohawk Council established a wholly-owned company, known as Mohawk Internet Technologies (MIT), for the operation of its Internet business in Kahnawake.[29] MIT was responsible for developing the infrastructure necessary to host all Internet businesses, including gaming sites, with the proceeds flowing to the Mohawks through MIT.[30] MIT, its officers, directors, and key personnel[31] are required to be licensed, as would individual gaming operators.[32] The company’s responsibility focuses on the overall operation of a server farm;[33] it is not involved in any operations of gaming sites.

Again, the KGC believed that the only way to regulate Internet gaming was with the same strict regulations established for traditional casinos in jurisdictions throughout the world.The regulations had to possess four qualities:comprehensive, to address the same issues as those facing traditional casino regulators; enforceable, to offer important protections to players; responsible, to assure that games are fair and honest; and capable of creatingreputable operators, to ensure that players would be paid their winnings.The KGC members, Chairman Arnold Goodleaf, Chief Lindsay LeBorgne, Allan Goodleaf, attorney Murray Marshall, and I worked diligently to prepare a set of interactive gaming regulations that would be at least as effective as those used in other gaming jurisdictions.

The Mohawks’ concept was unique.MIT would build the site and rent space to Internet gaming operators for a monthly fee.[34] The KGC would be responsible for licensing all those involved in the Internet gaming portion of their Internet enterprises, including MIT.[35] There would be no substitute for the requirement to submit to a suitability investigation.Nevertheless, a limited investigation is allowed if a company or person is currently licensed in a legitimate gaming jurisdiction because that company or person has already demonstrated the character, honesty, and integrity to be involved in gaming.[36]

The server site established by MIT is situated in an old mattress factory that is within a few hundred yards of two major fiber optic trunk lines that run through theKahnawake Territory .[37] Today, this server farm is one of the most technologically-advanced Internet gaming server farms in the world.[38]

III.The Kahnawake Regulations Concerning Interactive Gambling

A. The Kahnawake Advantage:Regulation and Licensing

Although the draft Kahnawake regulations were based on the interactive gaming regulations used in Queensland, Australia,[39] the structures differed.[40] Part I of the Regulations Concerning Interactive Gaming (KGC Regulations) specifically gives authority to the KGC to adopt and enforce their own regulations[41] and also states that the adopted regulations are not dependent on ratification by any other jurisdiction or regulatory body.[42] This language was an important acknowledgement of the Kahnawake Mohawk tradition of sovereignty.In addition, an important part of any Internet gaming regulation is the prohibition of all Internet gaming not licensed under those regulations.The Mohawks were aware that legalizing Internet gaming in the Territory, without a prohibition against non-licensed Internet gaming sites, could result in other groups attempting to establish Internet gaming sites within theKahnawake Territory .

The KGC also recognized that its regulatory scheme would be scrutinized by the world; it did not want to acquire the same negative reputation as several other Internet gaming jurisdictions, particularly the reputation of some loosely regulated jurisdictions in Central America and the Caribbean.[43] This intent is made clear in Part I of the KGC Regulations concerning economic development and player protection.[44] Thus, the games provided by the licensees must be fair and honest, winners have to be paid promptly, and player account information must be held in the strictest confidence.[45]

B. Licensing Requirements

The KGC Regulations provide for two basic licenses[46] other than individual licenses for key persons:an Interactive Gaming License[47] and a Client Provider Authorization.[48] The Interactive Gaming License is the license held by MIT and it is not likely that any other Interactive Gaming Licenses will be issued.While the regulations do not set a limit on the number of Interactive Gaming Licenses, the requirement that they be established in Kahnawake limits licenses to only Mohawk companies.[49] A non-Mohawk can neither establish a business nor own any property in Kahnawake.Therefore, only a Kahnawake Mohawk with the resources to establish a company and build a facility within the territory could apply for a Gaming License.[50] A Gaming License applicant would additionally need to prove to the KGC that he or she possesses the qualifications to be issued an Interactive Gaming License.The drafters of the KGC Regulations provided the regulatory structure for the potential issuance of other Interactive Gaming Licenses, yet they knew the likelihood of another successful application for this kind of license was almost non-existent.

