A casino in South Korea's Jeju Island has come under fire for launching false allegations against Chinese gamblers, South Korean media reported.

Four Chinese tourists have sued the Seogwipo casino for refusing to cash out chips worth 1.1 billion South Korean won ($1.1 million) on May 11.

The casino has filed a countercharge, alleging the Chinese tourists had cheated with the help of a casino employee.

But that employee withdrew his testimony later, saying he was forced by the casino to make false accusations against the Chinese gamblers. The local police are planning to charge the owner of the casino.

Local media said the incident may discourage Chinese tourists and have an impact on Jeju Island's image. In 2013, almost four million mainland Chinese tourists visited South Korea, with 1.8 million of them going to Jeju.

South Korean casinos hope to benefit from the increasing number of Chinese tourists, which is expected to reach six billion in 2014.

According to South Korean casino operator Paradise Co, in the past second quarter Chinese gamblers in VIP rooms spent 83.69 billion won ($83.69 million), an increase of 30.1 percent from last year, while Japanese gamblers spent 20.03 billion won ($20.03 million), 7.5 percent less.