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Packer deals himself in at Hungary's EuroVegas

Gambling magnate James Packer has teamed with US-based resort developer Eighth Wonder and a handful of other investors for his third casino foray in the past month.

Packer's Publishing and Broadcasting Ltd has invested an unknown sum as part of an initial €137.5 million ($ 187.1 million, $A226 million)) fund raising to build a Hungarian casino complex called EuroVegas. The move cements PBL's plans to expand its casino empire beyond Australia and the Chinese province of Macau, and follows several failed attempts to enter the Singaporean and Russian gambling markets. Packer last teamed with Eighth Wonder and Macau's Melco International Development seven months ago as part of an ultimately unsuccessful $4.5 billion bid to build Singapore's second casino resort. Other investors in EuroVegas include the US investment management group linked to US philanthropic dynasty the Guggenheim family, and London hedge funds. PBL has been on the lookout for good gaming assets after generating $4.6 billion from the spin-off of some of its media assets into a 50-50 joint venture company with a private equity group last October.

Developers are hoping EuroVegas will be "a Las Vegas" in the heart of Eastern Europe, with five super casinos to be located close to the town of Bezenye, now home to 1650 people, in the Győr-Moson-Sopron region in north-west Hungary, close to the Austrian and Slovakian borders. The project will include a series of hotels, as well as a giant amusement arcade centre. The development will be positioned to attract wealthy Russians to what will be Europe's largest casino resort. The funds invested by PBL and others will be used to buy an 80% controlling interest in the land and gaming licenses for EuroVegas. The remaining 20% will be controlled by Austrian hotel company Asamer Group, which is selling the 80% stake and will be the local development partner. The hedge funds' money will be used to back the land acquisition and to start development. Work on the 240 hectare site is expected to begin in April next year. The deal has been made possibly by a change to Hungary's gambling law in 2005.

PBL's investment follows the company's first foray into the US casino market for $300 million and a $1.45 billion joint venture purchase of a chain of casinos in Canada. Both deals were signed in early April. Both the Las Vegas casino project and the Hungarian project are yet to be built and involve relatively small amounts of money compared with the billions invested in Macau. The company already owns PBL's Burswood Casino in Perth and Melbourne's Crown Casino. It has also been mentioned as a potential suitor for Tabcorp, owner of Sydney's Star City casino. Packer was reportedly in the West Indies for the World Cup cricket final, entertaining the victorious Australian side aboard his yacht. (theage.com.au)