A CAD $220.5 million lawsuit launched by two proprietors of the Magic Palace casino in Montreal against the Mohawk Council of Kahnawake (MCK) and its Grand Chief concerns more than just the permanent shutdown of a 15-year-old establishment that was producing millions in income and the loss of 168 jobs. It also concerns the "cancellation" of a significant expansion project that the plaintiffs claim was nearing completion, as stated in legal documents and reported by The Eastern Door.
In the legal case, the casino owners, Stanley Myiow and Barry Alfred, assert there was a “distinct neglect” for due process when the casino was closed in March 2024. As per legal documents submitted in Superior Court, the next step involves another hearing where attorneys for each side will establish court dates for the autumn.
In March 2024, the MCK ended a royalty deal with Magic Palace for electronic gaming devices (EGDs), effectively ending the operator's license with the Kahnawake Gaming Commission (KGC). This came after an RCMP investigation and media reports concerning claims that an Albanian investor was utilizing the casino to launder money for a Mexican cartel.
A representative for the two casino proprietors informed Casino.org that they believe the MCK and the KGC, as business entities, were not adhering to the regulations they were all obligated to follow, given the sequence of incidents that occurred last year. Following the termination of the royalty agreement, the plaintiffs argue that they were not permitted to formally contest the actions of the opposing party or to defend their position prior to the closure of the casino.
"This course of action is not one we take lightly—it is truly a last resort,” the two men said in a joint statement to Casino.org. “Our goal has always been to find a fair and respectful resolution through open communication. However, new evidence, including crucial admissions, now reveals that the KGC’s/MCK’s actions were based on false claims and a clear disregard for due process. These revelations speak for themselves; they are thoroughly detailed in public proceedings and expose a pattern of abuse.”
The defendants are the MCK, Grand Chief Cody Diablo, and the KGC.
In the legal filings, the casino proprietors contend that measures were implemented without confirming those allegations against their establishment.
The claimants are requesting CA$220.57 million in compensation. Some of that pertains to a now-abandoned $155 million initiative, which was expected to generate CA$265 million for the community in the future.
The Kahnawake Entertainment Luxury Complex was described as a “high-value expansion initiative in advanced development,” according to the filing.
The plaintiffs stated that the project, intended as a leading destination for gaming, entertainment, and hospitality, featuring a “cutting-edge gaming floor, high-limit and VIP gaming sections, complete hotel services, upscale dining, entertainment facilities, and shopping areas,” was being developed with MCK officials' awareness.
The initiative was expected to yield CA$1.6 billion in income from EGDs and tables between 2026 and 2033, positioning it alongside Playground Poker, its bigger rival. The casino expansion was expected to yield CA$176.5 million in net income during that period.
The legal action alleges that two unidentified MCK Chiefs have direct financial stakes in Playground, prompting concerns about a conflict of interest.
“The Defendants, the MCK and its then-Gaming Portfolio Chief, now Grand Chief, Cody Diabo, invoked ‘overwhelming evidence’ to justify the Termination of Magic Palace” the court filing states.
The complaint states that the claim “falls apart under testimony” and that the sole document examined was a PowerPoint summary, which was neither created nor confirmed by the MCK. The complaint also claims that no court documents or financial information were examined related to the case, and that no plaintiff was ever reached out to.
“The Termination proceeded without investigation, without due diligence, and without process. Public officials branded the Plaintiffs as unsafe and criminally compromised — yet, when pressed, could not point to a single underlying record of substance.”
The lawsuit alleges that Diablo, the Kahnawake chief in charge of gaming at that time, utilized the closure to enhance his campaign for the 2024 elections.
“When the MCK-KGC’s combined intervention ultimately came, it was as unilateral and disproportionate as it was sudden. Without prior notice or warning, the Plaintiffs’ 15-year-long operations were abruptly forced to a halt within mere hours. On March 25, 2024, half a dozen armed Peacekeepers appeared unannounced at the Plaintiffs’ premises, ordering them to shut down before the patrons’ bewildered looks,” the court document said.
$12 Million Donated to the Community
A representative from MCK informed Casino.org they wouldn't comment, “since the issue is currently in court.”
In a statement released the day after the facility's closure, MCK indicated that an “investigation uncovered an undisclosed beneficial owner of Magic Palace, who is not from Kahnawake, that exerted substantial control over the establishment and obtained most of the benefits. This violated the conditions of the Royalty Agreement made by Magic Palace and the MCK.
In the lawsuit, the plaintiffs assert they severed connections with the implicated investor in fall 2023 following news reports about the money laundering claims, and that they assisted the authorities.
They further assert that, beginning in 2019, Magic Palace’s EGD payments under the royalty agreement have added over CA$12 million to MCK’s revenue – MCK’s primary private income source.
Magic Palace expanded its staff to more than 100 workers. The property grew from a poker room establishment into a 23K-square-foot venue featuring 400 EGD machines, a high-stakes poker area, and a steakhouse.
“Since becoming the subject of increased public pressure, the KGC and the MCK appear to have taken every measure to prevent the Plaintiffs from challenging the Notices, ultimately ensuring that Magic Palace remains permanently closed,” the court documents said.
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