COLOMBO (Reuters) - Sri Lanka's main opposition party on Monday demanded that police take action against Australian gambling tycoon James Packer, who is due attend a Commonwealth forum this week, saying his plan to build a $400 million casino in Colombo has no proper license.

Mounting opposition by Buddhist religious leaders and some political parties has already led the Sri Lankan government to delay approval for Packer's Crown Ltd planned casino resort - the flagship project in a government plan to draw in Indian and Chinese gamblers.

Harsha de Silva, a lawmaker for the main opposition United National Party, said the casino should be located offshore rather than in the heart of Colombo, where it would "pollute" customs. He also criticized the government's promise of extremely low taxation for a decade on Packer's investment.

The police last week arrested 43 people in an illegal gambling centre in Colombo for unlawful gaming.

"If the police can apply the law on small time casinos, then the police must also apply the same law on the big time casino," de Silva told reporters after filing a complaint with the police.

He said operating a casino without a license is a crime according to the "rule of the land". He urged police to investigate and take action to ensure that no crime is committed.

He acknowledged it was unlikely police would move against Packer, who is scheduled to speak at a Commonwealth Business forum this week, coinciding with the Commonwealth Heads of Government Meeting in Colombo.

Government spokesman Keheliya Rambukewella said casinos are not illegal in Sri Lanka and there are four operators already in the country.

"The president will not issue new licenses for casino other than the existing (ones)," he told reporters in Colombo.

One of Australia's richest men, Packer has been in talks since February with the government over hotel and entertainment investment options as he expands his global gambling business that includes casinos in Australia, Macau, Britain and the United States.

Despite the pressure, President Mahinda Rajapaksa's government is expected to seek approval for the project in parliament later this month, possibly after amending some of the tax concession clauses in response to criticism from his coalition.

Rajapaksa has a more than two-thirds parliament majority, but his government is wary of angering Buddhist leaders.

Government officials have told Reuters that two Sri Lankan entrepreneurs have five casino licenses among them. One of the businessmen is Packer's partner. However, the president has denied that his government has granted any licenses since he came to power in 2005.

(Editing by Robert Birsel and Angus MacSwan)