The $1.3 billion sale of Sands Casino Resort Bethlehem to an Indian tribe from Alabama may be the headline-grabber, but it's far from the only pending transaction in Pennsylvania's evolving gambling industry.
It's actually the fourth.
For one, Boyd Gaming Corp. of Las Vegas is planning to acquire Valley Forge Casino Resort in Montgomery County for $280.5 million, a deal expected to close in the third quarter.
Meanwhile, Churchill Downs Inc. last month announced it is buying Presque Isle Downs & Casino in Erie for $178.9 million in a transaction slated to close in the fourth quarter.
Then, there's the mega-deal: Berks County-based Penn National Gaming Inc. is acquiring Pinnacle Entertainment Inc. for about $2.8 billion. The deal, expected to close in the second half of the year, includes The Meadows Racetrack and Casino near Pittsburgh and will cement Penn National's status as a leading regional casino operator.
So what's with all the deal-making?
While the Penn National deal and Sands Bethlehem sale are their own respective animals, one industry expert sees Pennsylvania's gambling expansion -- specifically one part -- as the primary driver for Boyd and Churchill Downs looking to enter the market.
"When you're talking about Pennsylvania, the answer is primarily related to the online gaming legislation," said Adam Steinberg, an executive vice president at Spectrum Gaming Group, a consulting firm in Linwood, N.J. "That's the big driver."
For their part, Churchill Downs and Boyd basically admitted as much in news releases.
"Presque Isle will give us a foothold in Pennsylvania which has recently passed legislation authorizing real money online gaming," Churchill Downs CEO Bill Carstanjen said.
With Pennsylvania's gambling expansion, Boyd Gaming President and CEO Keith Smith pointed to new opportunities to drive growth at Valley Forge through the "introduction of new forms of gaming."
Meanwhile, Penn National already has a presence in Pennsylvania. And it remains unclear whether online gambling played a role in Wind Creek Hospitality's planned acquisition of Sands Bethlehem, though current owner Las Vegas Sands Corp. — especially Chairman and CEO Sheldon Adelson — has been a firm opponent of online gambling all along.
While many believe the online gambling tax rate in Pennsylvania will be too high as the state begins to roll it out this year, Steinberg says there's a lot to like about the legislation, especially after the success seen in neighboring New Jersey. If nothing else, he added, Pennsylvania is simply the next state to offer online gambling, which represents opportunity to operators.
"Casino companies want to be in locations that have online gaming, so they have the experience to operate when other states start to do it," Steinberg said.
While there are currently four pending casino transactions in Pennsylvania — the country's second-largest commercial casino state — several deals have been made before.
The list includes:
• In 2008, a merger between Harrah's Entertainment Inc. and Hamlet Merger Inc. put Harrah's in Chester under new ownership.
• Also in 2008, a group headed by Chicago billionaire Neil Bluhm took over the Majestic Star casino project in Pittsburgh and renamed it Rivers Casino, which opened in 2009.
• In 2009, the ownership of Mount Airy Casino Resort in Monroe County transferred from Louis DeNaples to his daughter Lisa DeNaples.
• In May 2014, Cannery Casino Resorts announced a deal to sell The Meadows Racetrack and Casino near Pittsburgh to Gaming and Leisure Properties, though the deal didn't officially close until September 2016.
• Presque Isle Downs & Casino in Erie changed hands in 2014, following the merger between MTR Gaming Group Inc. and Eldorado Resorts Inc.