Poker website could be flushed out of Canada

Poker website could be flushed out of Canada by John Waples and Matthew Goodman for www.timesonline.co.uk PARTY GAMING, the online poker company planning a controversial £4.8 billion London listing, faces the threat of legal action under the Canadian Criminal Code. Canada is an important market for the poker group but there are doubts about if the firm’s gaming licence is legitimate. The group’s prospectus reveals “directors have been advised that the extent of the group’s operations and presence in Canada may be sufficient for criminal or civil action to be taken”. The group’s gaming licence was issued by the Kahnawake Gaming Commission in Canada. But the company conceded that there were serious doubts at a federal level as to whether this commission had the authority to issue such a licence. There are also no guarantees that a second licence will be issued. To reduce this risk, Party Gaming is moving its server centre to Gibraltar from Canada’s Mohawk Territory. The casino and bingo server is being moved this August and the poker server by November. But it will retain a back-up operation in Canada. The firm has refused to disclose terms of director’s contracts and its level of insurance to cover litigation. It said there was little risk of directors being arrested when they travelled to America, though the Department of Justice considers online poker to be in violation of federal law — a view not shared universally. Paul Telford at Allen & Overy, a law firm, said: “I imagine in the short term the directors are probably staying well clear of the US on the ground that they would consider themselves at risk were they to enter the country.” Party Gaming said executives regularly travelled to the US. Other authorities are taking a more relaxed view. Party Gaming’s prospectus warns that its Gibraltar gaming licence permits it to offer gambling services only in countries in which “it is not illegal”. The Gibraltar government said it saw no reason to revoke the licence. Shares in the grey market are trading at the lower end of the float range.