Potentially Disastrous Casino Strikes Averted On Holiday Weekend

July 5, 2022
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Faced with costly strikes at the peak of the tourist season, brick-and-mortar casinos in New Jersey and Rhode Island reached tentative agreements with labor unions to prevent a walkout of workers during the Independence Day weekend.

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Faced with costly strikes at the peak of the tourist season, brick-and-mortar casinos in New Jersey and Rhode Island reached tentative agreements with labor unions to prevent a walkout of workers during the Independence Day weekend.

Just hours before a 12:01am deadline on Friday (July 1), MGM Resorts International’s Borgata, and Caesars, Harrah’s and the Tropicana, all operated by Caesars Entertainment, came to terms with Local 54 of the Unite Here Union in Atlantic City.

On Saturday, Hard Rock International negotiated a deal with Local 54 to stymie a strike that was set for 12:01am on Sunday.

The current labor contract expired June 1, and terms of the new deal have not been disclosed.

Two other casinos — Bally’s and the Ocean Casino Resort — are already bound by the same terms of the new agreement, according to “me too” commitments.

Only two of Atlantic City’s nine casinos — Resorts and the Golden Nugget — do not have a labor contract, but Local 54 told the Associated Press both of those casinos are expected to negotiate new deals within days.

On Thursday, just one day before the disclosure of the first agreement in Atlantic City, Bally’s similarly announced a two-week extension in contract negotiations with the union representing employees of the company’s Bally’s Twin River casino in Lincoln, Rhode Island, and another casino in Tiverton, Rhode Island.

“No one wants a strike — the owners of the casinos or the union — but we have to stand strong because we know what’s at stake,” Alfred Kare, a banquet server at Caesars in Atlantic City, told VIXIO GamblingCompliance shortly before the announcement of Friday’s deals.

“We’re just trying to catch up after the [COVID-19] pandemic,” Kare said. “Casinos are making money and online gambling has exploded. The casinos have to be willing to share.”

If the strikes had occurred, Atlantic City stood to lose $2.6m per day, according to Michael Busler, a finance professor at Stockton University near Atlantic City.

“So far this year, profits are up even when compared to 2019 (the year before the pandemic),” Busler said. “A strike would significantly harm this rebound.”

A prolonged strike could also have interfered with the annual convention of the National Association for the Advancement of Colored People (NAACP) scheduled from July 14 through July 20 at Atlantic City’s Convention Center on the Boardwalk.

The NAACP convention is expected to pump $9.3m into Atlantic City’s economy.

The last casino strike in Atlantic City occurred in 2016 when Local 54 refused demands by Trump Taj Mahal owner Carl Icahn, a billionaire, to allow his employees to work without healthcare and pension benefits.

The strike began on July 1, 2016, and ended with the closing of the Trump Taj Mahal on October 10, 2016, one month before its original owner, Donald Trump, was elected President of the United States.

Hard Rock International bought the Taj Mahal in March 2017 and reopened it as Hard Rock Atlantic City in June 2018.

“The pandemic has, in some ways, strengthened the relationship between workers and management because following the more than three-month shutdown [in 2020], everyone had to work together to reopen safely,” said Jane Bokunewicz, faculty director of the Lloyd Levenson Institute of Gaming at Stockton University.

“The pandemic has also changed the way people think about work and pay,” Bokunewicz said.

Barbara DeMarco, a New Jersey gaming lobbyist, said Local 54 was smart to target the largest casinos in Atlantic City first for a potential strike.

“This way, the whole of Atlantic City would not have been impacted [and] smaller non-casino businesses would still have had foot traffic,” DeMarco said.

As for Atlantic City’s booming online gambling industry, a strike of brick-and-mortar casinos would not have been significant, according to Busler, the Stockton University finance professor.

“Online gaming and sports betting may actually [have increased] during a strike as gamblers may [have reasoned] that it is easier to gamble online than to go to the brick-and-mortar buildings where they may have to cross a picket line,” Busler said.

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