MGM antes up for Sands Bethlehem; Glenn Straub, man of mystery

Last week’s premature announcement by Sands Bethlehem President Mark Juliano that a sale, probably to MGM Resorts International, may have redounded to Las Vegas Sands‘ benefit. The reported sale price has crept up to $1.3 billion. Since a sale would require several weeks of due diligence before being formally announced, Sands and MGM have continue pretending that nothing is going on. However, two sources tell the Allentown Morning Call that the deal is practically done. The news has Wall Street analysts salivating. Some speculate that MGM could step aside and let its REIT handle the transaction. The lion could also scarf up Sands Bethlehem’s player database and feed it into Mlife.

Wrote Deutsche Bank analyst Carlo Santarelli, “For MGM, the transaction would expand a northeast presence that has grown significantly over the past year, while [MGM Growth Properties] potentially benefits from a new rent stream. LVS sheds an asset which has already produced a significant [ROI] and strengthens the capital return potential story.” It could also be a ‘win’ for Bethlehem Mayor Robert Donchez, who has long tried in vain to get Sands to develop more of its site. “The buyer might be more willing to consider developing it, or at least selling it off to someone who will,” he told the paper. According to the Morning Call, Sheldon Adelson has been quietly shopping the megaresort around for three years. It’s surprising it took him so long to find a taker. The MGM revelation comes as the Pennsylvania Legislature takes up consideration of Internet gambling — poison to Adelson, who sent a lackey to testify against it. MGM, of course, is already involved in I-gaming by dint of its Borgata ownership. (Keystone State Gov. Tom Wolf [D] keeps calling for increased revenue to cover a $150 million budget hole but is no help whatsoever in explaining from where he’ll get the money.)

It was business as usual at Sands Bethlehem … hosting the annual tattoo convention. As for the Las Vegas Review-Journal, it continues to pretend this story isn’t happening.

* “Casino license? Don’t need one. Alternative tax payment? I’ll pass. Power plant debt? Not my problem. Fees to spruce up the neighborhood? No thanks,” writes Wayne Parry of The Associated Press, describing maverick casino owner Glenn Straub, whose latest gambit is to opt out of the PILOT program (Payment in Lieu of Taxes) to which all other casinos subscribe. “I’d be broke,” is Straub’s explanation for his fierce dissent from the status quo, adding, “They don’t know how to not rape you. It’s like when you come to New Jersey, you have to take all your clothes off and burn all your money.”

Given that outlook, one wonders why Straub persists with his reinvention of Revel as Ten. Surely a man of his accomplishments and years doesn’t need the hassle. (Straub’s people will tell you that too.) He could — and might — lay off Revel on prospective casino operator Robert Landino, but the latter, who’s allegedly being investigated by the FBI for unrelated business dealings, would have a harder time getting licensed than Straub. In fact there’s no reason to believe Straub wouldn’t get licensed (as Morris Bailey was at Resorts Atlantic City) as landlord. He just doesn’t feel it’s necessary, even an affront.

For the state’s part, New Jersey Casino Control Commission Chairman Matt Levinson says the long-deferred reopening of Revel as “Ten” would be happening … if Straub would stop suing the state. Considering how strongly held Straub’s convictions in these matters are, and how cheaply he got Revel, it seems almost inevitable that he’s going to flip it rather than bow to the Garden State.

* Station Casinos has big plans for the Palms, including a reconfiguration of the gaming floor that will make room for 280 more slot machines. As we mentioned, the long-suffering buffet (or maybe it is the diners who suffer) is due for a makeover, but that will have to wait until the cafe is fixed. We commend Station for working so hard to put its stamp on the newest member of the family.

* If you enjoy a good paradox, try to explain why Macao has added 330 gambling tables since late 2013 and yet dealers are currently at their lowest workforce size in the same period. Could operators be trying to make up for recent salary increases by doing more with less manpower?

This entry was posted in Atlantic City, Economy, Glenn Straub, Macau, Marketing, MGM Mirage, Palms, Pennsylvania, Revel, Sheldon Adelson, Station Casinos, Taxes, Wall Street. Bookmark the permalink.