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
’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
was sold to Caesars Entertainment Corporation
in 2008 while the Rivers Casino
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