The Poarch Band of Creek Indians owns three tribal casinos in Alabama and are planning a 4th casino in Mississippi.
The Sands Bethlehem Resort & Casino received a 5-year extension to its Pennsylvania gaming license, an event which could signal the sell of the state’s highest revenue land-based casino. Las Vegas Sands Corp. has been in talks with Wind Creek Hospitality of Alabama for a buyout of the Bethlehem, Pennsylvania casino.
In March, reports appeared which suggested Wind Creek Hospitality, the busines name of the Poarch Band of Creek Indians, planned to buy the Sands Bethlehem for $1.3 billion. The Poarch Band wanted assurances their billion-dollar purchase would remain in good standing long enough to pay back the original investment, which it now has.
LVS’s desire to sell its Philadelphia-area resort was no secret. From December 2016 to May 2017, MGM Resorts was in talks with Las Vegas Sands on a reported $1.2 billion to $1.3 billion buyout of Sands Bethlehem.
When those talks fell through, other ancillary investment companies claimed they were working on a purchase of the Bethlehem casino. LVS never confirmed those talks, but it kept speculation going that Sheldon Adelson’s casino company wanted out of the Pennsylvania gaming market.
Why LVS Is Leaving Pennsylvania
Sheldon Adelson has several reasons to leave the Pennsylvania gaming market. The one most cited is Adelson’s dislike of online gambling. In 2014, Sheldon Adelson said he would spend “whatever it takes” to ban online gambling in the United States. Though Adelson has made more money ($38 billion) as a casino owner than anyone in history, he said online gambling is dangerous to problem gamblers and underage gamblers.
To support his cause, Adelson created the Coalition to Stop Internet Gambling (CSIG). The CSIG funded lobbying efforts and attack ads in Pennsylvania and beyond, trying to stop the spread of online gambling. Meanwhile, Adelson recruited a number of US congressmen to support Restore America’s Wire Act (RAWA) — a bill which would have banned online casinos and poker sites throughout all 50 states.
Restore America’s Wire Act
Adelson’s list of congressional allies included US Senator Lindsey Graham (R-South Carolina), US Sen. Marco Rubio (R-Florida), former US Rep. Jason Chaffetz (R-Utah), retiring US Rep. Charlie Dent (R-Pennsylvania), and even US Sen. Dianne Feinstein (D-California). Rep. Chaffetz held several hearings to push a vote on RAWA, but the bill failed to gain traction in the US Congress.
Several key conservative voices criticized RAWA as a vast expansion of federal authority at the expense of states rights, including US Sen. Rand Paul (R-Kentucky), former US Rep. Ron Paul (R-Texas), and famous anti-tax advocate Grover Norquist (Americans For Tax Reform, NRA, American Conservative Union). The congressional debate culminated in a disastrous December 2015 hearing in front of Chaffetz’s House Oversight Committee, which failed so badly that Chaffetz had someone else chair the second half of the meeting.
Pennsylvania Online Gambling
The Coalition to Stop Internet Gambling had worse results in Pennsylvania. In October 2017, Pennsylvania Governor Tom Wolf (D) signed a bill passed in the Republican-led Pennsylvania legislature that would expand gambling in the state. The budget bill’s gambling provisions included legalized online casinos, online poker, daily fantasy sports sites, up to 10 land-based mini-casinos, truck stop gambling machines, and airport tablet computer gambling.
The bill was designed to please land-based casino operators, because it gave them the right to build one of the 10 satellite casinos in less-populated areas of the state. Even that went badly for Las Vegas Sands, because when Bethlehem Sands won the 4th auction, it’s plans to place a casino in Western Pennsylvania were thwarted when their bid overlapped with the Mt. Airy Casino mini-casino’s bid for New Castle.
Las Vegas Sands bid was disallowed — and the company declined to bid on later auctions.
Next, word spread that Pennsylvania gaming regulators were in discussions to join the Multi State Internet Gaming Association (MSIGA), an interstate poker network which includes Nevada, Delaware, and New Jersey. The shared poker liquidity agreement makes online card sites in those four states more valuable and goes to the heart of Adelson’s anti-online gambling campaign. With each state that joins, more congressmen would have vested interests in protecting online gambling.
Local Casino Taxes, Union Troubles
Pennsylvania online gambling and botched satellite casino bids were not the only concerns Sheldon Adelson had. For the past several years, the top land-based casino operators have challenged a local casino tax of $10 million a year in the Pennsylvania court system. Bethlehem Sands sometimes have withheld payments of the local gaming tax (placing the money in escrow).
Also, Las Vegas Sands was not happy when the Bethlehem Sands staff unionized in January 2017. Bethlehem Sands became the first of Sheldon Adelson’s casino properties to have a union.
Why the Poarch Band Wants to Buy Sands Bethlehem
With so many factors seeming to go against Las Vegas Sands, it was a matter of time before the company sold its Pennsylvania casino. The Poarch Band of Creek Indians sees an opportunity to buy the casino with the largest revenue stream in Pennsylvania, which is one of the leading gaming jurisdictions in the United States.
For the Poarch Band of Creek Indians, who are no strangers to controversy in Alabama, the ability to buy a lucrative land-based casino and get in on the ground floor of online casinos and online poker might sound like a boon. The auction process for the Category 4 mini-casinos appears to have ended, but it the Pennsylvania Gaming Commission reluctantly ended the auction process — so it is possible that the Poarch Band might be able to secure another casino license.
The Pennsylvania Gaming Commissioner’s 7-member panel voted unanimously to approve the Sands Bethlehem Resort & Casino’s five-year license extension. The path seems cleared for the long-discussed buyout by Wind Creek Hospitality.
