Arafat made the investment in New York City-based Strike Holdings, owner of Bowlmor Lanes (search), through a holding company he created called Onyx Funds, Bloomberg Markets Magazine reported Wednesday.
Bowlmor is located several blocks from the campus of New York University and is popular with Manhattan hipsters, who pay about $8 a game per person to play on evenings and weekends.
News of the investment disturbed some customers. Bowlmor is often used as a location for bar and bat mitzvahs for Jewish teens.
"If I had known, I wouldn't have come, but I promised the kids," said Steve Saslow, 55.
Zeid Masri, managing partner of SilverHaze Partners, a Virginia-based investment firm, told Bloomberg Markets he invested the money in Strike Holdings for Onyx because he had been a former classmate of Strike Holdings' founder, Thomas Shannon.
Strike Holdings, which also owns bowling alleys on Long Island and in Maryland and Florida, said it was unaware the money had come from Arafat.
"Had we known the source of these funds, which represents approximately 2 percent of our company's equity, we never would have accepted them," company spokeswoman Marcia Horowitz told the News. She said Strike Holdings planned to return the money.
The Bowlmor money was among $799 million in international investments by Arafat detailed in the newly released documents. Other holdings included $285 million in Orascom, an Egyptian cellphone company, and $3.2 million in the U.S. software firm Simplexity, Bloomberg Markets reported.