A Wall Street Journal story last week lays the blame for the new Department of Justice opinion on the Wire Act squarely on Sheldon Adelson’s shoulders.
The article revealed that the new, much more stringent opinion presents an argument about the Wire Act that strongly mirrors a memo from Adelson lobbyists. The memo initially went to the Criminal Division. That group eventually forwarded it along to the Office of Legal Counsel. This is not a standard flow of information at the DOJ.
Neither Adelson nor the DOJ confirmed the WSJ story.
Nonetheless, the story confirms what many suspected as soon as the new opinion came down. After all, Adelson’s anti-online gambling lobby had a press release ready to go as soon as the opinion came down.
Adelson’s actions are not surprising to the gambling community. However, one does have to wonder how happy the Poarch Creek Band of Indians must feel about this latest effort.
New Sands Bethlehem owners probably not happy with DOJ
To remind you, the Poarch Creek Band of Indians own Wind Creek Entertainment. That is the company finalizing its purchase of Sands Bethlehem for $1.3 billion.
Besides its two properties in Nevada, Sands Bethlehem was the only other American casino in Sands Corporation’s portfolio. Always an oddball property for the company, the PA casino was rumored for sale to MGM Resorts prior to selling to Wind Creek.
When the state debated online gambling expansion both Sands and Parx Casino pushed back against it. However, while Parx decided it could not beat them and joined gambling expansion, Sands decided to cut bait.
However, this latest move feels like Adelson dropped a ton of sewage in the lake before throwing his fish back in.
Now Wind Creek has spent eight figures to get into a PA online gaming industry whose entire existence has been thrown into question.
The sale is not finalized yet either, which does open the door for Wind Creek to potentially do something. Rumors from the Keystone State indicate they are definitely angry about the new memo and Adelson’s role in it.
Wind Creek paid premium dollar for property
Compared to other casino sales in the past couple of years, Sands commanded top dollar. Churchill Downs obtained Presque Isle Downs in Erie for $180 million. Valley Forge went to Boyd for $250 million.
Of course, Sands Bethlehem is one of the top-grossing casinos in the state, thanks in large part to its location near the New York state line. However, in addition to this dubious move by Adelson, the casino revenues have also declined over the past few years. Should PA online gambling move forward as planned, it should still be a profitable industry. If this new opinion shuts anything down somehow though, the Poarch Creek Band of Indians might experience some buyer’s remorse.