Mohamad Sanoussi, 28, has served almost 12 years of a maximum 16-year sentence. Brothers Bilal and Mohammed Skaf, as well as Sanoussi's brother Mahmoud and a fifth man, Mahmoud Chami, were also convicted for the August 2000 rapes in Sydney's southwest.
In refusing parole on Thursday, the State Parole Authority (SPA) said it took into account a decision by Corrective Services NSW Commissioner Peter Severin to extend Sanoussi's current day leave to one weekend a fortnight to "encourage his successful reintegration into the community".
His parole will be reconsidered early next year.
Sanoussi will be subject to electronic monitoring and must abstain from drugs and alcohol when his weekend leave begins later this month.
In his submission to the SPA, Mr Severin said the 28-year-old faced "considerable hurdles in successfully reintegrating into the community, including the fact he's spent his adult life in custody".
He also noted Sanoussi's intellectual disability, mental health issues and difficulty in putting into practice the lessons he had learned during a custody-based intensive treatment program.
The probation and parole service said it also had concerns about his resettlement into the community, given the length of his incarceration.
"As such, monitoring will be an important part of this inmate's case management," it said.
Sanoussi was ordered to participate in community psychology services and to continue drug and alcohol counselling.
