The Tongan government says it is looking into a new tourism development which does not include a casino.
On Monday, an American news agency published a release from Red Warrior Entertainment, claiming Tonga's Cabinet had formalised an agreement including a casino, more than two weeks ago.
In a statement, the government said a proposal was received in November for a development known as the Tavake Tamafua Tourism Investment Project.
The proposal included an airport hotel and shopping mall, luxury villas and a gaming resort.
The statement said Cabinet supported the project subject to legal documents, plans and due diligence.
However, on November 11 Cabinet decided to support only the hotel, mall and villas and not the gaming resort.
Cabinet also asked that the full plan for the project be submitted for final consideration and approval.
The Government said gambling was illegal in Tonga so an application for a gaming license would be futile.
The Government said any proposal that could be deemed to disrupt the peace and harmony of society would be carefully scrutinised.