Ivo Karamanski, 39, had joined a party when a quarrel among guests ended in a shootout, police said. Mr Karamanski and his bodyguard died at the scene. Two other guests were wounded. Police later arrested a 33- year-old man.
Mr Karamanski, a former national rowing champion, ran a prosperous insurance company. In 1986 he was sentenced to two years in jail for fraud. He was believed to be a key figure in Bulgaria's underworld.
Despite his reputation, Mr Karamanski maintained good connections with police and judiciary officials. He once celebrated release from detention by having a cup of coffee in public with the state prosecutor.
He was among the founders of criminal groups set up and controlled by former athletes. In the nine years since Bulgaria threw off Communist rule, many former sports stars have gone from being legitimate bodyguards to operating shady "security" services. (AP)