In Pennsylvania,
Las Vegas Sands Corporation has reportedly reached a deal in principle to offload its Sands Casino Resort Bethlehem to rival casino operator
MGM Resorts International for around $1.3 billion.
According to a report from The Morning Call newspaper citing two sources with intimate knowledge of the deal, the pair has agreed a price for the
Bethlehem property, which offers 300
slots alongside some 200 gaming tables, but will still conduct several weeks of “due diligence” before making a final announcement.
The newspaper reported that its sources called the sale, which would be the biggest deal of its kind since Pennsylvania legalized casino gambling in 2004, “imminent” although it could take up to six months to close as any arrangement would require the approval of the Pennsylvania Gaming Control Board and the payment of a $2.5 million license transfer fee.
The prospect of the
Sands Casino Resort Bethlehem being sold first surfaced last week after the venue’s President, Mark Juliano, reportedly sent an e-mail to the 2,500 employees of the Northampton County venue informing them that Las Vegas Sands Corporation
had entered into negotiations.
“We have been told today that Sands [Casino Resort] Bethlehem has a potential buyer; it is a sole buyer interested in purchasing the property,” read the short e-mail from Juliano. “The sale is not imminent and there is a lot of work that still needs to be done before a sale is final.”
This was followed soon after by rumors that
Las Vegas-based MGM Resorts International
was the suitor for the Pennsylvania property, which attracts some nine million visitors a year and is the only casino in the eastern state to additionally feature a 300-room hotel, an outlet mall and a concert venue.
“We believe a Sands [Casino Resort] Bethlehem sale, which would likely include
MGM Growth Partners, could also be beneficial for all involved,” Carlo Santarelli, Gaming And Leisure Managing Director for Deutsche Bank Securities wrote in a six-page analysis released on Sunday. “For MGM Resorts International, the transaction would expand a north-east presence that has grown significantly over the past year while MGM Growth Partners potentially benefits from a new rent stream. Las Vegas Sands Corporation sheds an asset [that] has already produced a significant [return on invested capital] and strengthens the capital return potential story.”
Established in 1976 by billionaire by
Kirk Kerkorian, MGM Resorts International operates more than 20 casinos around the world including five regional
United States properties in the
Borgata Hotel Casino And Spa in
Atlantic City,
Maryland’s
MGM National Harbor and the
MGM Grand Detroit along with
Mississippi’s
Gold Strike Casino Resort and
Beau Rivage. It is also constructing the $950 million
MGM Springfield property in south-central
Massachusetts and expects this venue to open for business as soon as next year.
MGM Resorts International, which recently announced consolidated net revenues of $9.5 billion alongside domestic resort takings of $7.1 billion for 2016, additionally runs 14 properties in Las Vegas including the
New York-New York Las Vegas, the
Bellagio Las Vegas and the
MGM Grand Las Vegas and has reportedly long been interested in building a $1.5 billion casino for New York City. However, all of its appeals for a
New York license have fallen on deaf ears with the newspaper alleging that the purchase of the Sands Casino Resort Bethlehem would give it the next closest casino to the giant city.
Along with the main hotel and casino building, which was once home to a works of Bethlehem Steel, The Morning Call reported that Las Vegas Sands Corporation’s holdings in the Bethlehem area moreover encompass a sliver of nearby land where the city wants to build a parking garage.
“We’ve considered Las Vegas Sands Corporation a good corporate citizen but this sale could be a good opportunity,” Bethlehem mayor Robert Donchez told The Morning Call. “There has been some frustration in getting Las Vegas Sands Corporation to put some focus on the rest of the property. The buyer might be more willing to consider developing it or at least selling it off to someone who will.”
The Morning Call reported that the sale of the Sands Casino Resort Bethlehem would mark the sixth time a Pennsylvania casino has changed hands.
Harrah’s Philadelphia Casino And Racetrack in
Chester was sold to
Caesars Entertainment Corporation in 2008 while the
Rivers Casino in
Pittsburgh changed hands before opening in 2009. Similarly,
The Meadows Racetrack And Casino was first sold in 2011 before ultimately being acquired by
Gaming And Leisure Properties Incorporated last year while
Reno-based
Eldorado Resorts Incorporated bought the
Presque Isle Downs And Casino in 2014.