MGM Resorts in Talks to Buy Sands Bethlehem from Las Vegas Sands Corp
MGM Resorts International is in talks with the Las Vegas Sands Corporation to buy the Sands Casino Resort Bethlethem, the highest-revenue casino in Pennsylvania. Two sources familiar with the negotiations say the talks are serious.
Sands Casino officials spoke with the Pennsyvlania Gaming Control Board this last Thursday to notify the state’s gaming regulators that they were in negotiations with a possible buyer for the Bethlehem casino, which is considered to be in the Philadelphia greater metropolitan area. Gaming Board Commissioner Richard G. Jewell said he received an email from the Las Vegas Sands about the sale.
Sands Bethlehem Sale Price over $1 Billion
If the sale happens, McCall reports that the sale price likely would be over $1 billion. The Sands Bethlehem has been a lucrative casino for Sheldon Adelson since its opening in 2008, though LVS has been unhappy with new taxes levied on them in the past year or so.
MGM Resorts’ East Coast Casinos
Unlike Las Vegas Sands, MGM Resorts is invested heavily in the east coast US casino market. MGM Resorts owns the lucrative Borgata Casino in Atlantic City, which generates almost half of the casino revenue in that troubled gaming city. MGM Springfield is planned for opening in 2018 in Western Massachusetts, while MGM National Harbor opened in December 2016 in Maryland (25 minutes from Washington DC).
MGM Resorts’ purchase of the Sands Bethlehem would allow the company to add another key piece in its east coast casino empire. The four locations could cross-promote to its customer base, while maintaining four separate local operations.
News of the Sands Bethlehem’s Sale
Talks are serious enough that Las Vegas Sands sent an email to thousands of the casino’s employees about the potential sale. No speculation was given for the potential sale, though Sands Bethlehem announced in November 2016 a $90 million casino expension.
In December 2016, Sheldon Adelson lost $3 billion in a matter of minutes, due to an announcement by the Chinese government that it was reducing by 50% the amount of money someone could withdraw from one of China’s biggest banks. The announcement caused a massive sell-off of Las Vegas Sands Corp stock. Sheldon Adelson is thought to be worth more than $25 billion.
LVS’s Troubles with Taxes and Labor Issues
Besides troubles with a local tax imposed by the Pennsylvania State Legislature, the Sands Bethlehem agreed to a union contract with its security staff earlier this year. It was one of the first union contracts LVS ever signed, though it took 6 years of negotiations to settle the bargain.
Sheldon Adelson’s Media Empire
Of course, Sheldon Adelson owns media enterprises in Las Vegas and in Israel. In fact, Adelson owns the Israeli newspaper with the widest circulation, but the paper is distributed free-of-charge. The Adelson Family bought the Las Vegas Review-Journal in November 2015.
Within the past few weeks, Sheldon Adelson withdrew $650 million in funding from the proposed NFL-ready Las Vegas football stadium. Adelson’s pullout put the future of the Oakland Raiders’ proposed move to Las Vegas in some doubt, as his funding was a key part of a $1.7 billion package. At the time, Sheldon Adelson claimed he dropped funding because the Raiders’ owner, Mark Davis, was being selfish in the negotiations.
MGM Resorts and LVS in Macau
MGM Resorts and Las Vegas Sands are two of the largest casino operators in the world. Both have been major players in the Las Vegas casino market for decades. Both invested early in the Macau casino market, which is now the largest gaming destination in the world. From 2004 to 2014, Macau experienced an unprecedented decade of growth, so that the city generated 7 times more revenue than Las Vegas by 2014.
That growth ended abruptly when Chinese President Xi Jinping’s anti-corruption crackdown started probe into the Macau casino market. The junket operator system which underpinned high roller gaming in the city collapsed, as did the high stakes VIP rooms. Stock in Las Vegas Sands, MGM Resorts, Wynn Resorts, and other Macua casino companies dropped in half. Sheldon Adelson went from the 8th-richest person in the world with an estimated $38 billion or $39 billion, to somewhere in the Top 20 billionaires in the world.
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