President Mahinda Rajapaksa made the decision after meeting with party leaders Monday night, Xinhua quoted Investment Promotion Minister Lakshman Yapa Abeywardene as telling reporters.
A special debate on significant tax concessions given to the venture was to be held in parliament Oct 24-25, but opposition to the investment has been growing for months.
The minister acknowledged that religious political parties such as the Buddhist Jathika Hela Urumaya and Sri Lanka Muslim Congress (SLMC), which are part of the ruling coalition, have refused to support the casino deal.
A protest was organised by SLMC against the casino in Colombo ahead of the parliament debate.
"We encourage proposals from party leaders on a way forward. There are many concerns that local people will get into the bad habit of gaming, so the morality of casinos is the main reason for this disapproval," Abeywardene said.
He added that parties could suggest ways to discourage local people from gambling, providing examples of measures in Singapore where locals have to pay USD 200 extra and obtain spousal approval.
However, he ruled out banning locals from gaming altogether in the majority Buddhist nation.
Another aspect that is being reconsidered is a clarification on taxation for the new venture.
Abeywardene noted that the Sri Lankan government hopes to tax 5 percent of total revenue rather than from gaming profits, pointing out that the former is far more lucrative for the State.
Nonetheless, this is unlikely to reduce disapproval from the main opposition United National Party (UNP), which has criticized a 12-year tax holiday handed out by the government to Packer.
The Australian Financial Review earlier this month estimated that the tax concessions would amount to as much as USD 1 billion.
The UNP argues this money could be used to reduce cost of living and bring development to a nation ravaged by nearly three decades of civil war, which ended in 2009.
They also argue that casinos are not properly regulated in the country and will create space for massive corruption.
Abeywardene said he is confident that a fresh bill can be tabled in parliament within one month and is upbeat of more investment from Packer.
"He has expressed interest in investing in follow-up projects but the Sri Lankan government is very clear that this will be the only casino he will get," the minister added.
Packer's venture will be the first large-scale casino in Sri Lanka though smaller establishments have existed for years.
--IANS (Posted on 24-10-2013)