The other kind of license is the Client Provider Authorization.An Internet gaming company that wants to do business from Kahnawake must reach an agreement with MIT as to the terms and conditions of its operation and the amount to be paid for use of MIT’s facility.Once a company reaches an operation agreement with MIT, the company must then apply to the KGC for a Client Provider Authorization.[51] However, the agreement with MIT does not take effect until the license is granted by the KGC.[52]

License fees are currently CAN $10,000 per annum,[53] with an additional CAN $5000 placed on deposit with the KGC to cover the cost of the license investigation.[54] If the investigation is complex and involves more time, then costs can increase.[55] On the other hand, an applicant already licensed in a gaming jurisdiction that conducts an investigation comparable to that done by the KGC can be accepted after a cursory investigation of the applicant’s current status in the jurisdictions where licensed.[56]

The KGC employs an outside firm with extensive investigatory background and experience in the gaming industry to conduct the suitability investigations.To date, this procedure has been very successful and has provided the KGC with the proper facts to make an informed decision whether to grant or deny an applicant’s license.The CAN $10,000 annual license fee collected from the Interactive License Holder and the Client Service Providers is the only revenue source for the KGC, from which it must pay all of its operating expenses.[57]

C. Who Must Be Licensed and How to Qualify

All company applicants must file a Business Entity Information Form.[58] The company, as well as all partners, directors, shareholders with equity of ten percent or more, the chief executive officer, board members, and key employees,[59] must complete an application and provide the information requested therein.[60] Again, this requirement is very similar to the requirements for the traditional casino industry, and indicates the desire of the Mohawks to regulate in the same manner as any other small gaming jurisdiction.

The KGC only grants licenses when it is satisfied that the applicant possesses the good character, honesty, and integrity, which the KGC considers necessary for holding a gaming license in Kahnawake.[61] This is the same standard applied to gaming license applicants in states such as New Jersey, Nevada, and Michigan.[62] To sustain its credibility, the KGC will not entertain the license application of anyone that does not possess any of the above requirements or has the propensity to associate with known criminals or persons of questionable character.[63]

In addition to honesty, integrity, and good character, applicants must have the financial ability and technical capacity to operate an Internet gaming site.[64] The information provided on the application, as well as the results of the independent agency’s investigation, must provide evidence of the applicant’s ability to operate and manage a successful Internet gaming business.[65] Once the KGC accumulates all of the data, it makes one of three decisions:grant a license, deny a license, or request additional information determined necessary to make an informed decision.[66] This power provides the KGC with the latitude necessary to handle out of the ordinary applications.

The KGC’s duty to determine license applicants’ suitability is complex and of utmost importance; it is this process that excludes those not qualified to be part of the Internet industry and protects the public, as well as the entire Kahnawake Internet gaming industry.In some cases, the regulations provide for issuance of a temporary license when the KGC is satisfied that the applicant appears suitable and is likely to be issued a permanent license.[67] Thereafter, the KGC is not obligated to issue a permanent license if, during the course of the applicant’s investigation, issuance does not appear justified.[68]

D. License Renewals

Licenses are normally issued for a period not to exceed two years.[69] During the license period, it is the licensee’s responsibility to inform the KGC of any new circumstances, such as large stock transfers, complaints filed in other jurisdictions against the licensee or any of the company’s licensed employees, or any circumstance that could potentially affect the licensing of that entity or person.[70] Failure to report such a change in circumstances could result in the KGC taking punitive action against the licensee, including license revocation.[71]

Three months prior to the expiration of a license, the licensee must submit a renewal application to the KGC with the appropriate fees to cover the cost of updating the initial suitability investigation.[72] The original license does not automatically qualify a licensee for renewal.Rather, the renewal application is scrutinized in the same manner as the original application.[73] Survival of a well-regulated Internet gaming jurisdiction depends on the demonstration by all licensees of impeccable integrity and the gaming regulators’ reputation for regulations enforcement.

E.Enforcement Authority:License Suspension and Revocation

The KGC Regulations give the KGC the authority to suspend or revoke a license where the license holder has been:1) deemed no longer suitable to hold a license; 2) convicted of an offence against the KGC Regulations or the regulations of another gaming jurisdiction; 3) indicted or convicted of a crime the KGC deems affects its ability to hold a license; 4) contravened a term or condition of the Interactive Gaming License or Client Provider Authorization; 5) failed to discharge its financial duties; or 5) declared bankrupt or insolvent, or is compelled to wind-up its business for any reason.[74]

