Las Vegas Sands Corp announced on Thursday that it has entered into a definitive agreement with American Indian tribe Poarch Band of Creek Indians of Alabama to sell its Sands Casino Resort Bethlehem in Pennsylvania for $1.3 billion.
The total enterprise valuation for the deal, including market capitalization and debt, represents one of Sands’ smallest resort casinos but will become one of the largest sales in Lehigh Valley’s history.
Sands Bethlehem Running A Successful Operation
When Sands Casino Resort Bethlehem opened at the site of what was then Bethlehem Steel’s headquarters plant in 2009, the $800-million property became a gambling destination for New York and New Jersey gamblers. The property also turned into a favorite travel destination for residents and domestic tourists who enjoyed its shopping mall, performing arts venue, and 300-room hotel. Sands has also made quite an impact on the area, having generated more than 2,500 jobs, boosted tourism and made a significant economic impact for the community.
Even though Sands Corp has been looking to sell the Bethlehem casino for a while, it wasn’t because the casino was going through tough times and revenue generated was a problem. To the contrary, the casino has been faring well in Lehigh Valley, bringing in the second highest revenue in Pennsylvania, generating $550 million from slots and table games in 2017.
Sands was also able to secure a mini-casino license for Sands Casino Resort Bethlehem last month when its $9.9 million bid was approved and it won the fourth mini-casino license to build in Pennsylvania. Shortly after they won the bid, the license was invalidated by the board since its choice of location for the mini-casino intruded upon the zone of Mount Airy’s mini-casino. Whether Sands Bethlehem will once again take part in the next round of bidding for a mini-casino license will depend on Sands’ decision as industry observers point out that it will take close to 12 months for the acquisition deal to be ironed out.
Sands Bethlehem Acquisition Subject To Regulatory Approval
Once a change of ownership and control petition is filed by the Sands Casino Resort Bethlehem, the acquisition deal over the property will be subject to a regulatory review by Pennsylvania Gaming Control Board. John Cunnane, a Wall Street gambling and leisure analyst for Stifel, believes the vetting process can take a while since the board will have to review the source of funding and the capability of the tribe to run the casino.
Joseph Weinert, senior vice president of consulting firm Spectrum Gaming Group, echoes Cunnane’s sentiments and adds that the industry will be observing whether the tribe has the means and capability to handle one of the biggest casinos in the Pennsylvania area.
Sands Bethlehem Operations – Big Step Up For Indian Tribe
The tribe owns Wind Creek Hospitality, an entertainment and gambling property that runs three casinos on tribal land in Atmore and Montgomery, Alabama. The casino floors of the Wind Creek establishments are relatively small ranging from 57,000 to 85,000 square feet. This would be a big step up for the tribe as Sands Bethlehem has a 159,000-square-foot casino.
In terms of gaming experience, the tribe runs Class II games composed of bingo-based or pull tab-based machines in all of its Alabama casinos. The Class II designation has enabled the Wind Creek to pocket all of its revenue and grow its funding pool since they don’t have to pay taxes for their games.
This has raised the question of whether the tribe will be able to manage the table games and slot machines at Sands Bethlehem without prior experience. Poarch Creek officials state that they have long wanted to offer table games and slots and the Bethlehem casino acquisition will give them the opportunity to do so. Industry analysts also expect the tribe to keep the existing Bethlehem management team to help them get familiarized with the new market.
Prior to the tribe’s acquisition of Sands Bethlehem, they purchased Renaissance Aruba Resort & Casino and the Renaissance Curacao Resort & Casino from Marriott in October. They also announced in 2017 that they are planning to build a casino on the 35 acres of land they purchased in D’Iberville, Mississippion in 2016.
In a statement, Stephanie Bryan, tribal chair and CEO of Poarch Band of Creek Indians, said “The addition of this fantastic team and property to our portfolio furthers our desire to secure a long and prosperous future for our tribe. We look forward to working with our new team members and the community to cement Wind Creek Bethlehem’s position as the premier entertainment destination in the Northeast.”

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