In the first part of a global series with Fast Offshore, the consultancy firm’s CEO Ron Mendelson discusses the advantages and challenges of obtaining the Kahnawake licence from the Mohawk Council of Kahnawake in Quebec.
The Kahnawake gaming licence is offered by the Kahnawake Gaming Commission from the Kahnawake Mohawk Territory First Nations reserve in Quebec, Canada.
Offered since 1999, the licence enables operators to offer its gaming products in a whole host of geographies in a relatively simple process. As the Kahnawake Gaming Commission boasts a quarter of a century of experience in licensing operators offshore, they are one of the most reputable regulators in Mendelson’s view.
Mendelson told CasinoBeats: “They’re very well organised. They’re very methodical, and they have an intense due diligence process. So, they do a very good job at screening applicants and ensuring applicants are well organised and compliant with whatever regulations that apply to them. They’re quite a flexible regulatory body.”
One of Fast Offshore’s core competencies is to be able to identify each of its clients’ specific context and advise accordingly on which jurisdiction would be best suited to them according to that context.
In the case of the Kahnawake licence, Mendelson advises that a whole range of operators should consider taking up the licence, owing to plenty of benefits that it boasts.
As well as the robust Gaming Commission, Mendelson points towards the fact that the licence is not handed out by a sovereign state, rather a sovereign tribal First Nation as well as tax benefits as key drivers for obtaining such certification.
“We see many international operators taking that licence to fill in gaps in the territories they can target with some of their other licences,” he explained. “You also see international operators use it for managing traffic volumes and from a taxation perspective.
“What makes it attractive to many operators is it’s unlike other licences because it’s not issued by a country, rather it’s issued by a sovereign First Nation under their sovereign rights. I think the reason operators like it is because it’s a little bit different than going and getting an MGA licence. It’s not issued by a federal government, it’s issued by a tribal government.”
Mendelson founded Fast Offshore in 1998 and has amassed a wealth of experience in consulting gaming companies to obtain licences, as well as other ancillary services such as corporate services, regulatory compliance and payments.
Explaining that agility and flexibility are essential for most of the company’s clients across its gaming portfolio, Mendelson outlines that Fast Offshore is an expert in offering practical solutions to compliance problems.
So, how does the firm advise companies seeking a Kahnawake licence?
“We do what we’ve always done with registered companies, we can help our clients set up corporate structures that are appropriate for that licence or really for any licence. It’s a process we’re familiar with. We know the team there, they know us, we know what they’re looking for, we know what they don’t want to see. So we can ensure application packages are prepared properly and in such a way that they’ll be viewed in a favourable light.”
Fast Offshore can also help would-be licensees navigate the complexities of obtaining a Kahnawake licence. Having worked with the Kahnawake Gaming Commission with applications for over two decades, the company is in a prime position to help steer applicants away from saying the wrong thing or hiding information that would deter any positive outcome.
The fact remains that there are significant challenges to getting licensed by any jurisdiction. But Fast Offshore can identify any issues and ensure that any applicant is ready to obtain certification.
“The biggest risk is with new companies, simply because they don’t know what they don’t know – they’re new. So when you approach a regulator, making a comment that maybe isn’t appropriate or that gives them an incorrect impression of the business can alter the outcome of that application.
“I saw a case recently where the applicant wasn’t explaining things correctly, because English wasn’t their first language. They said something that gave the impression that caused concern to the Commission and in the end, the application didn’t go through because of that.”
Mendelson makes sure that all businesses that his company works with are as transparent as possible in the application process. Any hint of suppressing information or creating a sense of haste would deter the Kahnawake Gaming Commission from approving an application.
“The truth is in the regulatory business, anytime you try and make something seem urgent, that’s a huge red flag. Why the urgency? There should be no urgency, so creating this sense of urgency or trying to pressure a regulator or Gaming Commission to give you an approval, that’s a huge red flag.”
One key development in Canada over the last few years has been the opening of the liberalised market in Ontario, which is regulated by the Alcohol and Gaming Commission of Ontario and managed by iGaming Ontario.
The Mohawk Council of Kahnawake’s claim that iGO’s gaming market was illegal under the Criminal Code of Canada was dismissed by a judge. The judge’s ruling came after the First Nation lodged a challenge in November 2022, seven months after the province launched regulated gaming.
Ontario’s market has had an impact on companies wishing to obtain a Kahnawake licence, Mendelson told CasinoBeats, but he ultimately noted that the impact was not huge because operators are looking to use the licence offshore rather than within Canadian borders.
He noted: “Obviously, every time you remove a territory that the licence can be used to serve you, it makes it less attractive. But generally, I’m not sure that Canada is the most profitable market to target. It’s fragmented and complicated so I’m not sure if it really affects the uptake on Kahnawake licences, because I don’t think Canada is the target market for that licence.”
So while the Kahnawake licence has been diminished slightly since April 2022, Mendelson and Fast Offshore assert that it is the only tribal licence in the world that is recommended.
With the firm’s two-decade-plus experience in helping operators get a licence under the jurisdiction, Mendelson concludes with his top tip for aspiring licensees.
“If you want to apply for a Kahnawake licence, you need to be organised. You need to organise all of your R&D testing certificates and you need to have a corporate structure that’s appropriate for applying. We can guide our clients through all of that.
“The Gaming Commission also wants operators that are clean and compliant, fit and proper; who operate with integrity and honesty and treat their players well. If you want a Kahnawake licence, you better make sure that’s what you have because it’s all about creating fair play for the players and operations that have integrity.”
