Nan Mwe Phown, a Red Cross member who was at a hospital in Muse, said the dead included 13 male civilians and two women, one of whom was pregnant, as well as several police officers.
Zaw Htay, the main Myanmar government spokesman, said around 100 insurgents attacked at about 5 a.m. using small arms and artillery, and were repelled by armed police and members of a government-backed militia he called "paramilitaries".
Also injured two dozen people.
A spokesman for the Ta'ang National Liberation Army (TNLA), made up of fighters from the Ta'ang or Palaung ethnic group, admitted it had targeted soldiers and militia who ran the casino on the outskirts of the border town of Muse in northern Shan state.
The encounters between the Myanmar military and the Ta'ang National Liberation Army, or TNLA, have reportedly increased in recent months while the global focus has remained on the Rohingya refugee crisis in the western part of the country. "This is not an ethnic rights movement, this is a terrorist attack".
"Now the Myanmar military is attacking and following them".
He challenged the government statistics about the civilian toll from Saturday's violence, saying it was much lower.
"We fight because of heavy fighting in our region and the serious offensive in Kachin State", he said.
An injured man sits inside a vehicle in Muse, northern Shan state, Myanmar.
A further 20 civilians were wounded, a spokesman said.
Those fleeing violence have sheltered in tents and even churches in Kachin, which is mainly Christian, as rights groups accuse the military of blocking aid.
More than 100,000 displaced people now reside in camps in Kachin and Shan states since a ceasefire between the KIA the military broke down in 2011, according to the latest United Nations statistics.
China on Sunday condemned fighting in Myanmar between government troops and ethnic militants near the Chinese border, that left 19 people dead and caused others to flee into its territory.
Reverend Hkalam Samsun, chairman of the Kachin Baptist Convention, said the Kachin people were "disappointed" with Suu Kyi.
"She ignored the ethnic issue".