SYDNEY (REUTERS) - Malaysian gambling giant Genting Bhd has increased its stake in Australia's Echo Entertainment Group, just weeks after rival casino company Crown Ltd sold its 10 per cent stake in Echo.

Genting raised its stake in Echo to 6.6 per cent from 5.22 per cent via its Genting Hong Kong Ltd unit, according to a regulatory filing. Financial details were not disclosed.

The increase comes as Crown and Echo wage an increasingly acrimonious war to gain a lock in Sydney on gambling tourists from mainland China.

Echo, which holds the sole licence to operate a casino in the harbourside city until 2019, is lobbying for an extension of that exclusivity and an expansion of its Star Casino in an attempt to block Crown's plans for a high-roller gambling suite.

Crown's proposed VIP facility is part of a A$1 billion (S$1.2 billion) six-star hotel and residential development on Sydney's waterfront that majority owner, billionaire James Packer, has said will bring "thousands more Chinese tourists to Sydney that otherwise wouldn't visit".

Officials with Echo and Genting could not be reached for comment.

Crown and Echo must submit proposals by June 21 and the government will approve only one, meaning either Crown builds a second casino or Echo remains the sole gambling operator.

Crown's stake in Echo was widely viewed as an insurance policy, but sources have said Mr Packer's proposal is likely to win favour with the government.

Genting, through Genting Singapore PLC, unexpectedly cut its stake in Echo last September, giving no reason, but has since applied to increase its stake above 10 per cent. The New South Wales state's gaming authority has yet to rule on that application and has given no timeframe for a decision.