China's balmy holiday island of Hainan, long touted as a place where the country could liberalise gambling, will not permit casinos, senior officials announced this week.
The decision may dampen investment appetite from scores of international and national developers betting on stellar profits in the southern province.
Luo Baoming, Hainan's Communist Party chief, and Wang Yong, the mayor of resort city Sanya, told a briefing at China's annual parliamentary meeting that casinos will never be allowed to operate there.
"We cannot at all allow Hainan to operate casinos," Luo said according to the official Xinhua news agency.
Casino gambling is illegal in China outside of the former Portuguese colony of Macau, an hour's flight from Hainan by plane. In 2013, the local government on Hainan shut down a casino bar that had been operating illegally after a Reuters report drew attention to it.
Hainan has attracted scores of international developers in the past two years, including InterContinental Hotels Group Plc, Starwood Hotels & Resorts Worldwide Inc, and casino operators MGM Resorts International and Caesars Entertainment, who are eyeing a surge in upscale tourism in the country.
Sanya already has more than 200 hotels and an aggressive pipeline for future developments with many operators eyeing the potential for future casino liberalization.
Chinese conglomerate Fosun International Ltd and Sol Kerzner, South Africa's Sun City casino king, in October announced plans to build a US$1.6 billion ($1.89 billion) Atlantis resort at Haitang Bay, a 22 kilometre strip of white sand that will see the development of 30 five-star hotels in the next five years.
Across Asia, from the Philippines to South Korea, countries are building large scale casino resorts to spur growth and increase tourism revenues after the success of Macau and Singapore.
Sanya's coastal location, which boasts cleaner air and ample space, has been a huge draw for domestic tourists with more than 22 million overnight stays registered in Hainan in the first eight months of 2013.