SYDNEY (REUTERS) - Chinese tycoon Tony Fung has offered to pay A$214 million (S$249 million) to buy Reef Casino Trust, which owns the only casino in the Australian city of Cairns near the Great Barrier Reef, in a bid to enter the country's gambling and tourism market.

Shares in Reef Casino surged 42.6 per cent to six-year highs after the announcement.

Mr Fung, a billionaire son of one of the founders of Hong Kong conglomerate Sun Hung Kai & Co., has previously proposed a A$4.2 billion casino and resort project in Cairns, which has yet to get approval from the Queensland state government.

Reef was in discussion with Aquis Casino Acquisitions Pty Ltd, controlled by Mr Fung, after receiving a non-binding proposal to buy all the units at a cash price of A$4.354 per unit, the trust company said in a statement.

The offer is priced at a 53 per cent premium to Reef's closing price on Tuesday.

One condition of the proposal is that Aquis also buys Casino Canberra, which is associated with Reef.

The biggest holders of the trust - Casinos Austria and France's Accor Group - had indicated that they would support the proposal unless there was a superior proposal, the trust added.

Aquis has started meeting with the Queensland and Australian Capital Territory governments regarding regulatory processes involved, according to the statement.

Australia's 13 casinos currently capture just one per cent of the US$34 billion (S$42 billion) market for high-roller gamblers in Asia annually, but state governments are greenlighting multibillion dollar developments to boost that figure.

Echo Entertainment Group Ltd and Crown Resorts Ltd, controlled by billionaire James Packer, are moving north as they battle for supremacy in the market. Echo unveiled plans to invest A$1.5 billion in its Queensland casinos last Friday.