Atlantic City Union Claims Strike Would Cost Casinos $2.6M a Day

Posted on: June 25, 2022, 09:08h. 

Last updated on: June 25, 2022, 05:21h.

Devin O'Connor @CasinoorgDevinO Read More
Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.

The Atlantic City union representing more than 10,000 workers employed by the town’s casinos says a looming strike would have steep financial consequences on the nine properties.

Atlantic City union casino strike MGM Caesars
The exterior of the Tropicana Atlantic City casino entrance along the Boardwalk could be the site of a union strike next week. The walkout can be avoided by way of the gaming industry and union coming to new contract terms. (Image: AP)

Members of the Local 54 chapter of the national Unite Here labor union have authorized a strike at any moment after July 1 at 12:01 am EDT. The collective bargaining contracts for workers at the nine casinos expired effective June 1.

The union presumably has the upper hand at the negotiating table, as a walkout ahead of the busy July 4 holiday would be a financial bad beat for the resorts. That’s at least what the union believes.

Adding to the evidence is a new report commissioned by Unite Here regarding the economic consequences a strike around the Independence Day holiday weekend. The report concluded that Borgata, Caesars, Harrah’s, and Tropicana collectively stand to lose as much as $2.6 million a day in losses, should a picket commence. MGM Resorts’ Borgata is projected to lose the bulk of the revenue at $1.6 million every 24 hours.

The report’s calculations assume a negative decline in gross gaming revenue (GGR) of 25% during the strike, compared with revenue realized during last year’s July 4 holiday period. The losses additionally include revenue declines that would be incurred elsewhere, resort-wide, based on 2021 earnings data.

Four Casinos Initially Targeted

The Unite Here Local 54 union says its pickets would first target MGM and Caesars Entertainment properties, which are leading the bargaining negotiations on behalf of the nine casinos.

The union is threatening walkouts at Borgata and the three Caesars-operated casinos on Friday, July 1. Union brass says if new contracts are not reached by the following Monday, July 3, a strike could be initiated at Hard Rock, too.

Ocean Casino, Golden Nugget, Resorts, and Bally’s all have so-called “me too” agreements in place with the union. Those pledge to adhere to whatever new collective bargaining terms it agrees to with MGM, Caesars, and Hard Rock. As a result, strikes are not currently slated for those three properties.

Numbers Tough to Predict

The union’s claims that a casino strike would cost the companies leading the gaming industry’s side of the bargaining $2.6 million daily is up for debate.

Jane Bokunewicz, director of Stockton University’s Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism (LIGHT), says such a flat 25% reduction in GGR and associated earnings might not accurately pinpoint the financial repercussions of a strike.

During the last major strike in Atlantic City, which occurred in the fall of 2004, the casinos managed to avoid closing by bringing in temp workers to manage and facilitate resort operations. Bokunewicz believes a similar response would happen next week should workers walk off the job.

The casino floors at all properties would remain functioning as normal,” Bokunewicz told the Associated Press. “[Casinos] would use non-union employees and management to keep the hotel and food and beverage sites operating at an acceptable level to attract customers. Revenue losses or gains would depend on how successful they are at doing this,” Bokunewicz reasoned.

Unite Here represents most resort employees, aside from direct gaming operations such as table game dealers and slot technicians. Local 54’s membership includes cooks and waitstaff, cocktail servers, housekeepers, bellmen, porters, and bartenders.