Kahnawake, otherwise a quiet First Nation enclave in Canada, is widely familiar among online gamblers and the industry at large. The residing tribe operates sophisticated Internet hosting facilities, through which 60% of the world's online gambling traffic runs through them.

The local Mohawk tribe has been hosting hundreds of online gambling sites. But what was given, now seems threatened and might be taken away.

Reports from late last week claim the Quebec provincial government is pursuing a case against the tribe and the casinos it hosts. Operators of one of the most famous casinos based in Kahnawake, Golden Palace.com, have pleaded guilty in Quebec to charges of illegal gambling.

Cyber World Group, its owner, pleaded guilty to charges of illegal gambling and agreed to a $2 million fine.

The case challenges the tribe's right to grant gaming licenses to companies that operate on its servers, preferring the Canadian Criminal Code, which is the sole authority allowed to grant licenses by law.

In court, not only will the fate of the specific casino be discussed, but the principal according to which the Kahnawake Gaming Commission has awarded 443 permits without any provincial interference in the past. This right is protected, they claim, under traditional native rights enshrined in section 35 of the Canadian Constitution.

The provincial and federal Canadian governments on the other hand is showing signs of cracking on online gambling. Whether it will succeed is anyone's guess. The issue has never before been settled in court, leaving what is referred to as a grey area. It might not stay grey for long.