Casino Owners: Cancellation of Expansion is Reason for $220 Million Lawsuit
Posted on: June 4, 2025, 12:41h.
Last updated on: June 4, 2025, 03:01h.
- Multimillion-dollar Magic Palace casino expansion was canceled
- Casino owners filed a $220.5 million lawsuit against the Mohawk Council of Kahnawake and its Grand Chief
- Plaintiffs are pushing for fall court date
A CAD $220.5 million lawsuit filed by two owners of Magic Palace casino in Montreal against the Mohawk Council of Kahnawake (MCK) and its Grand Chief is about more than the permanent closure of a 15-year-old facility generating millions in revenue and the elimination of 168 jobs. It’s also about the “extinguishing” of a high-value expansion project the plaintiffs say was in late-stage development, according to legal documents and reporting by The Eastern Door.
In the lawsuit, the two casino owners, Stanley Myiow and Barry Alfred, claim there was a “clear disregard” for due process when the casino was shut down in March 2024. According to legal documents filed in Superior Court, up next is another hearing between lawyers for both sides to determine court dates for the fall.
In March 2024, the MCK terminated a royalty agreement with Magic Palace for electronic gaming devices (EGDs), effectively terminating the operator’s license with the Kahnawake Gaming Commission (KGC). That followed an RCMP review and news reports around allegations that an Albanian investor was using the casino to launder money for a Mexican cartel.
Lawyers Meet About a Fall Court Date
A spokesperson for the two casino owners told Casino.org that in their view, being a business enterprise, the MCK and the KGC weren’t respecting the regulations they were all bound to, based on the sequence of events that happened last year. After the royalty agreement was terminated, the plaintiffs weren’t allowed to formally challenge what the other side was doing or defend themselves before the casino was shut down, they contend.
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 MCK, Grand Chief Cody Diablo, and the KGC are the defendants.
$155 Million Casino Project Cancelled
In the court documents, the casino owners argue that action was taken without having those claims against their business verified.
The plaintiffs are seeking CA$220.57 million in damages. Part of that is for a now-canceled $155 million project, which was projected to yield CA$265 million for the community in the coming years.
The Kahnawake Entertainment Luxury Complex was a “high-value expansion project in late-stage development,” according to the filing.
That project, designed as a premier gaming, entertainment, and hospitality destination, with a “state-of-the-art gaming floor, high-limit and VIP gaming areas, full-service hotel, fine dining, entertainment venues, and retail spaces,” was being developed with MCK officials knowing about it, the plaintiffs said.
The project was projected to generate CA$1.6 billion in revenue from EGDs and tables from 2026 to 2033, which would place it on the same level as Playground Poker, its larger competitor. The casino expansion was projected to generate CA$176.5 million in net profit over those years.
The lawsuit claims two unnamed MCK Chiefs hold direct financial interests in Playground, raising conflict of interest concerns.
‘Clear Disregard for Due Process’
“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 filing alleges that the claim “collapses under oath” and that the only document reviewed was a PowerPoint summary, neither authored nor verified by the MCK. The filing further alleges that no court records or financial data were ever reviewed in connection with the case, nor was any plaintiff ever contacted.
“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.”
Casino Shut Down in 2024
The lawsuit claims Diablo, who at the time was the Kahnawake chief overseeing gaming, used the closure to boost his 2024 election campaign.
“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 in Contributions to Community
A spokesperson for MCK told Casino.org they had no comment, “as the matter is before the courts.”
In a news release statement issued the day after it closed the facility, MCK said that an “investigation revealed that there was an undisclosed beneficial owner of Magic Palace, who is a non-Kahnawake, who exercised significant degrees of control over the establishment and received the majority of the benefits. This breached the terms of the Royalty Agreement that was entered into by Magic Palace and the MCK.”
Alleged Money Laundering on Behalf of Cartel
In their lawsuit, the plaintiffs claim they had cut ties with the investor in question in the fall of 2023 amid the news reports detailing the money laundering allegations, and that they cooperated with the authorities.
They also claim, that since 2019, Magic Palace’s EGD payments under the royalty agreement contributed more than CA$12 million to MCK’s coffers – MCK’s largest private revenue source.
Magic Palace had grown its workforce to over 100 employees. The property had expanded from a poker room establishment to a 23K-square-foot facility with 400 EGDs, a high-stakes poker room, 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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