Keating & Associates Interested in Buying Bethlehem Sands

Bethlehem Sands Sold Keating & Associates

MGM Resorts discussed buying Sands Bethlehem in December 2016.

Keating & Associates LLC, a New York City private equity firm, is reported to be in discussiosn with Las Vegas Sands Corp. to buy the Sands Bethlehem Resort and Casino. The Sands Bethlehem, which is located in a suburb of Philadelphia, is the biggest land-based casino in Pennsylvania.

Alex Fredericks, Keating’s chief strategist, said in an interview with WFMZ News-69, which serves the Philadelphia, Berks County, and Lehigh Valley regions, “We suspect in the next 30 days we’ll tender a very serious offer.”

The spokesman noted that the deal is not finalized, so the details remain scarce. The lack of detail and the newness of Keating & Associates to the casino industry generated a certain amount of intrigue and mystery to the announcement.

So far, Las Vegas Sands has not commented on Keating & Associates’ interest.

Keating & Associates’ Profile

Fredericks described Keating & Associates as a “relatively new” firm which invests in the hospitality, food and beverage, and gaming sectors. Mr. Fredericks did not reveal any of the firm’s holdings, but did say that Keating did not own any casinos at the moment.

The spokeman said his company wants to focus on East Coast acquisitions, but eventually wanted to expand as far west as Las Vegas. Fredericks mentioned Miami as one of the East Coast locations that Keating saw as a possible focus.

Those who follow the gaming industry might remember that Keating & Associates offered $225 million for the closed Revel Casino. The Revel’s owner at the time, Glenn Straub, said he was unaware that an offer had been made for his property.

Keating’s Interest in Revel Casino

Alex Fredericks noted that the private equity firm stilled planned to purchase the Revel Building. Straub later entered into discussion with Integrated Properties of Colorado about selling the Revel Building.

When asked about the company’s goals, Alex Fredericks said his company was finalizing its offer for Revel, but Keating only wanted “to create opportunity”.

Fredericks said that Jeff Keating, the co-founder of Keating & Associates, had met with Glenn Straub to discuss a purchase of the Atlantic City property. He told WFMZ in another interview that Glenn Straub might have denied the meeting as a “business ploy”. Those familiar with Straub’s dealings in Atlantic City would describe him as savvy, though it is unknown what he might gain from such a ploy.

Bethlehem Sands Worth $1.3 Billion

Bethlehem Sands is expected to cost considerably more than the Revel Casino, because the casino is the most lucrative gaming venue in the state. In December 2016, MGM Resorts entered into negotiations with Las Vegas Sands Corps for the Bethlehem property. The price being discussed was $1.3 billion.

MGM Resorts Deal Fell Through

Eventually, that deal fell through, though the details for why it did remain sketchy. Some speculation centered around the Pennsylvania tax structure, because of an ongoing case in the Pennsylvania Supreme Court which involved taxes for local municipalities. Another question might have centered around discussion of video gambling terminals (VGTs) in Pennsylvania, which were a part of a potential omnibus gambling bill.

That gambling bill fell apart, while VGT legislation seemed like a longshot even before that. Whatever the case, MGM Resorts pulled out of the deal 2 to 3 months after it was first discussed. Though VGT legalization seems unlikely, the future of online gambling, satellite casinos, and other issues cloud the Pennsylvania land-based and Internet casino market for the time being.

Keating & Associates’ Operating Procedures

Such considerations do not to have lessened the interest by Keating & Associates. Of course, the group announced its interest in another casino last month, but nothing ever came of that announcement. In fact, the seller in that case never admitted he had received a formal offer — or even heard from Keating & Associates. Something would appear to be unstable in that situation, though the fault might not be Keating’s. Some disappointed workers and officials in New Jersey claim that Glenn Straub simply wanted to buy the Revel Building simply to flip it, though no one can prove such charges.

The Bethlehem Sands offer could prove illuminating, for that reason. If nothing ever comes of this current offer by the New York based firm, then it can be said that Keating & Associates occasionally makes a bold announcement about buying a casino, only to garner publicity. But if it is learned the Las Vegas Sands Corp received a real bid with substantial figures involved, then the land-based casino industry on the East Coast might have a new major player in Keating & Associates.