Falcone’s HC2 Invests in Gaming Nation in Bet on Fantasy Sports

Philip Falcone
HC2 Holdings Chairman Philip Falcone. Photographer: Jacob Kepler/Bloomberg

Philip Falcone is getting on the fantasy sports bandwagon.

The former hedge fund manager’s HC2 Holdings Inc. acquired debt and warrants in Gaming Nation Acquisition Corp., which runs a fantasy sports portal and sites that provide information to fans who play the online games, according to a statement Wednesday.

Daily-play fantasy sports have attracted investments from groups such as Comcast Ventures, Raine Group and NBC Sports Ventures. Some of the biggest portals have raised venture capital to enhance their products, partner with professional sports leagues, and offer prizes of more than $1 million.

Gaming Nation “has the potential to be an industry leader,” Falcone said in the statement. The Toronto-based company has a “platform for substantial future growth.”

HC2 bought an unsecured convertible debenture with a principal amount of C$20 million ($16 million), tied to Gaming Nation’s combination with Oceanside Capital Corp., according to the statement. Falcone’s Herndon, Virginia-based company also got a warrant for stock representing 38 percent of shares on a fully diluted basis.

Gaming Nation operates information sites Fantasy Guru and PickNation along with Fantasy Feud, which runs five daily fantasy games.

Unlike online sports betting, which is banned in the U.S., for-fee online fantasy sports are legal. Participants select real players and accumulate points based on the game-day statistics they generate.

Falcone is focused on HC2 after stepping down from HRG Group Inc., a conglomerate that he built with holdings in insurance and consumer products. HC2 agreed in April to buy two units from American Financial Group Inc. that provide long-term care and life coverage.

HC2 climbed 5 cents to $11.05 at 9:38 a.m. in New York, extending its advance to 31 percent this year.

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