MGM Makes Deal To Buy Adelson's Pennsylvania Casino: ReportDeal Could Be Worth About $1.3 Billion |
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MGM Resorts International has agreed in principle to acquire Las Vegas Sands’ casino in Pennsylvania for about $1.3 billion, according to a report from The Morning Call.
Sands Casino Resort Bethlehem is one of 12 casinos in the Keystone State. The casino won $230 million from table games last year, about $70 million over Parx Casino, its closest competitor. The $230 million was a 7.3 percent gain year-over-year for Sands Bethlehem.
The state’s entire market for table games was $853 million last year.
As for slot machines, Sands Bethlehem took in $305 million, which was 1.8 percent better compared to 2015. Parx won $390 million from slot machines last year.
So, if the $1.3 billion price tag for Sands Bethlehem holds up, it would be about 2.4 times 2016 gaming revenue. The report had a relatively negligible impact on both MGM and Sands stock.
The casino, the smallest of its kind in the Sands portfolio, did have a rough fourth quarter last year. Net revenue of $139 million was 0.7 percent less than in Q4 of 2015.
Pennsylvania kicked off casino gambling just 10 years ago, and there have been efforts over the past few years to bring the games to the internet. Adelson, founder and CEO of Sands, is against online poker. His exit from Pennsylvania could bolster the state’s iGaming chances.
Parx, which is the largest casino in the state in terms of gaming win, appears to be the only other property that opposes internet betting. MGM is very much for online casinos.
Sands Bethlehem opened in 2009, with total investment later growing to $830 million. Adelson in 2010 expressed regret that he had built the casino and later tried to shop it around.
Sands the parent company makes the majority of its money these days in Asia. The casino giant last year had net revenue of $11.41 billion. Net Income was $2.02 billion.
MGM is the world’s second largest casino company with about $10 billion a year in revenue.
MGM has been busy of late domestically. The firm opened its $1.4 billion MGM National Harbor late last year, and it’s in the middle of construction for a nearly $1 billion casino in Springfield, Massachusetts.
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