Inside Gaming: MGM Reportedly Agrees to Purchase Sands Bethlehem
This week's installment of Inside Gaming shares a report regarding a major casino deal in the works between two of the industry's major players, tells of some renovation plans at the Palms, and reports that the smoking ban issue has flared up again in Macau.
Report: MGM Agrees to Purchase of Sands Bethlehem
A week ago came the first inklings that the second-largest casino operator might be interested in buying a property from the world's largest, as MGM Resorts International was showing interest in perhaps purchasing the Sands Casino Resort Bethlehem in Pennsylvania from Las Vegas Sands.
The Morning Call of Allentown was among the outlets reporting a week ago that Pennsylvania gaming officials had confirmed a deal was in the works and that Sands Bethlehem had already notified its employees of the possibility.
Then on Wednesday came a follow-up report that a deal had been reached, with "an agreement in principle" having been made for MGM to purchase Sands Bethlehem for "about $1.3 billion," reports the Call.
The deal may still take another six months to close, with the sale also ultimately requiring approval from the Pennsylvania Gaming Control Board. According to PGCB spokesman Richard McGarvey, "a sale would trigger a several-month process in which the principals of the new company would be investigatedby the board before they could assume Sands' gaming license."
Neither MGM nor Las Vegas Sands commented specifically on the deal.
Buying Sands Bethlehem would enable MGM to continue to expand its East Coast footprint. In June 2016, MGM acquired the Borgata Hotel Casino & Spa in Atlantic City by purchasing Boyd Gaming's 50 percent share for $900 million.
Even though nothing has been finalized, speculators are already judging the deal as a positive move for both sides.
"For MGM, the transaction would expand a northeast presence that has grown significantly over the past year," explains Carlo Santarelli, managing director of Deutsche Bank Securities Gaming and Leisure, adding as well that "LVS [would shed] an asset which has already produced a significant [return on invested capital] and strengthens the capital return potential story."
With 2,500 employees, Sands Bethlehem first opened in 2009 and currently attracts 25,000 people per day and nine million visitors per year, according to the Call.
For more speculation about the possible deal and how it might affect the Sands Bethlehem property, check out the latest from The Morning Call.
Station Casinos to Renovate Slots at Palms
In Las Vegas, Station Casinos told Nevada regulators this week of the company's plans to introduce various upgrades to the Palms Casino Resort, including renovating a cafe and buffet and installing 280 new slot machines, a story shared by CDC Gaming Reports.
It was in May 2016 that Red Rock Resorts Inc., parent company of Stations Casinos, announced the deal to acquire the Palms for a purchase price of $312.5 million. After receiving approval from the Nevada Gaming Control Board, that deal was finalized in October 2016.
Mark Falcone, Executive Vice President and Chief Financial Officer for Station Casinos and Fertitta Entertainment, was back before the NGCB this week for "an amended order of registration involving existing credit agreements" that was unanimously recommended. While there Falcone additionally discussed adding the slot machines and other planned improvements.
Located on West Flamingo Road in close proximity to the Rio All-Suite Hotel and Casino, the Palms is a much-frequented spot by poker players during the World Series of Poker each summer.
For more on the planned-for upgrades, visit CDC Gaming Reports.
Macau Casinos Revisiting Possibility of Full Smoking Ban
It was nearly three years ago that a smoking ban in mass-market areas in Macau — including casinos — was first instituted. Less than a year later began debates to institute a full smoking ban in casinos, including in segregated VIP areas, although in the face of what would turn out to be a two year-plus decline in revenue no such ban was implemented.
Now with Macau enjoying a slight rebound in gaming revenue — including a seventh-straight increase in February of 17.8 percent year-over-year (exceeding industry estimates) — talk of a full smoking ban has been revived, with some employees in the Macau's casinos making it known they would support such a prohibition.
Macau Business reported this week results from a survey of gaming workers conducted by the Macau Gaming Enterprises Staff Association of the Federation of Trade Unions. Of nearly 2,000 respondents, nearly 69 percent favored a full smoking ban, with only a little less than 30 percent favoring allowing smoking lounges.
Additionally, almost 61 percent of those taking the survey "noted cases of casinos violating smoking regulations."
A drafted bill proposing a full ban is currently under consideration by the Macau Special Administration Region government who has already announced plans to alter the proposal to allow smoking lounges. That announcement by the MSAR government came in association with a different survey indicating 60 percent of more than 14,000 "gaming and non-gaming employees" agreed with "solutions that allow smoking lounges."
Read more about efforts to clear the air over the smoking ban issue at Macau Business.
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