AFN: Canada's Second First Nation I-Gaming Jurisdiction

6 November 2006

The Alexander First Nation (AFN), a sovereign nation located in Alberta, Canada, has established a gaming commission and will soon begin offering licenses to qualified I-gaming operators.

The Alexander Gaming Commission (AGC) was formed in March pursuant to the provisions of Alexander First Nation Band Council Resolution 2005.2006.057 and the resulting Alexander Gaming Law.

Following the formation of the commission, AFN established Alexander Internet Technologies (AIT) to develop the technology infrastructure for online gaming in the jurisdiction. In essence, AIT was established to put together the data center and set up Internet access for incoming operators.

Internet technologies company eNation Corporation, which builds and manages data centers to host online businesses, was contracted to provide management and other operational services to AFN and AIT. eNation is nearing completion on a 25,000 square foot co-location data center for AIT, slated to open in December.

Cheryl Giblon, global sales and marketing director for eNation, said the data center, located in Edmonton, is a state-of-the-art facility like nothing the I-gaming industry has seen to date.

"We have the redundant power and generators in case of power failure and peering relationships set up for large bandwidth--10 gigabyte, plus bandwidth available," Giblon said. "If you look at some of the other locations, they've got 310 megabyte they talk about. It's a great advantage to the customers because they get higher bandwidth; they get all the redundancy and it's just too expensive for them to build and manage it in their own smaller operation. And the data center has been built for high-density and grid computing, which is really the latest technology. It's fully scalable, always available and it's only 20 minutes from downtown for a large metropolitan city, so there's good international transportation, access to clean, reliable power and bandwidth and stable climate, both weather and political."

Home to over 300 operators, the Kahnawake Mohawk Nation of Quebec for seven years has been the only first-nation I-gaming jurisdiction in Canada (aside from the Six Nations Band in Ontario, which briefly hosted online gambling sites in 2003). But Giblon said AFN has birthed a new generation of world-leading regulations and is ready to compete.

"They're (Kahnawake) definitely a competitor of ours and a successful business," she said. "But the more the merrier. It's a strong, growing industry. Our regulations are the first of the new batch. Theirs were developed a few years ago, so I can't speak to their approach."

When formulating the regulations, which were enacted on Oct. 10, the AGC looked to other global jurisdictions, including Kahnawake.

"[The lawyers] were first doing searches on what are the problems with the current round of regulations," Giblon said. "These regulations are going to be different from other regulations. They contemplate issues that hadn't been thought of in the early days of online gaming regulations, addressing such areas as operators having more than one game, more than one type of license and multiple URLs. The Alexander Gaming Commission also monitors the integrity of the games; has processes in place to guard against money laundering; protects the vulnerable, including minors; ensures fair play for all and that winners are paid so that people are able to enjoy online gaming in a safe, level playing environment. "

With the recent legislative changes in the United States, AFN is taking care to comply with both U.S. laws as well as Canadian laws, although it is not governed by Canadian laws. It is a sovereign band empowered by Canada under treaty.

The AGC will only accept operators who commit to exercising compliance with U.S. and Canadian laws and regulations. For the time being, and until the regulations attached to the Unlawful Internet Gambling Enforcement Act, are made clear, companies licensed within AFN must comply with current U.S. law. And, concurrent with Canadian law, operators will not be permitted to accept bets from Canadian residents.

"As more clarification comes out about what is or isn't allowed in the U.S., that is what we'll comply with," Giblon said. "We're lucky because we're starting with a clean slate. If we already had a few operators in there and they were offering to U.S. we would be in a very difficult position because it wouldn't actually be breaking our laws. Because we're starting with a clean slate, we don't have to worry about having people in already that we can't get out. We just won't be accepting anyone who isn't abiding by it."

Nevertheless, Giblon said she finds hope in England's recent call for global I-gaming regulations.

"The U.K. position reaffirms the legitimacy of online gaming," she said. "We believe that collaboration on a global scale is important, so that issues in our fast-growing industry are addressed. Whatever the U.S. may be doing, this doesn't set the tone globally; the U.K. is going in the opposite direction, regulating the industry, as are many other EU countries. The U.S. may well be one of the few countries taking this approach over time. It is also not entirely clear what the implications of the Act are, as there is a nine-month period for the regulations to be developed."

The AGC regulations empower the commission to issue the following types of licenses: casinos, sports books, poker, multi-game, special games and network. It will also issue software provider and payment provider licensing. Gaming company are not required to be physically located in the jurisdiction, but servers that are going to operate under the AGC regulations must be located in AFN.

Operators may apply for and, if eligible, be granted licenses multiple licensing categories.

The commission is not quite ready to begin granting licenses, but according to Giblon, is in discussions with a few operators.

As for eNation, it is a fresh company with a vision to build in multiple locations to have a global network of data centers. The AFN is just the first location, though eNation is only operating it on AIT's behalf. Plans for a Southeast Asian data center are the preliminary stages and construction is set to begin in January 2007.

Click here to view the Alexander Gaming Commission Online Gaming Regulations.

Emily Swoboda is the senior staff writer at IGamingNews. She lives in St. Louis, Mo.