The KGC Regulations provide a "show cause" procedure that the KGC and licensees must follow.[75] Where the public is not in jeopardy, the KGC serves the licensee with written notice containing the proposed action, grounds for the proposed action, facts forming the basis for the proposed action, and proposed suspension period.[76] The KGC Regulations allow the licensee to respond to the KGC and show cause why the proposed action should not be taken.[77] The time within which a licensee must respond is determined by the KGC and is based upon the severity of the alleged infraction.[78] On the other hand, in cases that threaten damage to the public or to the KGC’s reputation, the KGC can impose an immediate suspension or revocation that will remain in effect until the matter is responded to or considered at the "show cause" hearing.[79] In all other cases, the licensee has the ability to first respond in writing within the time set forth in the order.[80]

In addition, if the licensee requests, it may present its case at a "show cause" hearing.[81] At the hearing, the licensee has the opportunity to both respond in writing and present oral testimony regarding the issues raised in the "show cause" order.[82] The KGC will consider the evidence and decide whether the acts or omissions are serious enough to adversely affect the integrity of the games, or are adverse to the public interest.[83] The KGC’s decision may include an amendment, suspension, or revocation of the licensee’s license.[84]

F. Control Systems and Approved Equipment

Control system requirements have been part of the KGC Regulations since their adoption on July 8, 1999 .These provisions give the KGC authority to establish rules and procedures to detect and prevent suspicious activities such as money laundering.[85] The KGC Regulations require the licensees to know their customers and to report suspicious activities to the KGC or an appropriate law enforcement agency.[86] A description of the control systems must be submitted to the KGC.It must describe the computer software used to conduct the interactive games, explain the accounting system and procedures, and include a chart of accounts and administrative systems and procedures.[87] The control systems must also include operational standards for maintenance, security, storage and transportation of equipment used for the interactive games, and procedures for paying winnings and maintaining facilities.[88] The KGC examines the control systems and either approves them or recommends changes necessary to gain approval.[89]

The KGC must approve all equipment and software the licensee uses.[90] The KGC is currently considering revisiting this area to allow for implementation of a set of technical standards that can be used by independent testing companies for the purpose of testing licensee systems and software.[91] Under this new program, the KGC will provide the technical standards to which all gaming software must conform.The licensee must then submit a certification from an accredited testing lab indicating that the software met these standards.The licensee will be required to submit any proposed software modifications that affect the random number generator or the outcome of the game, but will not be required to submit certifications when only the graphic portion of the gaming software is changed.The costs will continue to be borne by the licensee and not by the Commission.

G. Player Protections and Age Requirements

The KGC Regulations place an emphasis on player protections and the duty of the KGC to uphold these protections.One protection includes the requirement that all authorized client providers provide games that are not obscene, indecent, or offensive.[92] The KGC is adamant with regard to this provision and will not tolerate any obscenity on any of their licensees’ sites.In fact, the KGC has the right to deny a license to an applicant that has obscene, indecent, or offensive sites, even if those sites are not related to gaming.[93] The KGC even requires that the licensee have controls in place to restrict players’ attempts to use obscene, indecent, or offensive screen names.[94]

Also for the player’s protection, licensees cannot register a player unless that person produces evidence of identity, place of residence, and age.[95] A player’s account is only accessible by that particular player, and he or she may only do so to obtain the balance or to withdraw funds paid into the account. [96] A player cannot play without sufficient funds in his account and must comply with all rules of the game being played.[97] The original KGC Regulations required a player to be at least twenty-one years old to participate.[98] However, a 2001 amendment reduced the minimum age to eighteen in conformance with many of the gaming laws in other parts of the world.[99]

The licensee shall not have access to the player’s account, except to debit the account, and shall remit funds to the player by check no later than the first business day after requested by the player.[100] License holders or client service providers can only access the account when the account shows no activity for more than ninety days.[101] If the account is dormant for a period of ninety days, the balance of the funds in the account must be returned to the player.If the whereabouts of the player are unknown, the funds must be transmitted to a special account established by the KGC for this purpose.[102] Another important player protection is the requirement that the licensee keep the names of all its players in confidence.[103] Exceptions to this regulation include a player’s authorization necessary for the conduct of the games and administration and enforcement of the KGC Regulations.[104]

The KGC Regulations also include an innovative feature that allows players to exclude themselves from play.[105] Once a player registers to be excluded, the exclusion cannot be changed without a cooling off period of seven days.[106] Furthermore, the KGC Regulations provide a player’s family the right to seek an exclusion by application to the KGC.[107] The player is provided an opportunity to respond.The KGC bases its decision on the family’s application and the player’s response.[108] A gaming addiction fund was also established in the territory, with all fines and monetary penaltiesdeposited therein, along with any contributions made by licensees.[109]

