21, the Sands and Wind Creek’s PCI Gaming Authority filed an official change of ownership petition with the Pennsylvania Gaming Control Board that details how this sale will go down. S Sands Casino is reportedly up for sale. By Matt Assad and Nicole Radzievich, Courtesy of The Morning Call/McClatchy-Tribune Regional News Sands Casino Resort Bethlehem is on the selling block, a source familiar with company thinking told The Morning Call.
Tribe will make $250 million worth of improvements to property
The Pennsylvania Gaming Control Board last week approved the $1.3 billion sale of Sands Casino Resort Bethlehem by Las Vegas Sands Corp. to an arm of Alabama’s Poarch Band of Creek Indians.
The unanimous vote of approval, completed at a special session of the board on Wednesday, clears the way for the closing of the sale, officially by Sands Bethworks Gaming, the partnership of LVS and local investors that owns the license to the property, to PCI (Poarch Creek Indians) Gaming Authority, the arm of the tribe that will be the official licensee.
The board approved the Pennsylvania license for PCI Gaming Authority after approving the sale. PCI is owned by Wind Creek Hospitality, the arm of the tribe that operates its gaming properties. The Bethlehem property, built on the historic site of the Bethlehem Steel Works, is the tribe’s first venture outside of its Alabama Class II properties, and its first commercial venture.
The vote came a full 14 months after the sale of the Sands was announced, its delay due to a particularly crowded agenda this year for Pennsylvania regulators, with the ramp-up of sports betting, mini-casinos, truck stop VGTs and online gaming in the wake of the massive gaming expansion bill passed at the end of 2017.
Las Vegas Sands was represented by Duane Morris LLP partners Scott Kramer, Greg Duffy, of the Philadelphia office and Frank DiGiacomo, Chris Soriano, and Adam Berger, of the Cherry Hill office.
In the meantime, the iconic “Sands” logo has been removed from the entrance to the property, to be replaced by the property’s new name, Wind Creek Bethlehem. The tribe has designated $15 million to complete rebranding expenditures, which it predicts will be complete within 90 days.
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With the last remaining hurdle to the sale’s closing removed, the tribe has pledged to immediately begin improvements that had been stalled under LVS, beginning with a $90 million hotel expansion project and continuing with stalled projects to preserve and utilize some of the historic sites of the former steel plant. former Bethlehem Steel No. 2 Machine Shop into a 300,000-square-foot indoor adventure/water park and hotel. Conceptual renderings show the long, vacant building transformed into a gigantic greenhouse-like structure between the SteelStacks and casino.
The tribe has pledged $100 million for the Machine Shop transformation, in addition to the $90 million hotel expansion. However, media reports indicate that the Poarch Band has set aside $250 million for the water park and adjoining hotel.
Within the park will be about 105,000 square feet of water rides, along with other activities like rock-climbing and zip lines, according to the plans submitted with the state.
According to plans submitted to the board, it will take the tribe about two years to build a 276-room hotel along with another 42,000 square feet of meeting space. That project will complement the Bethlehem property’s existing 282-room casino hotel and about 27,000 square feet of meeting space.
Wind Creek’s acquisition financing includes $100 million for the Machine Shop redevelopment, but the operator reportedly will seek development partners to secure the remaining $150 million for the overall expansion.
PCI Gaming will pay the state $3.75 million for its change-of-control fee. The final closing of the sale was expected as early as Friday. “It’s been a long haul for us,” Wind Creek President and CEO Jay Dorris told the Allentown Morning Call. “We’re thrilled, and we’re ready to hit the ground and introduce Wind Creek Bethlehem.”
[toc]When two casino magnates strike a deal, it is quite literally a big deal.
Earlier this month, Bethlehem’sWFMZ talked with several officials involved in the transfer of the Sands Casino Resort Bethlehem from Sands Corporation to MGM International.
The deal could be done in as few as six months, but there’s a good chance it could be longer considering the intricate web of regulations involved.
At the center of the deal is the Pennsylvania Gaming Control Board, which will oversee the transaction.
“We want to make sure the facilities are financially sound because of the partnership these casinos have with the Commonwealth,” said PGCB Communications Director Doug Harbach, estimating these processes could take at least six months.
“We want to make sure these facilities are safe for the patrons, and we want to make sure the games are fair.”
Why will the Sands-MGM deal take so long?
The quick answer is regulation.
Sands and MGM are massive organizations. State protocol says the PGCB has to vet both companies to approve the acquisition.
Harbach told WFMZ that because MGM doesn’t operate a casino in the state, investigators have to start “from the ground up” and research MGM’s operations, its “financial records,” “diversity practices,” and the “backgrounds of the individuals who work for MGM.”
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Sands email first indicated sale to MGM
The Motley Fool reported on March 22 that Sands President Robert G. Goldstein sent an email to employees indicating a sale was in the works to a single buyer.
The assumption was that MGM was that buyer. Earlier in the month, the company was reportedly “willing to pay $1.3 billion for the resort.”
What’s interesting about MGM is that, according to Motley Fool, most of the company’s revenue comes from US casinos. Sands relies on tables and slots at its Macau properties.
The Sands sale makes sense considering both organizations’ business models, and MGM is wise to acquire the Sands. It is Pennsylvania’s second-highest grossing casino in this fiscal year.
In fact, the Sands topped Parx for the most table games revenue in February.
The casino’s $18.72 million take in February marked a 6.99 percent increase over the previous year. Parx saw 2.82 percent growth in revenue.
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