Hedge fund giant Paulson invests in Harrah's
Following the introduction of California's intrastate poker bill, hedge fund firm Paulson & Co has taken a 9.9% equity stake in Harrah's.
Hedge fund giant Paulson & Co has taken a 9.9% equity stake in Harrah’s as more hedge funds circle the egaming sector ahead of US regulation.
As part of the deal, the hedge fund run by John Paulson, who famously made US$20bn betting against subprime mortgages in 2007 and 2008, will provide a cash infusion of US$351m for US$532m debt owned by a Harrah’s subsidiary, according to the Wall Street Journal, equating to a 9.9% stake.
This coincides with eGaming Review receiving a string of calls in recent weeks from hedge funds regarding investment prospects in the US, in the wake of the US’s most populous state California introducing its long-awaited intrastate poker bill.
Harrah’s, which owns the WSOP brand, hired former PartyGaming chief executive Mitch Garber to head up its Harrah’s Interactive Entertainment arm last year and has spent heavily on lobbying for the regulation of egaming at federal level. Land-based casino body the American Gaming Association, on which Harrah’s sits, recently declared itself “open to the concept of legalised online gambling”, with the position of Harrh’s Boyd, MGM Mirage and more recently Wynn the dominant one.
Earlier this year, Harrah’s declared its intention to go public again, following two years of privatisation after its takeover by private equity firms Texas Pacific Group and Apollo Management. The company said it would wait for the economy to recover and for online poker to be legalised in the US before considering an IPO.