Last week, a native American company, Red Warrior Entertainment, claimed that it had reached an agreement to build a gaming resort in Tonga.
But the government came out to deny this, reaffirming that gambling is illegal in Tonga.
The chief executive of the Ministry of Revenue, 'Anisi Bloomfield, said he suspects the announcement was made to try and garner overseas financial support.
He said the government has responded by setting up a committee that all prospective investors and developers must now go through.