It’s been a tough few weeks for Australia’s second richest man, James Packer.

Firstly, Consolidated Media Holdings lost 43c, or 10%, to $3.87, almost a dollar under the suggested bid price from James Packer and Lachlan Murdoch. Mr Murdoch is in the US trying to find replacement equity investors for his side of the deal.

Then, Challenger Financial Services Group plunged 37c, or 19% to $1.60 on Friday, on fears it has too much debt and not enough liquidity. That was the biggest fall on the ASX 200 on Friday.

Then, Ellerston, his listed funds management spin-off, in which he owns around 7.6% and is a director, is just 2 cents above its low of $1.70 after trading on Friday.

Finally, in a filing with the US Securities and Exchange Commission last week it was reported that Mr Packer and his Las Vegas developer partner, Christopher Milam, have been making monthly payments since last September to maintain their option to acquire a 27-acre former water park on the Las Vegas strip.

According to the SEC filing by the seller of the park, Archon Corp, the option must be exercised in the next 120 days for a new minimum price of $US475 million. The original amount was $US450 million but it was increased when Packer and Milam delayed an option payment late last year.

According to US media reports the water park is immediately south of the Sahara hotel-casino, and is one of the last large available properties on the Strip that has not recently traded. Milam and Packer plan to develop a $US5-billion resort anchored by Las Vegas Tower, a 1,063-foot-high tower that would be by far the tallest in the region, albeit some 800 feet shorter than originally designed due to its proximity to the airport.

Reports say that if the “carry option” payments continue into this year, Milam and Packer have made $US61.2 million in non-refundable payments to Archon, including at least $US16.2 million that won’t be applied to the purchase price.

Milam and Packer are due to make another payment this month of $US2.3-million, which then rises to $US2.9 million a month until 30 June when they have to either exercise the option or lose it.

US brokers say that assuming they exercise the option in June and close in August, Milam and Packer will have made more than $US78 million in payments on the option, approximately $US33 million of which won’t be applied to the $US475-million purchase price, taking the total cost of the property to approximately $US508 million.

That is still thought to be a cheap price as it would be around $US20 million dollars an acre, or well under recent deals on the strip in Las Vegas. Of course finding the rest of the purchase price and then getting finance for the huge project will be a big ask in this environment with the credit freeze tightening.

Milam optioned the site in June 2006, when Packer invested $US22.5 million to gain a 37.5% interest in the project.

Financial markets have changed dramatically since then, especially commercial property and its financing. It’s depressed as lenders and others withdraw and watch commercial property values fall sharply. Also turning is the Las Vegas gambling market with revenues down for the first time in five years in January.

Analysts caution that its only one month’s figures, but revenues also fell in other gaming areas, such as Lake Tahoe.

Las Vegas and Nevada have been badly hit by the subprime crisis and housing slump: the states around Nevada, including California, have also been badly affected by the crisis. So it’s no wonder gambling revenues are down. Rising petrol prices have also forced American consumers to cut back on spending. And now unemployment is starting to rise sharply.

Now, all he needs is a report saying that Macau revenues have been hit…