A new online casino opened in Saskatchewan earlier this week. Operator Bernie Shepherd says the site's servers are located in the Virgin Islands. (CBC)

While the Saskatchewan government says it won't proceed with online gambling, First Nations are not yet ruling it out.

On Wednesday, Federation of Saskatchewan Indian Nations chief Perry Bellegarde noted that online gambling is already underway in B.C. and Quebec and says Saskatchewan should consider it, too.

"We need to ensure Saskatchewan's gaming industry is prepared for this emerging competitor," Bellegarde said in a news release. "First Nations and the province have history working together in developing a strong gaming industry. We can do the same with online gaming."

The FSIN was talking about online gambling a day after a man from the White Bear First Nation launched his own online casino.

The gambling website being run by former White Bear chief Bernie Shepherd isn't sanctioned by the province or FSIN.

Asked about the casino earlier this week, Donna Harpauer, the minister responsible for the Saskatchewan Liquor and Gaming Authority, said the government has already decided it won't allow online gambling, because the potential risks outweigh the benefits.

The province runs two casinos of its own, while the Saskatchewan Indian Gaming Authority runs six. The casinos generate millions of dollars in profits every year for First Nations and the government.

However, the government has in the past raised concerns about expanding to online, including the possibility of more problem gambling.

Bellegarde said the FSIN isn't involved in the new venture, but is closely monitoring Shepherd's online casino.