Funds Gamble on Kerzner

This pursuit of new international projects may be particularly timely with gaming gaining ground globally. "Gaming is becoming more socially acceptable. It is also a way for governments to raise money," says Sandler. There are no super casinos for now in the U.K., for instance, and there are talks of developing large gaming resorts in Thailand.

In general, "hedge funds invest in a number of gaming names," says Bill Schmitt, an analyst a CIBC World Markets, because the sector is filled with headlines. Laws that introduce, ban, limit or reintroduce gambling create catalysts for hedge fund trades. The uncertainty around the inclusion of casinos in the New Jersey Smoke-Free Air Act -- which bans smoking in indoor places -- is a perfect example. The bill finally passed in January with a provision that exempts casinos, a plus for investors making bullish bets in Atlantic City-based casino companies.

Executives at Pirate Capital, Glenhill Overseas Management and Hayground Cove Asset Management, all funds that invest in Kerzner, did not return calls. A spokeswoman at Kerzner declined to comment.