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Mohawk Online ‘coming to end’

Marcus Bankuti The Eastern Door

Rumours have been circulating for months about the future of Mohawk Online Ltd. (MOL), an online gaming company from Kahnawake that has given millions of dollars to the community since 2015, but it was finally publicly confirmed on K1037 Radio Monday that things are about to get very real.

During the Grand Debate, which sees the grand chief candidates for the Mohawk Council of Kahnawake (MCK) together for two hours in a broadcast by K103, The Eastern Door, and Iorì:wase to get a better idea of where they stand on important issues, current MCK grand chief Kahsennenhawe Sky-Deer confirmed the news, along with current MCK chief Cody Diabo.

When asked by MCK grand chief candidate Gina Deer “where does that leave Mohawk Online for the future,” after discussing the pitfalls that come with oppressive Canadian legislation concerning Indigenous gaming, Cody Diabo said “Not in a very good spot.” 

Pushed further, Sky-Deer said, “there is no future,” regarding MOL. “Nope. Because in the last year after the partnership moved in a different direction, and with that major hit, things just started to be on the decline. And it’s definitely not going to continue in the way that it has in the past.” 

When asked specifically if the MOL-Entain agreement is coming to an end, Sky-Deer replied “Pretty much. The writing has been on the wall. We were hoping, like with the legal challenge (vs. Ontario) as well, that things were going to change in terms of our Aboriginal rights argument, (but) like we said, that we lost that argument or that legal challenge,” she said.

“I think we discussed whether or not there was a case for us to appeal, and at this point, I just kind of think it’s run its course, and we’re going to have to look at other opportunities for revenue generation,” said the MCK grand chief. 

The Eastern Door caught up with Dean Montour, former MOL CEO and director, who later became CEO of Mohawk Online Kahnawake (MOK), a subsidiary created to circumvent any potential tax liabilities for the parent company.

“Mohawk Online was very successful, but it turned into a catastrophic failure because of the fact that they (MCK) interfered and intervened to basically make it fail,” he said.

Since 2015, over $39 million had been generated by MOL operations, $23 million of which was declared as dividends to the Mohawk Council to spend for the community. 

MOL operated with an average annual operating budget of $900,000. 

Sports Interaction as a brand had been operating since 1996 and was officially licensed under the Kahnawake Gaming Commission (KGC) in 1998 – one of the first licensed gaming operators in town under the KGC. 

Avid International Ltd., the company that owned the Sports Interaction brand, began their relationship with Mohawk Online Limited when it was created in 2015. 

At that time, “the people who owned Sports Interaction wanted to change from being an operator to becoming business-to-business provider of their services, and Kahnawake was looking at being an online operator. It was a good mix,” said Montour. “It was a good combination to partner at that time.” 

Sports Interaction as a brand continued to operate, but under Avid International Ltd., an entity created for the purpose of partnering with MOL. 

Entain purchased Avid International Ltd. and its intellectual properties, which also included the brand Sports Interaction (SI), for roughly $235 million USD ($300 million CDN) in February 2022.

Entain was already operating the Bwin and PartyPoker brands in Canada and owned 50 percent of BetMGM in the US when it bought Avid Gaming Ltd. from Middlebrook Investments. 

Since the Ontario government’s new gaming legislation was coming into effect on April 4, 2022, which compelled all online gaming companies in the province to register with and pay licensing fees directly to them, MOL was at a crossroads.  

If MOL signed up to register with Ontario, effectively paying tax and revenue share to the province, giving up a certain amount of online sovereignty in the process, MOL would set precedence for potential future provincial dealings.  

Or the other alternative was to allow Entain to do exactly that, obtain a license with Ontario, shutting MOL out of any implications related to taxation, fees, or any kind of dealings directly with Ontario, but MOL would still retain its market share of earnings in that province, which represents roughly 50 percent of revenue. 

A failed MCK court case to be exempt from registering with Ontario complicated matters.  

With Entain operating Sport Interaction in Ontario, it increased operational costs, and with big operators like DraftKings, Bet365, and FanDuel fighting for and receiving more and more of the share – and spending big ad dollars to do it – MOL-Entain had to respond. 

To make matters muddier, with an Ontario gaming license, KGC’s license became, in part, irrelevant for Entain in that province, and it no longer held much weight. 

The result was a prediction that 2023 and 2024, and potentially beyond, would have brought in minimal revenue from gaming, instead forcing Entain to spend more on marketing and advertising in Ontario to try and capture its market share from hungry online gamblers. 

The Mohawk Council did not allow MCK grand chief Sky-Deer to comment due to an ongoing media blackout during the election, but the MCK issued this statement when asked about the future of MOL: 

“Mohawk Online Limited (MOL) currently operates Sports Interaction pursuant to the terms of MCK’s agreements with Entain. However, due to changes in the regulatory environment in the gaming industry beyond Kahnawà:ke’s control, MOL has not generated any revenues from Entain for the community since February 2023,” the statement reads. 

