Wynn Resorts to Pay Dealers $5.6M, Resolving 15-Year Feud Over Tips

Posted on: March 31, 2021, 05:44h. 

Last updated on: March 31, 2021, 11:44h.

Philip Conneller @casinoorgphilc Read More
Expertise: Gaming Business, Regulation, Tribal Gaming.

Wynn Resorts has agreed to pay $5.6 million to around 1,000 current and former dealers at its Las Vegas properties, ending a dispute about tips that has bounced from courtroom to courtroom for the past 15 years.

Wynn Resorts
Steve Wynn changed the tipping policy for dealers in 2006, shortly after the opening of the Wynn Las Vegas (pictured here with the Wynn Encore in the background). (Image: Fortune)

The settlement was reached with the help of a mediator and signed off Friday by US District Judge Andrew Gordon.

The dealers believed they were dealt a lousy hand back in 2006 when Wynn Resorts’ chairman and CEO Steve Wynn implemented a new policy that would cut team leaders in on the tip pool.

Raw Deal for Some Staff

Wynn Las Vegas had only just opened and the position of “casino service team leads” had just been created by the merging of floor supervisors and pit bosses into a single role.

But these team leaders were often paid less than dealers because of tips from customers, and Wynn was concerned this would disincentivize people to rise in rank. Dealers argued Wynn Resorts should simply have raised team leaders’ salaries rather than go messing with their tips.

Wynn was the only casino operator in Las Vegas to share tip pools with non-tipped staff. Under the controversial policy, some 12 percent was reserved for team leaders.    

The dealers sued, seeking to recoup as much as $50 million. They lost. But when the Obama administration passed a law in 2011 making the sharing of tips with non-tipped workers illegal, they revived the case in a federal court. The case was tossed again, and so the dealers took it to the court of appeals. This time they were successful.

Wynn went to the US Supreme Court, which declined to hear the case. But SCOTUS kicked it back to the district court in early 2018, because, by then, the Trump administration had rescinded the 2011 rules on tip-sharing.

New Tipping Rules

The new rules legalized tip-pooling for employees that didn’t regularly receive tips, provided companies paid employees the full minimum wage. But it also prohibited the sharing of gratuities with supervisors.

Also in 2018, Wynn resigned as chairman and CEO in the wake of sexual misconduct allegations. His successor, Matt Maddox, quickly sought to address the issue by raising pay for team leaders and dealers.

The settlement includes attorney fees, which have piled up over the years to $1.4 million, as well as other legal costs.

LVRJ calculates this leaves less than $4,170 for each of the estimated 1,000 current and former dealers. When you consider that some had argued they were due upwards of $100,000, it’s really only the tip of the iceberg