Caesars, MGM CEOs say progress being made on new Culinary deals
Top executives from the Las Vegas Strip’s two largest casino operators told the investment community ongoing contract talks with Culinary Workers Local 226 and Bartenders Local 165 will be resolved ahead of a busy end-of-the-year tourism market.
The unions represent the bulk of the companies’ nongaming workforce.
“I'd expect that we'll have new agreements by the fall, and I'm not expecting a whole lot of drama,” Caesars Entertainment CEO Tom Reeg said Tuesday.
On Wednesday, MGM Resorts International CEO Bill Hornbuckle expressed a similar outlook.
“The negotiating process is going well,” Hornbuckle said. “We have decades of history with them on doing this. The town hasn't seen a strike since the 1980s, so I think we'll come to a reasonable resolution.”
Reeg and Hornbuckle’s comments came during their company’s second-quarter earnings conference calls with gaming analysts. Wynn Resorts, which is also in contract talks with the two unions, has scheduled a conference call for next Wednesday to discuss its financial results and is expected to face similar questions from analysts.
Combined, the three companies operate 19 Strip resort complexes that encompass more than 38,000 workers represented by the two unions. Typically, the unions begin contract talks with the largest employers, which sets the bar for negotiations with smaller resort operators.
Five-year contracts between the unions and the resort industry that were agreed to in 2018 expired at the end of May, but negotiations began in April.
In total, the unions represent 60,000 workers in more than 40 gaming and nongaming resorts in the Las Vegas area.
“Everybody is operating under extensions,” Reeg said on the Caesars call. “As we speak, there is work being done in terms of a new contract. You’re talking about complex stuff that takes a little while.”
A spokeswoman for the Culinary said extensions had been reached with Strip casino companies but several downtown casino operators have not agreed to the extensions.
In an emailed statement, Culinary Secretary-Treasurer Ted Pappageorge said the organization has put the largest economic and benefits package the union has ever proposed on the bargaining table.
“Gaming companies are doing very well, the recovery is in full swing, and the companies are going to need to share the wealth, address issues of daily room cleaning and additional workload that were put onto guest room attendants during the pandemic,” Pappageorge said.
He added the union is seeking to ensure more workers can join the labor organization.
Reeg and Hornbuckle suggested the companies will see increased labor expenses because of negotiated wage and benefit hikes.
Acrimony between the gaming industry and the unions surfaced in Carson City during the legislative session, primarily around SB441, which repealed requirements to clean hotel rooms on a daily basis that were enacted during the pandemic.
In a late April interview with The Nevada Independent, Pappageorge said daily room cleaning “would be a strike issue in the contract talks.”
Hornbuckle said Wednesday there were “issues around housekeeping” that involve “a contingency of people that we're going to need to address.” He added that “labor” could be the largest expense increase coming up for the company.
The unions did not declare June 1, the date the contracts formally expired, as a “strike deadline” because of the complexity of the talks. Contract extensions were reached with most Strip properties and any wage increases agreed to in a final contract will be retroactive.
The last major Culinary strike against the resort industry was in 1984 when 17,000 union workers walked off the job over contract disputes with 32 Strip resorts. The nine-month strike led to six casinos severing ties with the union.
Updated at 7:54 a.m. on 8/3/2023 to clarify companies that have agreed to contract extensions.
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