Casino operator Echo Entertainment has raised $266 million in the first stage of a new share sale launched to reduce its debt and support its VIP gambler business.

The company says it expects to raise $454 million by offering one new share for every five already held by shareholders, at $3.30 per new share.

Institutional shareholders took up approximately 95 per cent of new shares on offer in the first stage of the capital raising venture, Echo said in a statement on Monday.

Its largest shareholder, Crown, will take up its full entitlement, and Crown’s overall stake in Echo will remain at 10 per cent.

The share offer to retail shareholders, starting on June 25, is expected to raise $188 million.

Echo owns The Star in Sydney, Treasury casino in Brisbane, and the Jupiters casinos on the Gold Coast and in Townsville.