What will hit it big at casino?
Wind Creek looking into ways to attract more than gamblers.
It didn’t take long for Brian Carr to realize the buyers of Sands Casino Resort Bethlehem had plans to make the facility into much more than a gambling mecca.
In fact, one of the first conversations the Sands Bethlehem president had with Wind Creek Hospitality’s top brass last year was about the development ideas that had filtered in over the
years for the 124-acre former Bethlehem Steel site.
So Carr consulted a portfolio filled with proposals from years past, ideas from developers attracted to the notion of putting a project next to a casino that draws more than 8 million patrons a year.
He sent pitch after pitch to Wind Creek over the course of weeks and months, catching the company up on the interest in undeveloped parts of the site.
“That’s been a huge area of opportunity that’s sitting out there, and I think your mind is always crazy with all the opportunity that would be out there,” said Carr, who will continue managing the property once Wind Creek’s $1.3 billion acquisition of Sands Bethlehem closes this year.
Wind Creek isn’t wasting much time, disclosing earlier this week its initial investment plans for the property, which will be renamed Wind Creek Bethlehem.
That investment includes $90 million for a 300-room hotel tower, and possibly some meeting space with it, that will complement the property’s 282room hotel that boasts a 95 percent occupancy rate. Wind Creek wants to break ground on the hotel, which could open within two years, as soon as the day after the deal closes.
The next part of the plan isn’t as concrete. But Wind Creek President and CEO Jay Dorris said the company has $100 million set aside to reconfigure the No. 2 Machine Shop, a storied but weathered industrial building, into a traffic-driving, nongambling attraction.
While Dorris acknowledged an indoor water park is among the ideas under consideration, he stressed the company is still sifting through concepts and conducting studies to determine what kind of development the market could support.
The company is eager to get shovels in the ground, starting the process of transforming Sands Bethlehem into a resort destination capable of standing out as the Northeast gambling market gets increasingly crowded.
But it’s not like Wind Creek is starting from scratch.
Sands Bethlehem already features a 150,709-square-foot casino floor, several restaurants, an outlet shopping center and a popular event center.
Recent investment in the property by Las Vegas Sands Corp., however, has mostly been limited to renovations — $12 million to spruce up the hotel, $6 million to overhaul the poker room and a $1.6 million injection in Emeril’s Chop House — rather than constructing new attractions.
Meanwhile, the facility’s competition has only increased.
For one, Resorts World Catskills, nearly equal distance from Manhattan, opened in early 2018 with plans to compete with Sands Bethlehem for the Asian market coming out of New York City. Both facilities offer Asiancentric table games such as baccarat, pai gow tiles and pai gow poker.
Months later, in summer 2018, two casinos — Ocean Resort Casino at the former Revel, and Hard Rock Hotel & Casino at the old Taj Mahal — opened in Atlantic City, putting new buzz-worthy products on the market.
So take those openings and sprinkle in a pinch of online gambling in New Jersey and it’s no wonder why Sands Bethlehem’s gross table games revenue dropped almost 9 percent to $222 million last year. Further threats, including Las Vegasstyle casino gambling in New York City, loom on the distant horizon.
The need to stand out
“In the crowded Northeast, you have to take steps to stand out, and you have to invest in that,” said Michael Pollock, managing director of Spectrum Gaming Group, a consulting firm in Horsham, Montgomery County. “The typical casino customer is not getting any younger. If you want to reach a deeper demographic, the way to reach that is often through the nongaming attractions.
“It won’t turn Bethlehem, Pennsylvania, into Las Vegas, but it will convince some number of people within driving distance to spend a little more time and money at the property,” he said.
Exploring noncasino attractions, such as an indoor water park, is the start of rounding out the Bethlehem site’s development to help protect it against future competition.
Alan Woinski, president of Gaming USA Corp., a New Jersey consultancy that publishes newsletters on the gambling industry, said Wind Creek is doing the right thing by looking to diversify the Bethlehem property’s offerings. He’s not, however, a big fan of an indoor water park.
“I don’t know of any gambler who says, ‘Oh, let’s go to this casino because I can bring my kids and leave them at the water park,’ ” he quipped.
What Woinski would like to see at the Bethlehem property is additional places to eat, a comment he made after recalling his own difficulty getting a table at one of the site’s restaurants ahead of Jerry Seinfeld’s Nov. 30 performance at Sands Bethlehem.
