The Kahnawake Gaming Commission has closed down Magic Palace Casino indefinitely after the venue’s operational license was terminated amid allegations that it was being used for money laundering.

On March 25, the commission announced that it had issued an immediate suspension and Show Cause notice to Magic Palace, which is located in the Kahnawake Mohawk Territory near Montreal, ordering it to close all of its gaming operations immediately based on “numerous concerns” arising from investigations conducted over the past several months.

The very next day, on March 26, the commission followed up with a statement noting that the Mohawk Council of Kahnawake had terminated its contractual agreement with Magic Palace. As an electronic gaming device operator’s license is not valid without a contractual agreement between the operator and the council under the council’s regulations, the casino has been permanently closed.

Magic Palace poker room is still subject to the prior suspension and Show Cause proceedings. The poker room will remain closed until the outcome of that process.

Mirela’s Restaurant was also closed indefinitely while the investigations continue and until the commission “is satisfied that it is physically separated from Magic Palace’s gaming facility.” The eatery reopened last week.

Mohawk Council alleges criminal activity

The Mohawk Council of Kahnawake’s own statement on March 26 announcing the termination of the casino’s contract justified its decision by alleging that the casino, as well as the adjoining restaurant, were being used for criminal activity.

“Following a review of publicly available court records that revealed that Magic Palace and the adjoining Mirela’s were allegedly being used to commit money laundering and other crimes, the KGC commissioned an independent U.S. consulting group with a specialization in gaming audits and investigations to conduct an investigation,” said the council.

The results of the investigation revealed that “an undisclosed beneficial owner” of Magic Palace who is not a member of the Kahnawake exercised “significant degrees of control over the establishment and received the majority of the benefits” in breach of the terms of the casino’s agreement with the council.

“Closing a community business is always a last resort,” said Gaming Portfolio Chief Cody Diabo. “However, the allegations of conduct that were revealed in court records created serious concern for the MCK […] In the end, given that we learned that there was an undisclosed beneficial owner in the project that was not listed in their paperwork, coupled with grave concerns we had with the manner in which operations were being conducted, we decided we must terminate the agreement.”

Back in October 2023, La Presse had reported that the RCMP suspected that an investor in Magic Palace, Luftar Hysa, might beusing the casino for laundering Sinaloa Cartel money.

“Everything indicates that Luftar Ali Hysa infiltrated the Kahnawake Mohawk Territory to facilitate money laundering activities on behalf of the Mexican Sinaloa cartel, as well as for his own benefit,” said an investigator in a filing at the Montreal courthouse obtained by La Presse.

Hysa is not listed as one of the owners of the Magic Palace. His lawyer Pierre L’Ecuyer said on March 26 that Hysa is “an investor” in Magic Palace and stated that the establishment’s two owners are members of the Kahnawake community. L’Ecuyer also refuted the idea that Hysa is a money launderer or involved in cartel business.