Magic Palace must wait, court says

The Court of Appeal of Quebec has refused to reconsider the Superior Court’s denial of an interlocutory injunction that could have put Magic Palace on the path to reopening while its lawsuit against the Mohawk Council of Kahnawake (MCK) unfolds.

Despite the setback, Magic Palace’s pursuit of $220 million in damages and a restoration of the gaming facility’s royalty agreement with the MCK is still before the courts.

“This interim decision does not alter our position on the merits,” said the owners of Magic Palace, Barry Alfred and Stanley Myiow, in a short statement to The Eastern Door. “We remain firmly committed to advancing this case and pursuing all available remedies, including our full claim for damages at trial.”

Magic Palace had asked the courts to immediately restore its royalty agreement with the MCK, a prerequisite for the operation of lucrative electronic gaming devices (EGDs) on the territory, while the legal process plays out. This would have enabled it to seek a show cause hearing from the community’s gaming regulator, the Kahnawake Gaming Commission (KGC), where it could have asked that its license be reinstated.

Magic Palace has argued the MCK’s cancellation of its royalty agreement after the KGC suspended its license, which in turn caused KGC to announce the license had been invalidated altogether, deprived the business of due process because it was left with no venue in which to appeal the decision.

The shuttering of the facility in March 2024 came several months after allegations were first made in La Presse that the business had been infiltrated by organized crime. That article focused heavily on court records pertaining to Luftar Hysa, an Albanian who at the time held a “key person license” for the business through the KGC.

In its refusal to reopen the request for an interlocutory injunction, the Court of Appeal noted that leave to appeal such rulings is to be granted only sparingly, due to the temporary nature of the relief sought.

“Consequently, such applications are granted only in exceptional circumstances and the threshold for appellate intervention is high,” wrote judge Judith Harvie for the Court of Appeal of Quebec.

To meet this bar, Harvie noted, the appeal must not just have a good chance of success, but the decision being challenged must “contain apparent weaknesses” and cause “irremediable harm,” among other requirements.

“The applicants have not convinced me that they meet the criteria for obtaining the leave requested,” wrote Harvie, who went on to opine that in the original decision not to grant an interlocutory injunction, Superior Court judge Antoine Aylwin properly identified the considerations involved and provided detailed justifications on each point.

“It would be against the interests of justice to grant leave as the issues raised do not warrant the Court’s attention,” Harvie concluded. “In fact, being mindful of proportionality, the efforts of the parties are far better served by setting the matter down for hearing on the merits.”

Significant to the lower court’s ruling had been Aylwin’s reasoning that Hysa’s investment in Magic Palace effectively made him an owner, which Magic Palace has denied. Such an arrangement would have constituted a “significant breach” of the trust relationship on which the royalty agreement is based, Aylwin suggested.

In a press release this week, the MCK informed community members of the Appeal Court’s decision, dated February 20, not to grant leave to appeal.

The closure of Magic Palace, the gaming business claims, did not only scuttle the existing business, but also torpedoed plans for a major expansion into a luxury entertainment complex that had been projected to bring in $1.6 billion in revenues in its first eight years.

Until it was forced to close, Magic Palace was one of just two facilities in Kahnawake that was allowed to host EGDs.

There is currently no date set for a trial in Magic Palace’s lawsuit for $220 million in damages and the resumption of the royalty agreement.

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Marcus Bankuti, Local Journalism Initiative Reporter