Magic Palace Casino Owners Suing Mohawk Council of Kahnawake for $220M

^{Kahnawake Grand Chief Cody Diabo (left), seen here in December formalizing an alliance with Quebec Premier Francois Legault (right), was named in a lawsuit alleging Kahnawake regulatory authorities overstepped their bounds in shutting down the Magic Palace casino. (Photo: The Canadian Press / Alamy Live)}

Two owners of the Magic Palace casino in Kahnawake, Quebec are suing the Mohawk Council of Kahnawake (MCK) after the council shut down the facility in March 2024.

The owners argue that the MCK ignored their right to due process when the Kahnawake Gaming Commission (KGC) pulled the Magic Palace’s gaming license after the council revoked the facility’s Electronic Gaming Device license. 

Tribal Officials Cited Alleged Money Laundering at Magic Palace

The lawsuit also targets Grand Chief Cody Diabo, who was the chief responsible for gaming for the Kahnawake at the time of the closure.

According to the lawsuit, the owners are asking for C$220 million ($157.5 million) in damages, which includes the costs of a C$155 million ($111 million) expansion project that the owners – Stanley Myiow and Barry Alfred – say has been cancelled. The owners also say that unless the court intervenes, the Magic Palace like likely be closed permanently.

The closure of the tribal casino came after news reports emerged in 2023 that the Royal Canadian Mounted Police (RCMP) were investigating an Albanian investor named Luftar Hysa, who was under suspicion of using the casino and its adjoining restaurant, Mirela’s, to launder money for a Mexican drug cartel.

That led the KGC to revoke the key person license for Hysa, which he would have needed to perform any operational or managerial functions at the casino. 

But that wasn’t the end of the sanctions against the facility. In March 2024, the MCK terminated its contractual agreement with the Magic Palace, essentially making it impossible for the casino to continue operations. Mirela’s was also closed, but the restaurant was able to reopen days later.

“Following a review of publicly available Court records that revealed that Magic Palace and the adjoining Mirela’s Restaurant were allegedly being used to commit money laundering and other crimes, the KGC commissioned an independent US consulting group with a specialization in gaming audits and investigations to conduct an investigation,” the MCK said on X. “The results of the investigation revealed that there was an undisclosed beneficial owner of Magic Palace…who exercised significant degrees of control over the establishment and received the majority of the benefits. This breached the terms of the Royalty Agreement that was entered into by Magic Palace and the MCK.”

Owners Dispute Record of Albanian Partner

At the time of the closure, Magic Palace lawyer Pierre L’Ecuyer said he was confident that the casino would have its license reinstated. He also argued against the allegations made against Hysa in the MCK statement.

“He’s got no pending charges, he’s got no record anywhere in the world, and he’s never been charged,” L’Ecuyer told reporters. 

There have also been questions over where lawsuits related to the Magic Palace closure should be heard. In January 2025, the KGC filed an appeal in an attempt to take the case out of provincial courts and place it in tribal hands instead as a matter of jurisdiction. 

But L’Ecuyer said there was one major problem with that argument, a snag that forced his clients to take the issue to provincial courts instead.

“Basically, in the by-law made by the Council, it should go to the Administrative Tribunal of Kahnawake,” L’Ecuyer told the Eastern Door. “The problem is it doesn’t exist.”

The Eastern Door – a newspaper covering news in Kahnawake Territory – reported that while the tribe has plans to implement such a tribunal, it was not yet operational as of January.