MGM Resorts International is said to be making a bid to buy one of Pennsylvania’s most successful casinos, Sands Bethlehem Casino Resort. Sands Casino officials informed the Pennsylvania Gaming Control Board last week of the ongoing talks, according to Gaming Board Commissioner Richard G. Jewell. Sands Casino also informed its employees of the bid via an email.
Operated by Las Vegas Sands, Sands Bethlehem is the only regional casino amongst the company’s extensive portfolio of destination resorts spread across Macau, Las Vegas and Singapore. While MGM also has casino resorts in these gambling hubs, it has stronger focus on regional markets, having large projects in Massachusetts, Maryland and New Jersey.
Sands Bethlehem CEO Mark Juliano said that the sale was not confirmed as yet, as there was further work to be done. The parent company has also refused to comment on the issue. Ron Reese, Las Vegas Sands spokesman said that the company is often approached with bids and that there was no announcement to be made as of now.
According to experts, the sale would make sense to Las Vegas Sands which follows a strategy of developing resorts in fly-in destinations. Sands Bethlehem is its smallest property and the only one located in a regional location. Sands Bethlehem was launched in 2009 after which Las Vegas Sands’ chairman Sheldon Adelson reportedly expressed regrets for building a regional casino instead of sticking to the destination resorts model. Market analysts expect the casino to attract a high price.
John Decree, senior analyst for Union Gaming Securities, stated that a casino such as Sands Casino would draw a value that’s up to nine times its annual earnings before interest, tax, depreciation and amortization costs. The company had an EBITDA of $136 million in 2016, as per its annual report, which puts its value in the region of $1.2 billion.
In a statement John Decree said,
“The sale of Sands seems to come up every six months, but this is a casino with a squeaky clean balance sheet that isn’t going to sell to a low-ball offer. That casino will fetch north of $1 billion. And if they don’t get their number, they probably won’t let it go”
The deal has come at a time when state’s legislators are set to start evaluating whether all forms of gambling including online gaming can be legalized in Pennsylvania, a move that’s opposed by Las Vegas Sands.