Sri Lanka has suspended final approval for two casino projects, including one backed by Australian gambling mogul James Packer, after protests from within the ruling coalition's ranks, a government minister says.
The two projects involve a total investment of around $US1 billion ($A1.04 billion).
A bill giving the two separate casino hotels the go-ahead and granting them a 10-year tax holiday was due to be presented to parliament on Thursday.
But Investment Promotion Minister Lakshman Yapa Abeywardena said on Tuesday he had withdrawn the bill, which was meant to grant final approval to the projects after cabinet gave them the green light last month.
"The government felt that we should withdraw this bill because of the concerns raised by some of our own coalition partners," Abeywardena told reporters.
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"There is a lot of misunderstanding and we want to address all that before we go to parliament."
Local firm John Keells Holdings is expected to invest $US650 million ($A674.8 million) in a waterfront casino in the capital, in conjunction with a so-far unannounced foreign partner.
James Packer's company has committed $US350 million ($A363.35 million) for a similar development.
The billionaire, who operates casinos in Melbourne, Perth and Macau and is planning a complex in Manila, has said the Colombo project on the banks of Beira Lake would create 2500 jobs.
A party made up of Buddhist monks, which is a member of the ruling coalition, has opposed the casinos, while individual monks have warned they will stage protests if the government goes ahead with the projects.
Abeywardena denied the bill has been axed, saying it was being reworked so that the 10-year tax holiday was confined to the hotel operations and not the casino side of the business.
He said he expected the bill would be introduced in about a month, with the government hoping to take five per cent of all casino revenue irrespective of the profits.
The bill is expected to be passed when it is eventually introduced because President Mahinda Rajapakse's party has a majority in parliament.
"The tax concessions will be there, but there will be more clarity on what is taxed and what is not. We will also remove any ambiguities in the bill," the minister said.
Sri Lanka is banking on high-end casinos to attract high-rollers and boost tourist arrivals to 2.5 million by 2016 from the current level of about a million tourists a year.
