Sri Lanka's new government has declared James Packer unwelcome in the country after the gaming mogul pulled out of building a luxury resort following a ban on new casinos.

Packer’s Crown Group on Friday abandoned plans for the $US350 million ($A451.21 million) development, which would have included a casino, after the government also withdrew generous tax concessions granted under the previous regime in efforts to turn Colombo into a regional gaming hub.

“Packer says he will not come. Who asked you to come?” Prime Minister Ranil Wickremesinghe said in a statement released by his office.

“Please don’t come – not in this lifetime.

“We need only good investors… we don’t want an economy relying on casinos,” he said according to a transcript of a speech released on Sunday, a day after it was delivered.

President Maithripala Sirisena swept to power this month backed by the country’s influential main party of Buddhist monks, who had strongly opposed plans to lure gaming companies to the Sri Lankan capital.

On Thursday, the new government fulfilled his election pledges to scrap the five per cent tax rate granted to Packer’s planned 450-room resort – which was approved more than a year ago but had not started construction – and two other foreign-backed developments.

Another casino resort given the go ahead at the same time, a $US650 million development by local conglomerate John Keells Holdings, will still be built, only without the casino.

The future of the third project, a $US300 million resort by local businessman Dhammika Perera who has sought overseas funding, was unclear.

Prime Minister Wickremesinghe named Perera as a businessman who had received favoured treatment from the previous regime and vowed to take back any ill-gotten assets.

Several local, low-key casinos have been in operation for decades, exploiting loopholes in a law that bans such gaming operations.

Finance Minister Ravi Karunanayake said on Thursday he would give those existing casinos, thought to number about five, a deadline of mid April to pay a flat fee of one billion rupees ($A9.80 million) to remain in business.