Magic Palace Owners Sue Kahnawake Council for $220M Over Casino Shutdown

Magic Palace casino owners in Kahnawake have started a $220 million legal battle against the Mohawk Council of Kahnawake (MCK) and Grand Chief Cody Diabo. They claim the council shut down their business without following proper procedures.

Magic Palace Lawsuit Alleges Council Pulled License Without Due Process

The fight started when the council took away Magic Palace’s license in March 2024. This happened after news reports hinted that one of the casino’s investors, Luftar Hysa, might be helping the Sinaloa cartel launder money. Even though the casino cut ties with Hysa right away, the council still went ahead and put the license on hold, then canceled it for good. This shut the business down.

Stanley Myiow and Barry Alfred, who brought the lawsuit, say the council acted on claims that were not proven, reported The Eastern Door. They also say they never got a chance to tell their side of the story. They claim this move by the council created a messy situation with the rules. The Kahnawake Gaming Commission would not look at the case because there was no active agreement about royalties anymore.

They say this move put them in a tough position, leaving them unable to protect themselves or challenge the cancellation. Their lawyers argue this violates their constitutional rights under the community’s rules.

Magic Palace Sues Over Canceled Expansion, Points to Council’s Conflict of Interest

A big chunk of the damages, about $155 million, comes from a scrapped growth plan, the Kahnawake Entertainment Luxury Complex. This project, which the plaintiffs claim had support from top MCK officials, was expected to bring in $1.6 billion over eight years, with more than $250 million going to help the community grow.

The lawsuit also brings up concerns about possible conflicts of interest in the council. It claims that at least one current member had financial ties to Playground Poker, a competing gaming business in the area. The complaint states that only one of the two council members with such links stepped back from decisions about the Magic Palace.

Myiow and Alfred say they tried to solve the problem through talks for over a year before going to court. They call the lawsuit a needed move to both clean their names and fix what they see as damaged community leadership.The Mohawk Council has not said much about the situation. They have mentioned they will talk to their lawyers to protect the community’s money.