Las Vegas Sands announced an agreement Thursday to sell its Bethlehem property to Wind Creek Hospitality, the gaming and entertainment wing of the Poarch Band of Creek Indians of Alabama, for $1.3 billion.
“Sands Bethlehem has become one of the leading regional entertainment and gaming destinations in the United States and we are extremely proud of the positive contributions the property has made for Bethlehem, the Lehigh Valley and Eastern Pennsylvania,” said Sands CEO Sheldon Adelson in a release.
Sands finally finds a buyer
Sands’ PA property was the state’s second highest-grossing casino last year, banking roughly $545 million in slots and table game revenue. But while the venue may be a regional top-performer, it is dwarfed by its parent company’s massive casinos and resorts in Las Vegas, Macau and Singapore.
Sands has reportedly been interested in selling off its Bethlehem property for several years. Last spring the company came close to finalizing a deal with MGM Resorts, but uncertainty surrounding the push for expanded gambling caused the deal to collapse. In October, a New York-based investment firm was said to be interested in making an offer as well.
Who are the Poarch Band of Creek Indians?
The Poarch Band of Creek Indians are a federally recognized tribe consisting of around 3,000 members, most of which live in Escambia County, Alabama.
The group’s gambling arm, Wind Creek Hospitality, operates three casinos and a Greyhound track in Alabama, along with a handful of poker rooms in Florida. In October, the company expanded into the Caribbean with the purchase of the Renaissance Aruba Resort & Casino and the Renaissance Curacao Resort & Casino as well.
Biting off more than they can chew?
Wind Creek’s acquisition of Sands, a venue nearly twice as large as its biggest current holding, represents a huge undertaking for the tribe. In Alabama, the group is only authorized to offer class II bingo-based games, and thus has no experience in operating slot machines or table games. Sands, on the other hand, is one of the state’s largest casinos, spreading 200 table games and over 3,000 slot terminals.
The tribe’s aggressive expansion into Pennsylvania is similar to the move the Mohegan tribe made when it acquired the old Pocono Downs racetrack for $280 million from Penn National in 2005.
Wind Creek may also be interested in purchasing one of the state’s remaining satellite casino licenses, adding even more to its already full plate. Sands’ recent bid on a mini casino was invalidated, due to its planned location’s proximity to Mount Airy’s selection.
The $1.3 billion deal is still subject to approval by the Pennsylvania Gaming Control Board, and could take many months to become finalized. As the group is a new entity in the state, regulators will need to conduct an in-depth investigation into the company’s finances to ensure it has the resources to complete the purchase.
Wind Creek and online gambling
Sands CEO Sheldon Adelson is a staunch opponent of online gambling, and has waged an all-out war in an effort to stop the proliferation of the industry inside the US.
When the state legalized iGaming last year, however, the billionaire largely lost that battle. Even so, it was still very unlikely that the casino would have opened its own branded online gaming site while under Adelson’s control.
The sale of Sands to Wind Creek largely changes that calculus, making it much more likely the casino will open its own internet gambling site. While today’s announcement makes no mention of any plans inside the online gambling space, the tribe would be well-positioned to leverage the casino’s well-known facility and create its own virtual casino.
Gambling expansion throws casino industry in flux
Last October lawmakers passed legislation allowing for the construction of 10 satellite casinos, online gaming, daily fantasy sports and potentially sports betting in the state.
This new reality has seemingly had a huge effect on the PA gambling landscape, likely playing a part in the sale of four casinos just in the past four months.
- December 2017: Penn National announces acquisition of The Meadows Racetrack & Casino
- December 2017: Boyd Gaming purchases Valley Forge Casino
- February 2018: Churchill Downs purchases Presque Isle Downs & Casino from Eldorado
- March 2018: Wind Creek Hospitality announces purchase of Sands Bethlehem
We might soon see further upheaval in the industry, as companies react to the new law, either making effort to expand or to protect themselves from competitors.
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