Charles Sobhraj, 60, a French national who spent 20 years in a prison in India for murdering and robbing scores of tourists, was arrested at the Royale Casino at the Yak and Yeti hotel in Kathmandu, Nepal, on Friday.
Deputy Superintendent of Police at the Kathmandu District Police Office, Tek Bahadur G C, arrested him when he was playing, a security officer at the casino said.
He has been taken to the Kathmandu District Police office.
The police started looking for Sobhraj after an English-language daily, Himalayan Times, published his photograph on Wednesday.
Sobhraj, nicknamed as 'The Serpent' for his talent at disguise, is wanted in Nepal for the murder of two women from the United States and Canada in 1975.
India had deported him to France in 1997 after a 47-day standoff in which French authorities verified his nationality and Indian officials threatened to dump him at the French embassy.