Sands Bethlehem Buries Expansion, MGM Buyout Talks Continue
Posted on: May 10, 2017, 01:00h.
Last updated on: May 10, 2017, 01:14h.
Sands Bethlehem is folding on a $90 million expansion project that would have added almost 100,000 square feet to the Pennsylvania casino resort.
The decision to halt construction is rumored to be related to the ongoing negotiations between the property’s owner, Las Vegas Sands, and potential buyer MGM Resorts. Neither side is commenting publicly on the continued acquisition discussions, but Bethlehem Mayor Robert Donchez (D) is.
“It is my understanding that the expansion is on hold,” the mayor explained this week. “I expected everything would be on hold until there is some clarity. I certainly hope that whether it’s Sands or MGM, the owner goes forward with the expansion.”
Las Vegas Sands, owned by Nevada billionaire Sheldon Adelson, had planned to place 380 additional slot machines and 81 tables at the eastern Pennsylvania resort. Along with two new restaurants to complement famed chef and restaurateur Emeril Lagasse’s and baker Buddy V’s numerous eateries, once completed, the Sands Bethlehem expansion was expected to grow tax revenue for the city.
Las Vegas Sands opened its Pennsylvania resort in 2009 after the state legalized commercial gambling in 2006. The Keystone State further liberalized the market by motioning to allow table games three years later, with then-Governor Ed Rendell (D) signing the expansion into law in early 2010.
Sands Bethlehem is Adelson’s first domestic casino resort not located in Las Vegas, and it’s been a bet that’s paid off greatly for the magnate. Though Pennsylvania’s gaming operators are heavily taxed, the state’s large population has created a thriving market.
Adelson’s property is one of the top performing casinos. During the last fiscal year, Sands Bethlehem took the second-most slots wagers of the state’s 12 casinos ($4.52 billion), and the most gross table gaming revenue ($228.16 million).
Regardless of the casino’s riches, Adelson is apparently ready to depart Pennsylvania, or at the very least interested in hearing pitches.
MGM has been on a domestic spending spree of late, opening a $1.4 billion resort outside of Washington, DC, last year, and is currently building a $950 million casino in Springfield, Massachusetts. The company also recently bought out Boyd Gaming’s 50 percent stake in the Borgata to give the Nevada conglomerate 100 percent ownership of the Atlantic City venue.
Online Gaming Impact
Pennsylvania is facing an escalating budget problem, as Democratic Governor Tom Wolf looks to spend more on education, and expenses to combat a heroin and opioid epidemic balloon.
Marijuana legalization is one area being considered to help create new revenue, but further gambling expansion is also on the table. That includes online gambling, a market that Adelson despises.
In addition to Sands Bethlehem opining that internet casinos would siphon revenues from its land-based floor, Adelson believes it’s his moral mission to oppose online gambling.
But for the man worth over $30 billion, he won’t presumably jump ship in Pennsylvania unless the price is right.
The rumored figure being negotiated between Sands and MGM is $1.3 billion.
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