- MGM Resorts International pulls out of $1.3 billion deal to purchase Bethlehem casino
- Some speculate that it could be caused by changes to Pennsylvania’s gambling regulation
MGM Resorts’ plans to buy Sands Casino Resort Bethlehem for $1.3 billion have reportedly fallen through. It has been alleged that the proposed changes to Pennsylvania’s gambling bill has caused the termination of the deal but, as both parties have yet to comment, it remains speculation as to what the exact reasons are that MGM will no longer be buying the Sands’ Bethlehem.
The Sands’ Bethlehem is one of the most successful casinos in Pennsylvania, so there is no doubting the appeal of such an asset to a famed casino resort business like MGM Resorts.
While it is the smallest casino in the Las Vegas Sands roster, it has had the potential to draw in out-of-state gamblers from Philadelphia and New York City. Indeed, it was only last week that Casinopedia reported how the casino brought in more money in table games revenue than some casinos in Las Vegas during March. The establishment pulled in $21.9 million from roulette, blackjack and craps, among other games.
However, it may be surprising to know that, despite its success, Las Vegas Sands had not yet taken advantage of the commercial property around the casino, and local business owners were hopeful that MGM Resorts would be investing in the opportunity to create a full-service entertainment and retail complex.
So, why did MGM Resorts back out?
While neither MGM Resorts or the Las Vegas Sands have made an official statement, it has been alleged that the changes to Pennsylvania’s proposed gambling laws could be behind the decision. Currently, the state has some of the highest taxes on casino gaming in the United States, and it appears that things could get worse if the state passes legislation to introduce online casinos into its gambling market.
Pennsylvania recently passed its online gambling bill, and it’s tax rates have been criticised by local gambling operators. They are concerned about some of the provisions that sit within the bill, including:
- Online slots and table games will be taxed at 54%
- Online poker will be taxed at 16%
- Licensees will have to pay a fee of $5 million
- Fantasy sports operators will be taxed at a rate of 12%
While Pennsylvania’s online casino regulation could have helped to boost profits for MGM Resorts, the proposed tax rates – as thought by those operators already in Pennsylvania – could have the potential to significantly detract from ultimate earnings. While this has in no way been confirmed as the reason behind the failure of the deal it seems coincidentally well timed with the recent developments in the state’s online regulation.
For now it seems that those players that had hoped to see more development around the Sands’ Bethlehem, will be waiting some time for this to happen. It’s worth noting that Las Vegas Sands had, for some time, been planning a $90 million expansion that included adding a further 100,000 sq ft. Earlier this year Adelson shelved those plans but now, with this deal fallen through, it remains to be seen whether he chooses to re-open the development.
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