SOURCE: www.cbc.ca

The company that administers the world's largest internet casino—Golden Palace.com—has pleaded guilty in Quebec to charges of illegal gambling, in a case that raises questions about First Nations' right to hand out gaming licences.

Cyber World Group, which administers the online casino through a server located on the Kahnawake Mohawk reserve, pleaded guilty to the two charges in September and must pay a $2 million fine, the CBC's French language service, Radio-Canada, has learned.

The charges laid against the virtual casino are the first ever in Quebec, and raise questions about the Mohawk reserve's authority to hand out gaming licences.

The online casino industry is flourishing in Kahnawake, where hundreds of betting sites are hosted on servers managed by the Mohawk Internet Technologie (MIT), a business created by the community's band council.

About 60 percent of the world's online gambling traffic runs through servers in Kahnawake.

But according the Criminal Code, only the provincial government is authorized to hand out gaming licences, which prompted Quebec police to raid the Montreal-area offices of Golden Palace.com more than a year ago as part of its investigation.

The Mohawk community has long argued that it has the right to provide space on its servers to house online casinos, under section 35 of Canada's Constitution, which protects traditional native rights.

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