Regulators Pull License from Magic Palace, Forcing Casino Closure

^{Magic Palace Casino in Kahnawake faces closure after the Gaming Commission revokes its license. (Image: Magic Palace's Instagram)}

The Magic Palace casino in Kahnawake, Canada, closed its doors on Tuesday after losing a license it needed to continue its gaming operations on tribal land. The casino is facing claims that the property and its on-premise restaurant were part of a money laundering operation.

According to the Kahnawake Gaming Commission's release from Monday, the contract between the Mohawk Council of Kahnawake (MCK) and Magic Palace has been terminated. Such a contractual agreement is necessary for an Electronic Gaming Device (EGD) license to be valid, and as such, the decision led to the Commission pulling the license.

“The invalidation of Magic Palace’s EGD Operator’s License overwrites the previously issued suspension of this license, and as such, Magic Palace must permanently close its EGD operations,” KGC wrote in the statement.

MCK Cites Money Laundering Allegations for Closure

In addition, the gaming commission also noted that Magic Palace’s poker room license remains suspended pending further investigation and “Show Cause” proceedings. The closure also impacted Mirela’s Restaurant on the premises of the casino.

Magic Palace also released a statement on its website, though it lacked details as to the reasons for the closure.

“In compliance with local regulations, Magic Palace and Mirela’s Restaurant have temporarily suspended operations,” the statement reads. “Magic Palace and Mirela’s Restaurant express gratitude for the understanding and support of our patrons and the community.”

Mirela’s Restaurant announced on Instagram that it would be able to reopen on March 29. The KGC press release noted that Mirela’s could reopen when the entrance to the casino from the restaurant was blocked.

In its Monday press release, the MCK explained its decision to end its royalty agreement with Magic Palace.

“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 release stated. 

“The results of the investigation revealed that there was an undisclosed beneficial owner of Magic Palace, who is a non-Kahnawa’kehró:non, who exercised significant degrees of control over the establishment and received the majority of the benefits.”

Owners Dispute Charges Against Investor

Lawyer Pierre L’Ecuyer, who represents the owners of Magic Palace, told CTV News Montreal that Kahnawake Peacekeepers arrived at the casino, located on Montreal’s South Shore, on Monday, telling customers to leave and shutting down the venue. 

According to L’Ecuyer, the action is due to false information about Albanian consultant and investor, Luftar Hysa, who lives in Montreal.

“They’ve been there for about a year, and it stems from the fact that Mr. Hysa, who’s an investor, had some allegations made in Mexico, where he has some casinos,” L’Ecuyer told CTV News. “Mr. Hysa has been completely cleared and it was clear that these allegations were made because people in the same business wanted Mr. Hysa out of the business.”

In October, the KGC revoked Hysa’s key person license, which he'd require to perform any managerial or operational duties in a Kahnawake gaming establishment. Magic Palace and Mirela’s then vowed to immediately cut ties with Hysa. At that time, some community members saw the allegations as a sign of the issues plaguing the local gaming market.

“The community voted against a casino for this very reason, because we didn’t want gangsters and organized crime infiltrating our community and gaming operations,” community member Jeremiah Johnson told The Eastern Door last October. “And that’s exactly what happened right under MCK and KGC’s noses.”