American casino giant MGM Resorts International has reportedly emerged as the mysterious party that last week entered into talks with rival Las Vegas Sands Corporation about the possibility of purchasing the Sands Casino Resort Bethlehem.
According to a report from The Morning Call newspaper citing a pair of unnamed sources said to be familiar with the negotiations, Las Vegas-based MGM Resorts International has begun negotiations that could see it pay as much as $1.2 billion 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.
“The sale of Sands [Casino Resort Bethlehem] seems to come up every six months but this is a casino with a squeaky clean balance sheet that isn’t going to sell to a low-ball offer,” John Decree, senior analyst for Union Gaming Securities, told the newspaper. “That casino will fetch north of $1 billion and if [Las Vegas Sands Corporation] doesn’t get its number, it probably won’t let it go.”
Thursday saw Mark Juliano, President for the Sands Casino Resort Bethlehem, send an e-mail to employees of the Northampton County venue informing them that Las Vegas Sands Corporation had entered into negotiations concerning a sale while he moreover assured the property’s 2,500 workers that they would be kept fully appraised of any future developments.
“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 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.”
Adam Trivison, a research analyst for New York investment bank Gabelli And Company, told The Morning Call that the Sands Casino Resort Bethlehem has for many months been on a short list of MGM Growth Properties, which is MGM Resorts International’s majority-owned vehicle for conducting mergers and acquisitions.
“MGM [Resorts International] uses these regional casinos to build relationships with players it can get into its Las Vegas casinos [and the] Sands [Casino Resort Bethlehem] fits that model perfectly,” Trivison told the newspaper.
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.
“It’s kind of flattering that there’s pretty big interest in that casino,” Pennsylvania State Senator Lisa Boscola told the newspaper. “I don’t think that’s happening across the state. It’s business; you make decisions based on what’s good for the company.”
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.
The Pennsylvania Gaming Control Board reportedly explained that any sale of the Bethlehem venue would trigger a several-month process in which the principals of the new owner would be investigated before the existing license held by Las Vegas Sands Corporation could be transferred at a cost of $2.5 million.