Finance Minister Mohammad Shafi, when contacted, said: ``I have no knowledge about this, as we are busy with elections these days.'' He, however, said that the State Government needs to enact a law to legalise gambling before sanctioning a casino.

However, sources in the Government confirm that after the Finance Department's go-ahead, the Commissioner Secretary, Tourism, Parvez Dewan, sent the letter of sanction to Hotel Grand Palace. ``This casino will improve the flow of tourist traffic into the Valley and help Kashmir's tourism industry,'' Dewan is said to have written to Lalit Suri, owner of the hotel.

Sources said that there are applications of two more hotels, Broadway and Hari Mahal, pending with the Government.

A senior Finance Department official told The Indian Express that Chief Minister Dr Farooq Abdullah was himselfinterested in this case, so there was no option left but to grant the sanction. ``Even the legal aspect was ignored,'' he said.