Andhra Pradesh Tourism Minister M Srinivasa Rao shot down the idea that the government may be considering Goa-style floating casinos off the coast.
His denial, cited in local media, followed a report earlier this week that the state government was discussing a proposal with the Union government.
The idea was to help encourage tourism that has been hit hard by the Covid-19 pandemic.
The Tourism Department is estimated to have suffered a revenue loss of Rs 2,000 crore so far and expects the losses to mount to Rs 3,500 crore by December.
Andhra Pradesh last month announced it was banning all online gambling.