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Potential MGM/Sands deal makes sense for both parties, analysts say

Casino host city fee fallout in Northampton County

 

The bombshell news that MGM Resorts International is reportedly in talks with Las Vegas Sands Corporation to purchase its Bethlehem casino sent ripples across the Lehigh Valley and the entire gaming industry last week.

Analysts tell WFMZ that the potential deal makes sense for both parties, and fits the current business models of MGM and the Sands.

"I also have confirmed through my sources that MGM is talking to them...it makes a lot of sense", says Roger Gros, the publisher of Global Gaming Business Magazine.

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He notes that MGM is trying to capture the East Coast market, and points out that if the deal takes place, the company would own the most successful casinos in Maryland, New Jersey and Pennsylvania.

Additionally, MGM is building a casino in Springfield, Massachusetts with a reported price tag of $950 million, further reflecting the company's regional approach.

Meanwhile, Sands' corporate strategy is to focus more on international markets, said Gros.

"They have plans to enter Japan and maybe Vietnam with a large casino," he said.

While Sands Bethlehem is the most profitable casino in Pennsylvania, Gros said its relative size makes it "basically…more trouble than it's worth" for Sands. He said if they can get more than a billion dollars for it, as has reportedly been discussed, it is in their interest to sell it.

Casino expert Alan Silver, an assistant professor at Ohio University who also worked as an executive in the industry, gives WFMZ a similar assessment. He described the Sands' casinos in Singapore and Macao as "goldmines" that better reflect the company's strategy moving forward.

Those casinos have high-end baccarat tables and VIP rooms in which players sometimes bet up to a million dollars a hand, Silver said.

Neither Gros nor Silver see the recent unionization of security guards at Sands Bethlehem, a first for any workers in the Sands empire, as a factor in a potential deal to sell the property.

While Sheldon Adelson, the CEO of Las Vegas Sands Corporation, is well known to be hostile to unions, both experts tell WFMZ the guard unionization would likely be seen as a minor irritation to the mogul and not enough of a problem to take such a drastic step as selling the casino.

Gros does believe, however, that Adelson's long-term concern about online gaming in Pennsylvania could possibly factor more into his thinking.

Gros said Adelson is "deadly opposed to that" and could see it as a bigger threat to his success down the road.

The potential legalization of online gambling in Pennsylvania is expected to be taken up by lawmakers in Harrisburg this year.

As for how a potential MGM/Sands deal could affect residents of the Lehigh Valley, both Gros and Silver see the acquisition as a positive.

Silver called MGM "first rate and first class", and said the company has a long history of giving back to the communities it operates in.

In addition, he believes, "they'll feel a commitment to abide by any deals" between the Sands and Bethlehem that are already in place.

Sands employees were notified in an email last week that there is a potential buyer of the casino, but an anonymous source who has worked at Sands Bethlehem since the casino opened told WFMZ that the company has not confirmed to employees that MGM is indeed the interested party.

He added that the mood of the workers he has spoken to is generally positive since the news broke last week.

Neither Sands nor MGM have publicly confirmed the negotiations.

Shop Talk

What's new in the business community!

If you know of local business openings or closings, please notify us here.

· Neighbors Home and Garden Center in Hellertown to close for good after 30 years in business

· Morrison Healthcare on 250 S. 21st Street in Easton will close June 30.

. Dollar General opens at 1167 MacArthur Road in Whitehall Township

· Tower Health Urgent Care to open new location at 1050 East Philadelphia Avenue in Gilbertsville on Wednesday, March 18

· The Flying V food truck plans to open a brick-and-mortar location at 201 Third Street in Bethlehem this summer

· Bow Wow and Meow, a pet store at the Mountainville Shopping Center in Allentown, to close March 20

· Domaci, a Bethlehem-based home furnishings retailer, will be moving from its current location at 21 E. Third Street to the forthcoming Riverport Market at 17 W. 2nd St. in South Bethlehem later this year.

· KidsPeace Clinical Director Dominick DiSalvo appointed to governor's task force studying the Pennsylvania juvenile justice system

· PPL named a 2020 Best Place to Work for LGBTQ Equality, after earning perfect score on Human Rights Campaign Foundation's Corporate Equality Index

· Chad Paul to retire as president and CEO of Ben Franklin Technology Partners of Northeastern Pennsylvania

· Jean-Claude Dubacher has been appointed Chairman and Chief Executive Officer of B. Braun Medical Inc.

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