One of Pennsylvania’s top casinos officially has a new owner.
On Monday, Wind Creek Hospitality, an authority of the Poarch Band of Creek Indians of Alabama, announced that it closed on its $1.3 billion purchase of Sands Bethlehem in Pennsylvania. The property will be rebranded as Wind Creek Bethlehem. WCH also acquired the 150k-square-foot retail mall and the property’s multi-purpose event center, along with the 282-room hotel.
WCH funded the acquisition with a combination of existing cash on its balance sheet and new debt financing. WCH plans to invest $340 mm into the property “over time,” including a new 300-room hotel adjacent to the casino, among other amenities.
In a statement, Las Vegas Sands chairman and CEO Sheldon Adelson said that the sale “represents an important milestone in our company’s long-term strategy and allows us to focus on what we do best.” He referenced overseas casino gambling markets as the company’s focus.
It’s worth noting that Pennsylvania legalized online casino gambling in late 2017, to the displeasure of Adelson, a longtime online casino opponent. LVS reportedly had the casino on the market for several years prior to the new online gambling law, but the authorization of those games undoubtedly didn’t help the PA market remain attractive for Adelson and LVS, the largest casino developer in the world in terms of revenues. Adelson reached a deal to cash out of PA despite the state being an early mover on sports betting. The 36% effective tax rate for sports wagering revenues surely wasn’t attractive.
Wind Creek’s sports betting plans
The Pennsylvania Gaming Control Board held a hearing on May 29 in Harrisburg to go over WCH’s plans for the casino. The regulatory hearing was a necessary step before LVS and WCH could close on the high-stakes deal, which was announced in early 2018.
WCH is still mulling over its options for sports wagering partners, the casino told the PGCB at the hours-long hearing. The tribe hasn’t filed for a $10 mm sports wagering certificate yet. WCH acquired the online casino license that Sands applied for and was awarded, so Wind Creek Bethlehem will be a player in the online casino space. The tribe told regulators that it plans to offer online slots, table games, and poker. It doesn’t have an online casino partner yet, it told the PGCB.
“We’re actively working with a couple of providers to become a partner with us so that we can launch that maybe three months or so after closing,” Arthur Mothershed, vice president of business development for the tribe, told the PGCB. At a hearing earlier this year, the PGCB said that the state’s first online casino (possibly multiple) will launch in mid-July. If Wind Creek Bethlehem’s timeline holds true, it would launch online casino gambling this fall.
Sports betting is more up in the air for Wind Creek Bethlehem, though it does look like the tribe will bite the bullet and go for the new offering, despite the high tax rate and the $10 mm fee.
“As for sports betting, we’re not quite as far along in negotiations there, although we have identified a couple of prominent providers that we think would help us in that arena,” Mothershed said. “We are negotiating with some sports betting providers, and we’re analyzing the revenues that we believe can come from that and trying to work out an amicable agreement between us and them, and hopefully identify one fairly soon after closing.”
In the presentation to the PGCB, WCH spelled it out this way: The tribe is “actively continuing to analyze the available sports wagering revenue information in real-time, including the bottom line impact sports wagering has had on operators in other jurisdictions where mobile sports wagering has also commenced.”
Wind Creek Bethlehem appears to be a solid favorite to apply for a $10 mm sports wagering certificate, but it doesn’t sound like it’s a foregone conclusion.
The state’s first online sportsbook launched last week, with more expected to launch in the coming weeks. The state is home to eight b&m sportsbooks as well, so if/when Wind Creek Bethlehem launches sports betting, it will have competition. The casino is also close to the PA-NJ border.
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