H.Compliance Requirements: Records, Audits, and Money Laundering

Another area of Kahnawake gaming regulation that is similar to traditional casino regulation includes rules regarding records, record storage, accounting, auditing controls, and money laundering.[110] The KGC can request any and all records of the licensee without showing cause.[111] An unresponsive licensee is subject to fines, suspension, or revocation of its license.[112] Certain gaming records designated by the KGC must be kept in an approved place and not destroyed for a period of five years from the time of the gaming transaction.[113] Accounts must be kept in the form of generally accepted accounting principles and must be available to the Commission at all times.[114] Audits should be completed as soon as practical after the end of the licensee’s fiscal year, but in no event later than three months after the close of their fiscal year.[115]

The KGC is currently reviewing proposed amendments that would require licensees to know their clients.[116] Contrary to common belief, it is not easy for a player to launder money obtained by illegal means through an Internet gaming site.[117] Most transactions are by credit card when the player signs on or registers to play.[118] While players have the ability to wire funds, these funds are easily traceable and sending large amounts of cash is not feasible.The only party with means to launder money obtained through illegal activity is the licensee; however, money laundering by licensed casino owners is almost non-existent in a well-regulated environment where all licensees must be found suitable after an extensive background investigation.

IV.Conclusion

Internet gaming is a relatively new challenge for gaming regulators and policy makers throughout the world.The Internet has changed the way people go about their daily lives, and with this change comes the difficulty of adopting laws, rules, and regulations to meet new challenges.The Mohawks have established a regulatory scheme to protect people that participate in gaming entertainment over the Internet.This protection is achieved by assuring players that operators licensed by the KGC have passed a strict suitability investigation, including a financial check to assure that the operator has the resources to pay winning bets, and a technology check to ensure that the games are fair and honest.

The Kahnawake Mohawks have taken the lead regulating Internet gaming.The reality is that Internet gaming exists and continues to grow in popularity; the only way to monitor and control this new form of gaming is through strict regulation.Of course, there will be those who continue to seek prohibition of Internet gambling based on a belief that gambling is immoral or has adverse consequences on the moral fiber of society.This ongoing debate raises a fundamental question about the role of government–whether the state should protect the individual from himself by minimizing temptations.My only response to those who hold this position is that government-enforced morality has a consistent record of failure, as evidenced by our past failures.[119]

Internet gaming regulation will do far more to restrict the social ills that accompany problem gaming than will any attempt at prohibition.Moreover, unlike prohibition, strict regulation can work.The question to consider is not whether we will have on-line gaming–we already do, and it will continue unless we ban the Internet itself.Rather, the question is whether we should have well-regulated, on-line gaming or unregulated, underground, on-line gaming.To this end, the Kahnawake Mohawks have taken the lead, and I believe it is only a matter of time before others follow.

[1] See Melanie Beeby, Gaming Set For An Online Revolution, Austl. Fin. Rev., Jan. 8, 2000 , at 16, available at 2000 WL 3974758.

[2] See Joseph M. Kelly, Internet Gambling Law, 26 Wm. Mitchell L. Rev. 117, 124-31 (2000) (describing efforts to regulate and license Internet gaming in various Caribbean jurisdictions).

[3] This introduction occurred at the International Association of Gaming Regulators conference in Puerto Rico where I was a panel member discussing Internet gaming.

[4] See, e.g.,Mohawk Council of Kahnawake, Map of Kahnawake, at http://www.kahnawake.com/tourism/kahnawake.htm (last visited Feb. 7, 2002 ).

[5] The Mohawk Council is elected every two years and consists of one Grand Chief and eleven Chiefs; all Council members are full-time legislators. Mohawk Council of Kahnawake, Grand Chief and Council, at http://www.kahnawake.com/council/chiefs/index.htm (last visited Feb. 7, 2002 ).

[6] See Mohawk Council of Kahnawake, Mohawk Council of Kahnawake, at http://www.kahnawake.com/council/index.htm (last visited Feb. 7, 2002 ).

[7] Council oversight is implemented through a number of agencies that are accountable to the Mohawk Council.Id.The schools and hospital are under control of separate boards; however, the Council appoints the boards.

