Since its inception in 2009, Sands Bethlehem was unlike any other property owned by Las Vegas Sands. A regional casino, it bore little resemblance to the massive integrated resorts the company developed in Las Vegas, Macau and Singapore. But over the years, with frequent expansions, it began to fit in. And today, it’s the most successful of Pennsylvania’s 12 casinos.
But there was still something that didn’t fit. And last week, there was the first indication that its time with Las Vegas Sands maybe slipping away. Sands Bethlehem CEO Mark Juliano sent a note to his employees that there was a potential buyer for the property, while cautioning, “the sale is not imminent, and there is a lot of work that still needs to be done before a sale is final.”
Juliano didn’t answer any press inquiries, referring them to the corporate communications office in Las Vegas, which issued the following statement: “Las Vegas Sands is regularly approached about potential interest in various assets. The company has no announcement to make at this time.”
Sources tell GGB News, however, that the buyer in question is MGM Resorts. The company has been making a very aggressive east coast push lately. Last year, it bought the 50 percent of the Borgata that was owned by Boyd Gaming and has taken over management of that property. In December, MGM National Harbor opened in Prince Georges County, Maryland, just outside of Washington D.C. One month later, it was the largest grossing casino in the state. It’s building a $1 billion resort in Springfield, Massachusetts slated to open in 2019, and has a strong interest in current talks to introduce gaming in Georgia—although that effort appears dead for this year.
Despite generating the highest gross gaming revenue in the state, Sands Bethlehem was still a minor cog in the Las Vegas Sands wheel. Several years ago, speculation about the fate the property was put aside when LVS appointed Juliano, a top executive at Marina Bay Sands in Singapore, as CEO, and scheduled additional expansions. Juliano recently announced another $90 million addition just four months ago.
But just last week, the property’s 146 security guards successfully completed negotiations to organize with a union. LVS Chairman Sheldon Adelson has a well-known dislike for unions and has conducted a long-standing running battle with the most successful labor union in Las Vegas, Local 26 of UNITE HERE, the culinary workers.
George Bonser, a consultant to the security guards’ union, told the Allentown Morning Call that he was concerned about Adelson’s views all along.
“We know how much Sheldon Adelson hates unions and we talked about it a lot,” Bonser said. “We worried he might try to unload the whole place, but it just seems too drastic. I would hope it didn’t play a role.”
An EBIDTA of $136 million translates to a sale price of $1.2 billion for MGM, which declined to comment on the reports.
Another developing issue in Pennsylvania that may have influenced LVS’ desire to sell is the potential of iGaming in the state. Adelson is adamantly opposed to iGaming, while most of the other operators in the state would welcome it. And the potential revenue could influence legislators. (See USA Gaming for a full explanation of the iGaming proposal and other gaming issues currently being considered by the legislature.)
Sands Bethlehem has been a focal point of the region’s revival after decades of distress after the steel industry declined. The property is actually located on the former site of Bethlehem Steel and the master plan calls for restoration of some of the historic parts of that massive factory. So locals are more than a little concerned about a looming sale.
Bethlehem Mayor Robert Donchez was informed of the possible sale by Juliano, but was also short on details.
“If there is a sale, we certainly want to work with the new owner to develop the rest of the site,” Donchez told the Morning Call. “If not, I would urge the new owner to sell pieces of the property so that others could develop it.”
The security guards’ labor contract was a milestone for the property, however.
Security officers ratified a three-year contract making them the first union workers in the history of Las Vegas Sands Corp.
The 146-member Local 522, an affiliate or the International Union, Security, Police and Fire Professionals of America, approved a contract giving guards an immediate raise of 8 percent and a say in work rules unprecedented for the company. The guards become the only unionized workers among 2,500 at Sands Bethlehem, and in the 57,000-strong workforce of Las Vegas Sands.
The contract ends a six-year fight with Adelson, who has used his billions to oppose the initial 2011 vote by the guards to unionize. Las Vegas Sands appealed the vote to the National Labor Relations Board several times, under claims ranging from union intimidation of employees to vote yes to an appeal claiming guards were already affiliated with the United Steelworkers union.
In 2015, an NLRB panel in Washington, D.C., upheld a 2012 NLRB court ruling ordering Sands to recognize the guard union and to enter into bargaining sessions. An NLRB mediator monitored last week’s voting.
Adelson has vowed his properties would remain non-union since the Venetian was in the planning stages on the Las Vegas Strip in the early 1990s. He built the Venetian on the site of the famed Sands Casino Hotel, which he purchased in 1989 and subsequently imploded. The Venetian and Palazzo remain the only Strip resorts to have resisted the powerful Las Vegas culinary union.
