Strike looms in Las Vegas as labor contracts expires

Early today, the Culinary Union communicated that hospitality workers, including bartenders, cooks, porters, along with food and cocktail servers are planning to start making “thousands of strike picket signs,” as the labor contracts of 50,000 workers at 34 casino resorts on the Las Vegas Strip and downtown reportedly expired at midnight yesterday, NBC News reports.

The news agency reports that as of 4:30am ET this morning, no walkout had been called for. The union has asked that visitors not patronize hotels and casinos if a strike is called, and are urging people not to cross picket lines if there is a labor action.

On May 22, some 25,000 members of two local trade unions (Culinary Workers Union Local 226 and Bartenders Union Local 165) voted overwhelmingly to authorize strike action if their leadership was not able to agree on new five-year employment contracts with some of the city’s most prominent casino operators by the month’s end.

Should a large-scale strike be called, Sin City’s two biggest resort operators, Caesars Entertainment Corporation (NASDAQ: CZR) and MGM Resorts International (NYSE: MGM), could reportedly lose upwards of a combined $10 million a day, according to estimates released by the Culinary Union.

Operating more than half of the properties that would be affected, should 50,000-plus workers strike, Caesars and MGM would be significantly impacted. A Wednesday statement from Culinary Union 226, UNITE HERE Gaming Research, the hospitality workers’ union research arm, projected that a strike in Las Vegas lasting one month could cost MGM and Caesars more than $300 million in operating costs.

“It is difficult to gauge the potential impact of a large-scale strike in Las Vegas since we haven’t had one since 1984, but we think a strike now would significantly impact MGM and Caesars’ operations on the Strip,” said UNITE HERE analyst, Ken Liu. “With lower revenues and reduced operating margins, we believe a month-long strike could cut Caesars’ EBITDAR by about $115 million and lower MGM’s EBITDA by just over $200 million.”

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According to the news agency, in a statement early Friday, the Culinary Union said that hospitality workers in Las Vegas were “preparing for a citywide strike” and are planning to begin making “thousands of strike picket signs.” The union reportedly added that regarding a new contract, negotiations with Caesars Entertainment were ongoing, while on Thursday, spokeswoman for the union, Bethany Khan, reportedly said that no additional meetings with MGM had been scheduled.

According to UNITE HERE, a labor union which represents 270,000 workers in gaming, hotel, and food service industries in North America, approximately 12,000 Caesars workers and 24,000 MGM workers are taking part of the contract negotiations this year.

The unionized workers’ reportedly want their representatives to negotiate new long-term deals that incorporate higher wages, better health benefits, more workplace safety measures along with greater protections from sexual harassment by guests and the fear of losing their jobs to robots or automation, such as new electronic reservation and room service systems.

NBC News reports that Las Vegas Strip workers’ average hourly wage is $23, including health care benefits, pension and 401(k), and for first-time homebuyers, $20,000 down-payment assistance.

According to documents released by the union, they’ve asked Caesars and MGM for yearly raises of approximately 4% over the next five years. The casinos have reportedly come back with 7BALL CC 2.7 to 2.8%.

A May 22 report from the Las Vegas Review-Journal cites James P. Kraft, Professor U.S.: Business and Labor, American West at the University of Hawaiʻi at Mānoa, who authored the book Vegas at Odds: Labor Conflict in a Leisure Economy, 1960-1985. Kraft reportedly said that Las Vegas experienced its last citywide strike by casino workers in 1984 and cost casinos as much as $100 million in revenue, estimated at about $250 million today, while millions in tourist-related taxes were lost by city and state budgets.

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