When you’re a 73-year-old hellraiser who has made nearly £2 billion from sex, sequins and seven-card stud, and partied with everyone from Sinatra to Kanye West, how do you prove that you’ve still got it? If you’re the hotelier and casino boss Sol Kerzner, you look at a tanking economy and decide to host the biggest party. Ever. In Dubai.

This week Kerzner is splashing out £40m on the launch of his ”billion-dollar baby”, a new hotel called Atlantis, which exceeds the previous record of £38m that Britain’s richest man, the steel magnate Lakshmi Mittal, spent on his daughter’s wedding at Versailles in 2004. ”Nobody has ever done anything like this — except me, when I opened the Cove in the Bahamas last year,” says Kerzner. “I’m going to upstage myself.”

No expense has been spared for the launch of the £1 billion Atlantis, a giant hotel and water park that straddles the Palm Jumeirah, the reclaimed island in the Persian Gulf. Take the launch invitation: a blue-and-gold box containing models of global architectural icons — the pyramids, the Taj Mahal, the Empire State Building and now, of course, Atlantis. The 2,500-strong guest list mixes royalty and celebrity. Dubai’s ruler, Sheikh Mohammed Bin Rashid al-Maktoum, will be joined by the Hollywood actors Robert De Niro, Denzel Washington, Charlize Theron and Lindsay Lohan (below right), the singers Janet Jackson and Lily Allen, plus Oprah Winfrey, Naomi Campbell, Agyness Deyn and the Duchess of York. They will all stay in the Atlantis suites, the most lavish of which is the £16,000-a-night Bridge Suite, which spans the hotel’s two towers. Sheikh Mohammed has laid on Emirates’ new double-decker Airbus A380 for guests — at a cost of £4,000 per pampered passenger.

The sushi master Nobu Matsuhisa is flying in 20 tonnes of fish to make his signature black cod, and Giorgio Locatelli of Michelin-starred Locanda Locatelli in London is cooking his trademark pumpkin ravioli. Fifty tonnes of explosives will be used in a fireworks display; Kylie will perform in a black-and-gold dress specially designed by Jean Paul Gaultier; and later, Samantha Ronson (below left) will be on the decks.

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Who better to pull it all off than Kerzner? “They call me the mad kid on the block, but I’ve always come through,” says the diminutive South African, who burst onto the scene 30 years ago with the controversial Sun City resort — strippers and gambling in one of the tribal homelands of apartheid South Africa. It was such a success that Kerzner built the Lost City nearby. And when they said his first Atlantis, in the Bahamas, was too big, Kerzner proved them wrong again, and last year spent £250m building the Cove extension. But then, Kerzner is a fighter. A former boxer, he has survived a corruption investigation, a triple heart bypass, the suicide of his second wife and the recent death of his son Butch in a helicopter accident. Sinatra called him the “best saloon-keeper in the world”. His friend Nelson Mandela has praised him as “the greatest entrepreneur”.

Not everything, however, has gone to plan. The hotel lobby burnt down two months ago, and it has taken an army of 2,000 to repair the damage. Environmentalists have forced Kerzner to release the star attraction in the giant aquarium, Sammy the whale shark. And, with the world facing the worst financial crisis since the Great Depression, critics say spending so much money on “a bit of fun” is in spectacularly bad taste. Kerzner shakes his head: “It’s not just about a party. We’re building an icon. And if we can have fun on the way, great. When times are bad, people need to escape even more.”

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