Sands Bethlehem in Pennsylvania Sold to Alabama Tribe for $1.3 Billion
Posted on: March 8, 2018, 04:00h.
Last updated on: March 8, 2018, 04:02h.
Sands Bethlehem casino resort in Eastern Pennsylvania is set to be sold for $1.3 billion to the Poarch Band of Creek Indians of Alabama. The tribe’s gaming subsidiary, Wind Creek Hospitality, is named as the official buyer.
The Bethlehem property is Las Vegas Sands’ only US casino outside Nevada. Founded by billionaire Sheldon Adelson, the company is apparently ready to focus on its Macau and Las Vegas operations and forgo the regional enterprise.
Adelson said in a statement that he’s “extremely proud of the positive contributions the property has made” for the region. That entails not only generating thousands of jobs in the Lehigh Valley, but also restoring and repurposing the former Bethlehem Steel Plant.
Founded in 1857, Bethlehem Steel went bankrupt in 2003. The company manufactured steel that was used in many of the country’s most notable landmarks including the Empire State Building and Chrysler Building, Golden Gate Bridge, Rockefeller Center, Madison Square Garden, and Nevada’s Hoover Dam.
Wind Creek Hospitality operates three casino hotels and one greyhound parimutuel facility in Alabama, a poker room and greyhound track in the Florida Panhandle, casino in Gardnerville, Nevada, and gaming resorts on the Caribbean islands of Curacao and Aruba.
The Bethlehem deal is subject to state regulatory review before the acquisition can be finalized. The property is set to be renamed Wind Creek Bethlehem.
Line in the Sand
Sheldon Adelson is no fan of online gambling. The billionaire declared in 2013 that he would spend “whatever it takes” to outlaw internet casinos. To date, he’s been quite unsuccessful.
Thought to be at Adelson’s request in exchange for continued campaign contributions, Senator Lindsey Graham (R-South Carolina) and former US Rep. Jason Chaffetz (R-Utah) introduced legislation that sought to reverse a 2011 Wire Act opinion made by the Department of Justice that essentially paved the way for states to set their own internet gaming laws. But the bills received little support, and never reached a vote in either chamber.
Last fall, Pennsylvania’s General Assembly and Governor Tom Wolf (D) signed off on a massive gaming expansion package that included the legalization of online casinos.
As reports surfaced in early 2017 that state politicians were considering various gaming legislative measures in order to help bridge a $2.2 billion budget funding gap, Adelson began courting offers for Sands Bethlehem. MGM Resorts was rumored to be in talks to acquire the resort, but the deal fell through in May.
Las Vegas Sands built the Bethlehem casino and hotel at a cost of around $800 million. The complex was planning a $90 million expansion last year, but was halted during the same time MGM reportedly expressed interest in a takeover.
Since the 2009 opening of Sands Bethlehem, the casino has delivered strong returns for the parent company. That included last year, where net revenues climbed $8 million to $579 million, and earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 4.26 percent.
Combined with internet casinos, and the outlook once again promising in Macau, and Sands’ Marina Bay integrated resort in Singapore delivering “outstanding financial results” per Adelson, the company is perhaps looking to reinvest in more robust markets.
Sands China, the company’s Chinese operating unit, delivered $1.66 billion, or 48 percent of Las Vegas Sands’ total $3.46 billion operating income in 2017. CFO Patrick Dumont said in the Bethlehem statement, “While many options exist for the use of the sale proceeds, the most likely use would be consistent with the company’s long-held strategic direction when it comes to deploying capital.”
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