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Canuckia gets tough

The controversy in Canada surrounding the expansion of online gambling took another turn this week as the attorney general of Alberta weighed in on the recent attempt by the Alexander First Nation to begin offering the same online gambling services as the Kahnawake tribe in Quebec.

The Kahnawake of Quebec offer a full service online gaming jurisdiction, with hosting as well as a light regulatory touch. Like much of the online gaming industry, it has existed in a strange kind of legal limbo, in which little of its asserted jurisdictional claim has been tested in the courts.

Although a sovereign nation, the Kahnawake still answers to Canadian law on certain matters of criminal law and international trade. The province of Quebec has never tried to assert any sovereignty over the tribe in the area of online gambling, and the tribe's gaming activities continue to flourish, licensing online behemoths such as Bodog. The Alexander First tribe has eyed the developments in Quebec eviously, and is eager to follow suit.

But the Alexander Gaming Commission is still negotiating with a handful of international e-gambling operations for the lease of server space in the band's 25,000-square-foot data centre. No contracts have been inked yet.

The authorities in Alberta have a somewhat different take on the matter, however. The tribe still falls under the Canadian criminal code, and the code forbids gaming operations not licensed by a provincial government.

"I'm not concerned about another Oka (where a standoff with armed Mohawks left one mountie dead). All that concerns me is defending the law," said solicitor general Fred Lindsay. "I understand the band has special rights. But they still fall under the Criminal Code of Canada. I expect them to abide by the law. If they don't, we will do what we have to do. We'll (lay charges). You bet."

Well, not if the jackbooted blue helmets at the UN have their way. In a bizarre twist, the tribe claims to have received a letter of support from the UN on the issue.

According to Online-casinos.com, chief Ray Arcand and the Alexander Council announced in a press release entitled United Nations Declares Support for Alexander First Nations Online Gaming Regulation and Data Hosting Facility receipt of a letter from the United Nations, allegedly supporting the Alexander First Nation's regulation of online gaming and the development of a hosting facility much like the one operated by the Kahnawake in Quebec.

"We are most gratified to receive this support from the United Nations, as we build a safe, secure regulatory environment for people to enjoy online gaming," chief Arcand said, without actually quoting the letter.

"Our goal is to enable citizens of regions where online gambling is allowed, the opportunity to participate in fair, honest play, where they can relax and enjoy themselves, knowing they are well protected by a world-leading regulatory environment. The expression of support from the United Nations is an honour, and makes our whole community proud of our achievements."

How the EC got its balls back

The European Commission last week sent "reasoned opinions" to France, Germany, and Austria regarding their respective failures to open their markets to cross border trade in gaming services, according to a press release from Bwin, one of the interested parties in the case. Bwin has a particular connection with the case, since two of its executives were arrested in Monaco last year by French authorities at a press conference in which they were to announce Bwin's sponsorship of a local soccer team.

Under Article 226 of the Treaty on European Union, a "reasoned opinion" is the second step in infringement proceedings against member states, after what is known as "formal notice" is given. In early 2006, the European Commission initiated such proceedings in seven EU member states following a series of complaints lodged by gaming conglomerates. It followed that up in the fall, when it sent letters of "formal notice" to Germany, France, and Austria.

The "reasoned opinion" could well be the end of the road for prohibitionist holdouts like France. A reasoned opinion of this sort generally leads to a referral to the European Court of Justice, and it's hard to see how the French (or the Germans for that matter) can justify holding on to national casino and horseracing monopolies at the expense of other member states.

Bwin has been in hot water in Germany as well. EU Industry Commissioner Guenter Verheugen wrote to German regional state governments ordering them to change a draft treaty on the betting issue that individual German states cobbled together late last year.

"We asked Germany to reconsider the total ban on lottery and sports betting on the internet. We think a proposed total ban is disproportionate and there are less restrictive measures, such as mandatory prior registration and strict guarantees on identification," the Verhheugen said.

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