Hamish Howitt, landlord of the Happy Scots Bar in Blackpool, could become the first publican to face a £2,500 fine for defying the smoking ban.
Officers from Blackpool Council have handed out three penalty notices to smokers over the past week after they found customers smoking using ashtrays provided by the landlord.
A spokeswoman for Blackpool Council told the BBC: "So far, we have had a very high level of compliance across the town and businesses are responding positively.
"With regards to Mr Howitt, he has been verbally informed that he has been reported for prosecution twice and investigations are ongoing.
"We are hoping to summon him to court to continue with legal proceedings against him," she added.
Howitt has been a prominent critic of the smoking ban and told the Blackpool Citizen: "I suppose they are going to come after me but I believe I'm just standing up for what is right.
"I won't be stopping my customers smoking. I will go to jail if I have to, and I will go gladly."
By Christopher Walton