“As a result, MCK is in discussions with its business partners to determine the optimal solution for MOL. Should the nature of MCK’s relationship with Entain change, the community will be informed. These are the only comments we will be making at this time.” 

Sky-Deer said, at the Grand Debate, that along with Ontario’s 2022 gaming regulations, comes Bill S-268, which passed a second reading in the Senate on May 30, 2024, an amendment to the Indian Act that defines gaming on-reserve, but doesn’t go far enough to protect gaming off-reserve. 

“It doesn’t give us the ability to do gaming beyond the community, which is ridiculous because we’ve already been doing it,” she said. “So, we definitely need to push for those amendments in the wording. 

“We met with Senator Tannas, who is the sponsoring senator (of the bill), and other senators in Ottawa, to advocate for modifications to the bill,” said Sky-Deer. 

Giving back

According to Montour, approximately $5.5 million has been donated back to Kahnawake since 2015, to organizations like Karihwanó:ron Mohawk Immersion School and the Ratiwennahní:rats language program, but the biggest was the $5 million donation to the new cultural arts centre building next to Survival School, which will house the new cultural centre, museum, tourism, and theatre. 

“There were a lot of different smaller groups that were community-based, that we were able to help out,” said Montour. “It was always with the intention of enhancing language and culture, sports and youth, and just generally, contributing to the well-being of Kahnawake.”

Mohawk Online also sponsored events like the Winter Wonderland and Kateri Memorial Foundation golf tournament. 

“I was proud of it because we were successful. It created own-source revenue,” he said. “And it was a means, in a way, to be able to not be reliant on federal funding. So, I was proud of it for those reasons.  

But, with Entain pulling out, MOL’s future and its ability to give back does not look good. 

“Council has always said time and time again that the whole idea is to get away from dependency on funding and to create own-source revenue to be truly sovereign and independent. And this was, to me, a big step in that direction,” said Montour.  “If MOL is ending, it’s a shame and unfortunate for the community.  How will MCK replace a significant $39-million own-source revenue stream”? 

Montour’s ambition to give back is in part what sparked the lawsuit he is currently embroiled in, having taken Cody Diabo and the Mohawk Council of Kahnawake to court for defamation and wrongful dismissal. (See updated story on the bottom of the front page.) 

Montour was asked what if MOL found another partner to help run things?  

“Ideally, it would need a new partner,” said Montour.  

“All internet gaming operators need various service providers. B2B (business-to-business) providers for services such as gaming software, IT/developers, payment processing, customer support, risk management/line traders, etc. are required.  

“While it is possible to start separately on your own and to retain those independent B2B partners, the startup costs along with huge marketing costs make it very difficult. It would be beneficial to partner with an existing operator/brand, an existing software provider, platform provider as a turnkey solution,” said Montour. 

“However, the new challenge is how Kahnawake would be able to contribute with a new partner with a diminished internet gaming jurisdiction.”

steveb@easterndoor.com

This article was originally published in print on June 28 in issue 33.26 of The Eastern Door.

Eastern Door Editor/Publisher Steve Bonspiel started his journalism career in January 2003 with The Nation magazine, a newspaper serving the Cree of northern Quebec.
Since that time, he has won numerous regional and national awards for his in-depth, impassioned writing on a wide variety of subjects, including investigative pieces, features, editorials, columns, sports, human interest and hard news.
He has freelanced for the Montreal Gazette, Toronto Star, Windspeaker, Nunatsiaq News, Calgary Herald, Native Peoples Magazine, and other publications.
Among Steve's many awards is the Paul Dumont-Frenette Award for journalist of the year with the Quebec Community Newspapers Association in 2015, and a back-to-back win in 2010/11 in the Canadian Association of Journalists' community category - one of which also garnered TED a short-list selection of the prestigious Michener award.
He was also Quebec Community Newspapers Association president from 2012 to 2019, and continues to strive to build bridges between Native and non-Native communities for a better understanding of each other.

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Eastern Door Editor/Publisher Steve Bonspiel started his journalism career in January 2003 with The Nation magazine, a newspaper serving the Cree of northern Quebec. Since that time, he has won numerous regional and national awards for his in-depth, impassioned writing on a wide variety of subjects, including investigative pieces, features, editorials, columns, sports, human interest and hard news. He has freelanced for the Montreal Gazette, Toronto Star, Windspeaker, Nunatsiaq News, Calgary Herald, Native Peoples Magazine, and other publications. Among Steve's many awards is the Paul Dumont-Frenette Award for journalist of the year with the Quebec Community Newspapers Association in 2015, and a back-to-back win in 2010/11 in the Canadian Association of Journalists' community category - one of which also garnered TED a short-list selection of the prestigious Michener award. He was also Quebec Community Newspapers Association president from 2012 to 2019, and continues to strive to build bridges between Native and non-Native communities for a better understanding of each other.