Another surefire hit at the property, Woinski believes, would be a convention center, something he thinks would be well-placed in the center of the growing Lehigh Valley region.
A convention center is a white whale that Lehigh Valley leaders have long sought but so far has proven elusive.
Wind Creek officials did not bring up the possibility of additional dining options, but Carr said the property’s restaurants, including Emeril’s three eateries and Buddy V’s Ristorante, will remain after the deal closes.
Bethlehem Mayor Robert Donchez said Wind Creek’s plan for nongambling draws is consistent with the vision the community had for the former Steel land from the beginning: a destination.
The original master plan for the site — its anchor was a National Museum of Industrial History, a Smithsonian affiliate that did materialize on a much smaller scale — included, among other things, a 250-room hotel and conference center; a 50,000-square-foot multiplex cinema; a 75,000-square-foot family fun center with batting cages, bowling lanes, interactive electronic games and simulated car racing; a 90,000-square-foot ice skating center; and 175,000 square feet of retail.
After Sands came to town, some of the envisioned entertainment draws began happening with the community investment at SteelStacks, the Steel Ice Center, the outlet mall and event center, said Tony Iannelli, president and CEO of the Greater Lehigh Valley Chamber of Commerce. But the community envisioned more.
“I think the vision has always been large,” he said. “We weren’t sure if the Lehigh Valley was up to the vision, so maybe it hasn’t happened as rapidly as some had hoped, but it’s continued to have evolved. The good news is that the ever-evolving Valley is taking another step.”
Time to act is now
That step will be taken with Wind Creek, the gambling and hospitality arm of Alabama’s Poarch Band of Creek Indians that understands the importance of diversification.
In 2014, Wind Creek met with the Tribal Council, a meeting in which the parties officially stated that the company needed to diversify outside of its home base of Alabama.
For years, Wind Creek has enjoyed a monopoly on casino gambling in Alabama, a state that still prohibits casinos on nontribal land.
But, Wind Creek understands, that might not last forever and competition could be headed their way in Alabama.
In the years that followed, Wind Creek partnered with another tribe to open the Wa She Shu Casino in Nevada, acquired two Caribbean resorts in 2017, and in March 2018 entered into a definitive agreement to acquire Sands Bethlehem.
Now, like it has done with its holdings, Wind Creek will have to diversify the offerings at Sands Bethlehem.
The company offers plenty of nongambling attractions at its other properties.
For example, the 10-year-old Wind Creek Casino & Hotel in Atmore has an outdoor amphitheater, movie theater, bowling alley and arcade, among other offerings.
In addition, the company pumped $65 million into Wind Creek Montgomery, an expansion that opened in December 2015 and featured B.B. King’s Blues Club, a deluxe swimming pool and a five-floor, 123-room hotel.
The time to take action at Sands Bethlehem is now, several years before New York officials weigh whether to locate three casinos with table games in its population-rich downstate area.
MGM Resorts International, which is buying Empire City Casino in Yonkers, N.Y., is among the casino companies lobbying New York legislators to speed up that timeline. In addition, Las Vegas Sands also is reportedly interested in a New York City casino.
A casino there would be a big deal for Sands Bethlehem, the closest casino to New York City with live table games. In 2017, for example, buses brought more than 1.5 million guests to the property.
“We pull heavy out of New York, that’s a fact. We pull heavy out of north Jersey, that’s a fact,” Carr said. “If you put a casino there, it’s going to put some pressure on it.”
What Wind Creek does see is the potential to lure chilled Northeast guests to visit the company’s properties in warmer climates.
That means regulars in Bethlehem could escape to Wind Creek’s Aruba and Curacao resorts during the winter months using travel perks offered through the company’s rewards program. One analyst previously suggested the reverse to The Morning Call: Maybe Wind Creek’s current customer base wouldn’t mind seeing a property not too far from New York City.
While Wind Creek isn’t putting all of its ideas out in the open, the company’s willingness to listen and explore opportunities for the site has Carr excited.
And once those projects start — the sooner, the better, Carr says — he expects one development to breed another project and so on. First, the hotel. Then, the No. 2 Machine Shop. After that?
“It would be a mistake to go in and say, ‘We know everything we’re going to do on 124 acres,’ ” Carr said. “Coming in and doing these first two things, I think it’s going to be very interesting to see what calls we get, what opportunities start to present themselves, what things start to fit and help us continue the opportunity and the goal to really make this much more than just a casino in Bethlehem, Pennsylvania.”