[8] The casino proposal was defeated 724 votes to 627.Kahnawake Casino Issue Over, Re-elected Chief Says, Toronto Star, July 4, 1994, at A4, available at 1994 WL 7974843.

[9] The Kahnawake Gaming Commission was established on June 10, 1996 , pursuant to the provisions of the Kahnawake Gaming Law, MCR No. 26/1996-97.Kahnawake Gaming Commission, The Commission, at http://www.kahnawake.com/gamingcommission/ (last visited Feb. 7, 2002 ).

[10] The goal of lawful regulation and control is expressed in the Kahnawake Gaming Commission Regulations.Kahnawake Gaming Commission, Regulations Concerning Interactive Gaming § 4 (1999), available at http://www.kahnawake.com/gamingcommission/ (select "Kahnawake Regulations Concerning Internet Gaming") (last visited Mar. 2, 2002 ) [hereinafter KGC Regs.].

[11] At the time this piece was written, the three commissioners were Alan Goodleaf, Lindsay Leborgne, and Iris Rice.The Mohawk Council of Kahnawake appoints the commissioners.Kahnawake Gaming Commission, The Commission, at http://www.kahnawake.com/gamingcommission/ (last visited Mar. 2, 2002 ).

[12] Appointment of the KGC Chairperson is done by the KGC internally.Alan Goodleaf was appointed in August 2001.

[13] Chuck Barnett is the first and current "Administrator" to the KGC.Generally, the Administrator is responsible for assisting the KGC in the various aspects of its operations:processing applications, fielding complaints, and ensuring fees are paid.

[14] TheNationalFraud Center , a subsidiary of Lexis-Nexis, conducts the background investigations for the KGC.

[15] "Brick and mortar" casinos are casinos that have a physical presence which players visit.

[16] Can. Const. (Constitution Act, 1867) pt. VI (Powers of the Parliament) § 91(24).

[17] Indian Act, R.S.C., ch. I-6 §§ 1-122 (2001) (Can.).

[18] See generally Canada Kahnawake Relations, Canada Kahnawake Relations Information Site, at http://www.kahnawake.com/ckr/default.htm (last visited Mar. 23, 2002 ).Kahnawake has, for the past twelve years, been engaged in discussions with Canada to develop a new relationship that would acknowledge Kahnawake’s jurisdiction in over twenty-five different areas, including gaming.A draft document called the Canada/Kahnawake Umbrella Agreement is presently being vetted in the community of Kahnawake and inOttawa .

[19] Can. Const. (Constitution Act, 1982) pt. II (Rights of the Aboriginal Peoples of Canada, § 35.

[20] Id.

[21] See, e.g., Self Government Agreement Signed for BC Interior Indian Band, Canadian Press Newswire, July 7, 2000, at J1 (reporting signing of agreement between Canadian federal government and the Westbank First Nation); see also Canada Kahnawake Relations, Canada Kahnawake Relations Process:Keypoints, at http://kahnawake.com/ckr/key-elements/CKR%20Process_key.htm (last visited Feb. 7, 2002) (discussing efforts by the Kahnawake Mohawks to establish government-to-government relations with the Canadian federal government).

[22] See, e.g., Making Some Progress in Kahnawake, Toronto Star, Oct. 21, 1998 (regarding inter-governmental negotiations over tobacco taxes and highway intrusion).

[23] Id.

[24] This is from my personal knowledge involvement from having been involved in part of the private meetings that have been taking place.

[25] This has not occurred since June 1988.See John C. Mohawk, Echoes of a Native Revitalization Movement in Recent Indian Law Cases in New York State , 46 Buff. L. Rev. 1061, 1067-69 (1998) (detailing a raid by Quebec police on the Kahnawake territory).

[26] The Canada Kahnawake Relations website provides a brief history of the Mohawks, including their victory over the U.S. Army in the War of 1812.See Canada Kahnawake Relations, History & Culture of the Mohawks of Kahnawake, at (last visited Feb. 7, 2002 ).

[27] Id.

[28] Section 28(1) of the Indian Act provides:

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Subject to subsection (2), a deed, lease, contract, instrument, document or agreement of any kind, whether written or oral, by which a band or a member of a band purports to permit a person other than a member of that band to occupy or use a reserve or to reside or otherwise exercise any

rights on a reserve is void.

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R.S.C., ch. I-6 § 28(1) (2001) (Can.).Section 29 of the Indian Act provides, "Reserve lands are not subject to seizure under legal process."R.S.C., ch. I-6 § 29 (2001) (Can.).

