Kahnawake-licensed gambling sites to cease US-facing business

new-jersey-dge-kahnawake-gaming-commission-dealThe Kahnawake Gaming Commission (KGC) will no longer permit its online gambling licensees to serve customers in US states after a Kahnawake-based data center specialist was caught violating its New Jersey license.

On Monday, the New Jersey Division of Gaming Enforcement (DGE) announced that it had reached an understanding with the KGC to ensure that Kahnawake-based websites would not accept customers from any US state in which such activity would be illegal. The new policy takes effect as of Sept. 30.

Continent 8, a Kahanawake-based data center specialist, was issued a transactional waiver by the DGE in 2014 to allow it to operate in New Jersey’s regulated intrastate online gambling market. Last fall, Continent 8 was cited in a New York Times report that claimed many US-facing operators were using Continent 8’s services.

The Times followed up its investigation by contacting a DGE spokesperson, who expressed surprise at the revelation, saying Continent 8 “has an obligation to conduct due diligence with respect to its customers” and that the DGE “would commence regulatory proceedings” against Cont 8 if the company was found to have knowingly done business with US-facing operators.

Many US-facing operators had previously stopped offering services in states that had launched their own intrastate regulated online markets. But the DGE is now projecting its authority beyond its borders to other states that have yet to regulate their markets.

This most recent move by the DGE follows other efforts to keep interlopers off its own turf, including forcing online gambling affiliates to cease doing business with internationally licensed sites and by adding official seals of approval to DGE-licensed websites.