September 1st Split Between Kahnawake, Bodog-Associated Brands Confirmed

Following up on Monday’s news of the regulatory deal between the Kahnawake Gaming Commission, the KGC-associated data-center operation, Continent 8, LLC, and the New Jersey Division of Gaming Enforcement, comes the news that the Bodog-associated group of online-gambling brands has already moved from the Kahnawake hub of operations, near Montreal, Canada.

kgcNews of the split between several Bodog-related brands, including the US-facing Bovada (sports betting) and Ignition Casino (online poker) offerings, was very quietly announced by the KGC back on September 2nd.

In an “advisory notice” still available on the KGC’s online portal, the KGC announced the departure of the Bodog-related entities.  The departure was deemed voluntarily but was undoubtedly coerced via DGE pressure.  The heart of that notice:

AUTHORIZATIONS VOLUNTARILY TERMINATED

(MOHAWK TERRITORY OF KAHNAWAKE) – September 2, 2016) Salmon River Technologies Limited (www.bovada.lv) and Lynton Limited (www.cafecasino.lv, www.slots.lv and www.ignitioncasino.eu) have both voluntarily terminated their Client Provider Authorizations pursuant to sections 190 to 193 of the Regulations concerning Interactive Gaming. The voluntary terminations were effective at 12:00 (noon) EST on September 1, 2016 (the “effective date”).

As of the effective date, the Commission no longer licenses or regulates Salmon River Technologies Limited, Lynton Limited or any gaming site operated by either entity. The Commission is not responsible for complaints received after the effective date concerning these entities or the gaming sites they operate.

The timing of the split between the KGC and the Bodog-connected brands, as previously conjectured, also appears connected to the moving of Bovada’s online-poker offerings over to the Ignition Casino site.  That reported sale was announced in late August.

Yesterday’s announcement of the deal between the KGC and DGE triggered a rush of poker-world speculation that the move would mean the end of so-called “grey market” online-poker offerings being available to US players.  That list, apart from the Bodog-related Ignition Casino, would supposedly include Americas Cardroom and several other companies’ sites as well.

Such conjecture is likely wrong, despite being triggered by some reports at other sites, including a breathless and comically inaccurate offering at PokerNews.  What has changed is that the KGC has decided not to do business and offer backbone support to US-facing, grey market sites, but those sites are already moving to service providers in other jurisdictions.

The Bodog brands, including Bovada and Ignition Casino, underwent DNS address changes at the start of September.  That change indicates these sites have already been moved off the Kahnawake reserve.

Neither Bodog nor any of the related brands plans to issue an official statement on the KGC/DGE events.  However, through channels, Flushdraw received unofficial confirmation that the transition has already been made, and no future service outages are expected.  Per an unofficial spokesman, “… [R]egardless of what is going on, Bovada and Ignition plan on continuing to service their players beyond September 30th, and [it] will be business as usual.”

The Kahnawake’s hands were forced by the DGE pressure, as specifically applied against the reserve’s data center, Continent 8.  Unconfirmed rumors suggest that the DGE threatened to remove its licensing of Continent 8 services after other parties informed it of Continent 8’s service, in Canada, to gray-market providers.  Continent 8, as part of the Kahnawake tribal nation, had invested in and opened a new data center in New Jersey in 2014 in anticipation of a burgeoning US online market, and had received conditional operational approval at that time.

The DGE, allegedly, threatened to yank that conditional approval, despite the Kahnawakes’ long claims of sovereign rights regarding tribal gaming.  However, those rights clearly would not transfer from a Canadian tribal reserve to a New Jersey (US) business office, which appears to be why the Kahnawake decided to comply with the DGE’s demands.

Note that though the DGE presser published yesterday specifically mentioned Bovada, the deal with the KGC involves all US-facing brands.  This means that all such sites services via the Montreal portion of Continent 8 are already locating to non-Kahnawake digs.  The KGC/DGE deal, as announced, then, is something of a fait accompli.  Arrangements had already been made between the two regulatory entities to allow those US-facing sites a few weeks to move elsewhere.

The KGC also issued a statement this week about the agreement with the DGE.  In the interest of full disclosure, and because it carries a somewhat different flavor that its DGE counterpart, we present it in its entirety:

Kahnawake Enhances Regulatory Environment
For immediate release

(Mohawk Territory of Kahnawake – 26, Seskehkó:wa/September 2016)
Since 1999, when it became one of the first jurisdictions in the world to license and regulate online gaming, Kahnawà:ke has recognized the necessity of continually evolving its regulatory environment to keep pace with this dynamic industry while ensuring Kahnawà:ke’s jurisdictional reputation and integrity are maintained at the highest levels.

After careful consideration, the Kahnawà:ke Gaming Commission (the “Commission”) has directed that an applicant or existing licensee that accepts players from a US State without being authorized by the US State to do so, is engaged in an activity that adversely affects Kahnawà:ke’s jurisdictional integrity or reputation (the “regulatory directive”). An application from an operator that engages in this activity will be denied. Existing licensees have been advised that, not later than September 30, 2016, they must modify their operations to conform to the Commission’s regulatory directive or their licenses will be terminated.

Kahnawà:ke’s elected governing body, the Mohawk Council of Kahnawà:ke (the “Council”), is fully aware of and supports the Commission’s authority, as empowered through Kahnawà:ke’s law, to issue the regulatory directive. 

Over the past several months, the Commission has established a strong regulatory collaboration with the New Jersey Department of Gaming Enforcement (“DGE”). Building on a foundation of mutual respect and cooperation that was first established in 2014, the Commission values the excellent working relationship it has fostered with the DGE.

“The Council and the Commission have had a direct and productive dialogue with DGE over the past several months,” said Commission Chairman Mark Jocks. “We understand the DGE’s concerns about online gaming sites operating in New Jersey and elsewhere in the US without being properly authorized by a regulatory body in those jurisdictions.”

“The DGE understands and respects Kahnawà:ke’s significant accomplishments in the online gaming industry over the past 17 years—grounded on the exercise of Mohawk jurisdiction,” added Grand Chief Joseph Tokwiro Norton. “We consider the strengthening of our working relationship with the DGE to be a positive development for our respective jurisdictions, and for the online gaming industry.”

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