[29] See Mohawk Internet Technologies, Mohawk Internet Technologies . . . Setting the Standard for Co-Location ISPs in the 21st Century, at http://www.mohawk.ca/index.html (last visited Feb. 7, 2002 ) [hereinafter Mohawk Internet Technologies].MIT describes itself as a "professionally managed environment supporting e-business activities world wide."Mohawk Internet Technologies, Key Policies and Procedures, at http://www.mohawk.ca/policies/policiesf.html (last visited Mar. 23, 2002 ).

[30] See Mohawk Internet Technologies,supra note 29 (describing MIT as a "unique business initiative of the Mohawk Council of Kahnawake and its business partners.").

[31] See KGC Regs.,supra note 10, § 7.

[32] Id. §§ 9-14.

[33] The Lycos Tech Glossary defines "server farm" as follows:

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A server farm is a group of networked servers that are housed in one location.A server farm streamlines internal processes by distributing the workload between the individual components of the farm and expedites computing processes by harnessing the power of multiple servers.The farms rely on load-balancing software that accomplishes such tasks as tracking demand for processing power from different machines, prioritizing the tasks and scheduling and rescheduling them depending on priority and demand that users put on the network.When one server in the farm fails, another can step in as a backup.

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Lycos, Lycos Tech Glossary, at http://webopedia.lycos.com/TERM/S/server_farm.html (last visited Mar. 2, 2002 ).

[34] See generally Mohawk Internet Technologies, Services and Capabilities, at http://www.mohawk.ca/services/services.html (last visited Mar. 2, 2002 ).

[35] This included some members of the governing Mohawk Council due to their involvement with MIT.

[36] See KGC Regs., supra note 10, § 32.

[37] The server farm has been described as an "unmarked gray building" and a "two-story fiber-optic jungle" closed to photographers.Marci McDonald, Cybergambling on the Reservation, U.S. News & World Rep., Oct. 16, 2000 , at 46.

[38] The high-tech equipment comprising the server farm cost an estimated USD $2.5 million.Id.

[39] Interactive Gambling (Player Protection) Regulation 1998, No. 286 (Queensl. Stat.).

[40] Kahnawake has one centralized location operated by MIT, while those in Australia could be in different locations.There is no tax in Kahnawake, only a monthly rental fee.

[41] KGC Regs., supra note 10, §§ 1-3.Part I was enacted on July 8, 1999 , pursuant to § 35 of the Kahnawake Gaming Law.Id. pmbl.

[42] Id. § 3.

[43] See, e.g., Kelly, supra note 2, at 128-30 (providing a brief description of the problems arising from inadequate regulation of Internet gaming in Antigua).

[44] See KGC Regs.,supra note 10, §§ 1-5.

[45] Id. § 4.

[46] License application forms can be reviewed online at the Kahnawake Gaming Commission web site and are similar in form and content to applications used by traditional casino jurisdictions.The information provided by the applicant is vital in providing the regulators a starting point to begin their field investigation.See Kahnawake Gaming Commission, Interactive Gaming Regulations, available at http://www.kahnawake.com/gamingcommission/ (select "Form 1") (last visited Mar. 2, 2002 ).

[47] KGC Regs., supra note 10, §§ 9-14.

[48] Id. §§ 15-26.

[49] Id. § 8.

[50] Id.

[51] Id.§§ 15-26.

[52] Id. §§ 22–24.

[53] Id. §§ 182.

[54] Id. §§ 10-11.

[55] Id. § 18.

[56] Id. § 32.

[57] This amount is exclusive of the fees collected for license investigations.

[58] KGC Regs., supra note 10, § 10(a).

[59] "Key person" means a person who:

occupies or acts in a managerial position, or carries out managerial functions, in relation to operations carried out under an Interactive Gaming License or Client Provider Authorization;

(b)     is in a position to control or exercise significant influence over the operations conducted under an Interactive Gaming License or Client Provider Authorization;

(c)     occupies or acts in a position designated in the license holder’s or authorized client provider’s approved control system as a key position;

Subsections (a) and (b) apply to a position only if the position is designated by the Commission by written notice given to the license holder or authorized client provider as a key position.

Subsection (a) applies to functions only if the functions are designated by the Commission by written notice given to the license holder or authorized client provider as key functions.

