Abortive SIGA-Taiwan Deal Raises Questions About the Ability of First Nations Gaming Operators to Do Business Abroad

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Richard Swayze

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Abortive SIGA-Taiwan Deal Raises Questions About the Ability of First Nations Gaming Operators to do Business Abroad


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On July 25, 2008, published reports indicated that the Saskatchewan Indian Gaming Authority (“SIGA”) had entered into a deal to manage casinos outside of Canada, involving a memorandum of understanding between SIGA and representatives of an aboriginal tribe of Taiwan (the “MOU”).

Within hours of the publication of those initial reports, the CEO and president of SIGA issued a press release stating that the individual who negotiated the deal was not an actual representative of SIGA; that SIGA itself had not signed the MOU; and that SIGA was not involved in formal discussions with the Taiwanese tribes. The press release went on to state, “[o]ur company is focused on growing and developing in Saskatchewan,” seemingly ruling out any foreign ventures of this sort.

On the surface, such a deal would appear to be a natural fit for SIGA. It is uniquely placed to provide casino management expertise to an aboriginal people taking their first foray into gaming. Moreover, a Canadian First Nations company being recognized for its gaming expertise in this manner would encourage the development of First Nations gaming acumen throughout Canada.

There are numerous reasons why SIGA might choose not to adopt the MOU. One reason may be legal uncertainty regarding the authority of Canadian entities to provide gaming services outside of Canada.

SIGA is a non-profit corporation created by the Federation of Saskatchewan Indian Nations in 1995 to carry out casino operations. The Saskatchewan Liquor and Gaming Authority (“SLGA”) is a Crown Corporation established by the Government of Saskatchewan to conduct and manage gaming across the province under the authority derived from section 207 of the Criminal Code (the “Code”), which under certain circumstances may exempt entities from the offences in Part VII of the Code. SIGA provides physical infrastructure and personnel to support day-to-day operations at casinos located on First Nations’ reserves in Saskatchewan, pursuant to a Casino Operating Agreement with the SLGA.

A 2002 decision of the Prince Edward Island Court of Appeal (the “Earth Future Lottery reference case”) prevented a charity licensed by that province from conducting and managing gaming that would have also been available to residents of other provinces and other countries. Since that decision was upheld by the Supreme Court of Canada, many in Canada have felt constrained in their ability to offer goods and services to the international gaming industry.

We can only speculate as to the extent to which such legal concerns prompted SIGA’s reluctance to endorse the MOU. There may well have been business reasons that were equally decisive. We can state definitively that nothing in the Code or the Earth Future Lottery reference case prevents a First Nations gaming operator such as SIGA from providing operational services to foreign casinos.

The Earth Future Lottery reference case was concerned with the exemptions provided by section 207 of the Code. However, those exemptions are not the starting point of the analysis. Before asking whether a gaming-related activity falls within the purview of section 207, one must first ask whether that activity would otherwise amount to an offence recognized by any other provision of Part VII of the Code.

Gaming that takes place in a foreign land-based casino would take place entirely within that foreign country, presumably with the explicit approval of that country’s government. Such activities would likely not have sufficiently substantial connections to Canada to fall within Canadian criminal jurisdiction. There would be no offence committed, and therefore no need for any of the exemptions provided by section 207 of the Code.

As well, if SIGA needed to make or print things in Canada and send them to Taiwan to assist in its operational duties, that activity would likely be permitted by section 207(1)(h) of the Code, which was enacted for the specific purpose of ensuring that gaming products and services be included as a dimension of the Canadian export package.

First Nations will continue carving out a space for themselves in the regulation of gaming in Canada. In the course of those efforts, First Nations people will gain expertise in gaming. Such expertise is a valuable international commodity, which First Nations companies should trade upon, exploring every legal avenue available for that purpose. Besides the obvious economic benefits that would accrue, First Nations entities that establish internationally recognized credentials in the industry can only assist in the movement towards obtaining self-government for First Nations in the area of gaming regulation.

By Michael Lipton and Kevin Weber, Elkind & Lipton LLP