Earlier reports indicated an unnamed casino corporation approached Las Vegas Sands Corp. looking to purchase the company’s Sands Bethlehem Casino. Now we can now link a name to the potential sale of the Pennsylvania property: MGM Resorts.
According to new reports by Matt Assad, two sources have confirmed MGM has reached an agreement to purchase Sands Bethlehem. The final sale price of the state’s second largest casino (by revenue) would be in the $1.3 billion range.
The move makes sense for both companies.
Why Sands might be willing to sell
Both companies, MGM and Sands have casinos located in destination cities around the globe. But MGM is also a regional casino power. The Sands Bethlehem property is an outlier in Sands’ portfolio. It has been rumored to be an asset the company was looking to move for several years.
Security guards unite!
Another reason Sands may be willing to offload the property has to do with unions.
Security guards at Sands Bethlehem did the unthinkable a few weeks ago, when they successfully unionized. They became the first group to do so at a Sands’ casino property. That is impressive when you consider the company’s presence in Las Vegas, where the Service Employees International Union is incredibly strong and politically powerful.
Online gambling a matter of when not if
In addition to being an outlier in Sands’ business portfolio and the recent unionization, changing dynamics in the state may also be contributing to Sands’ willingness to sell its Pennsylvania casino.
Pennsylvania is seen as a strong candidate to pass an online gambling legalization bill this year.
Sands CEO Sheldon Adelson is vehemently opposed to online gambling (perhaps as much as he is to unions). The chances the casino would get involved in online gambling should the state pass a bill are near-zero.
Because of its abstinence from iGaming, Sands’ competitors would have a built in advantage both in terms of revenue as well as marketing, considering online gambling’s reach into new untapped demographics.
Why MGM might be an interested buyer
As noted above, MGM not only covets huge, destination casinos, they’re also interested in high-end regional casinos. In the past several years, MGM has greatly increased its greatly presence in the Northeast and mid-Atlantic regions.
- Opened the billion-dollar MGM National Harbor just outside of Washington DC;
- Begun construction on the MGM Springfield Casino in Massachusetts, another billion-dollar casino project;
- Bought out Boyd Gaming’s 50 percent ownership in the Borgata in Atlantic City, making MGM the sole owner of the property.
- Tried (and failed) to win one of the casino licenses that was up for grabs in New York.
Taking over the already thriving Sands Bethlehem would seem to fit in nicely with the company’s other initiatives in the region. Those designs seem to center around having the biggest and best or property in the market.
A different view of online gambling
MGM is also ramping up their online presence. The company is prepping to launch an MGM-branded online gambling website in New Jersey. With Pennsylvania the strongest candidate to pass a bill legalizing online gambling, MGM would be able to continue explore its online options.
Of note, MGM could launch an online poker site in Nevada, and has casino properties in two other states that are believed to be strong candidate states for online gambling: Massachusetts and Michigan.