=ft

Id. § 7.This definition is purposely broad to enable the Commission to declare a person a "key person" requiring licensing.Key persons must file according to the same procedures set forth in the licensing section of the regulations.The application is filed with a non-refundable deposit of CAN $2500 to cover the cost of a suitability investigation.The same procedure is followed as in the licensing of Interactive Gaming Licenses and Client Provider Authorizations.Key licenses are subject to the same amendment, suspension, and revocation actions as set forth above, with the same types of procedures.

[60] Id.§ 10.

[61] Id. § 29(a).

[62] In New Jersey, "[e]ach applicant shall produce such information, documentation and assurances as may be required to establish by clear and convincing evidence the applicant’s good character, honesty and integrity." N.J. Stat. Ann. § 5:12 -84(c) (West 2002).In Nevada, For example:

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Any person who the commission determines is qualified to receive a license, . . . having due consideration for the proper protection of the health, safety, morals, good order and general welfare of the inhabitants of the State of Nevada and the declared policy of this state, may be issued a state gaming license . . . .

=ft

Nev. Rev. Stat. § 463.170(1) (2002).Similarly, Michigan law states that "[i]n determining whether to grant a casino license to an applicant, the board shall also consider . . . [t]he integrity, moral character, and reputation . . . of the applicant." Mich. Comp. Laws Ann. § 432.206(5)(a) (West 2001).

[63] See KGC Regs., supra note 10, §§ 29-30.

[64] Id. § 29(b)-(d).

[65] Id. § 29(e).

[66] Id. § 19.

[67] Id. § 38.

[68] Id. § 40.

[69] Id. § 23.

[70] Id. § 35.

[71] Id. § 37.

[72] Id. §§ 48-50.

[73] Id. § 54.

[74] Id. § 62.

[75] Id. §§ 63-69.

[76] Id. § 63.

[77] Id.

[78] Id. § 64.

[79] Id. § 68.

[80] Id. § 63(e).

[81] Id. § 70.

[82] Id. § 72.

[83] Id. § 73(b).

[84] Id. § 76.

[85] Id. § 111.

[86] Id.

[87] Id. § 116(a).

[88] Id. § 116(c), (d).

[89] Id. § 121.

[90] Id. § 128(a).

[91] The KGC is working with BMM North America, a testing company located inLas Vegas, Nevada, to provide a set of technical standards for all of the games provided; they should be included in the KGC Regulations shortly.

[92] KGC Regs., supra note 10,§§ 4, 142-43.

[93] Id.

[94] Id.§ 142.

[95] Id. § 145.

[96] Id. § 147.

[97] Id. §§ 148–49.

[98] Id. § 145(a)(iii).

[99] See generally I. Nelson Rose, Gambling and the Law:Minimum Legal Age to Place a Bet, at http://www.gamblingandthelaw.com/agechart.html (last visited Feb. 7, 2002 ) (listing the minimum age requirements in various jurisdictions).

[100] Id. §§ 150, 152.

[101] Id. §§ 152-53.

[102] Id. § 153.

[103] KGC Regs., supra note 10, § 154.

[104] Id. § 155.

[105] Id. § 157.

[106] Id. § 159.

[107] Id. § 163(b).

[108] Id. § 164.

[109] Id. § 169.

[110] Id. §§ 209-10.

[111] Id. § 220.

[112] Id. § 26.

[113] Id. § 207.

[114] Id. §§ 209-13.

[115] Id. § 219(a).

[116] The KGC is considering amending the KGC Regulations to deter those trying to launder monies received from illegal means.The policy of "knowing your customer" used in land-based casinos is among the amendments under consideration and will likely be included in the KGC Regulations within a short period of time.

[117] See, e.g., Kristie Lu Stout, Net Casinos Under Scrutiny for Money Laundering, at http://asia.cnn.com/2001/BUSINESS/asia/10/21/hk.ecasinolaundering/ (last visited Feb. 7, 2002 ).

[118] See, e.g.,Internet Gaming Commission, Frequently Asked Questions, at http://www.internetcommission.com/faq.asp (last visited Feb. 7, 2002 ).

[119] Most notably the Volstead Act, 1919, ch. 85, 41 Stat. 305 (repealed 1933), which did little to stop the distribution and consumption of alcohol.See, e.g., Eugene M. Christiansen, Selected Materials On Social, Economic, and Technological Trends,1998 A.L.I. 489."The noble experiment, as it is sometimes called, failed with disastrous consequences."Id. at 504.