“We are going to have to move forward with one of those very, very soon, because our cash flow problem,” Skoufis insists, “forget about even just the fiscal year picture, being able to pay the bills for the state’s operations are becoming strained and nearing an impossible situation.” The downside is that such an accelerated timetable would probably spell doom for some of the underperforming upstate casinos, choking off their Five Boroughs oxygen supply. But, for some, that will be an acceptable price to pay. The free market is a cruel mistress.
As long as we’re on the subject of MGM, it’s a stronger contender for Stiff of the Year after trying to extort literally thousands of dollars in ‘overpaid’ tips from employees during the very depths of the Covid-19 pandemic. “Voluntary reductions to employee pay in order to recover overpayments will be taken in increments as defined below (maximum 5 pay periods,)” read a form letter obtained by the Nevada Current from a cabaña attendant who was being dunned ‘voluntarily’ for $3,780. That’s a helluva message to send to employees whose jobs are hanging by an economic thread: Billions for Japan but not one cent for cocktail servers. Seriously, MGM is haggling with its workforce over a measly $75K, or what CEO Bill Hornbuckle would consider walking-around money. “A supervisor told us the money was our back pay and she was the one that said not to worry about it. She’s now the one coming back trying to get that money back,” another cabaña server told the Current.
When the story saw the light of day, MGM was quick to see the error of its ways. “We won’t be collecting those overpayments,” grumbled spokeswoman Debra DeShong. “Since we’re not collecting them I’m not going to comment.” In fact, what MGM attempted may have been illegal or at least grossly unethical. According to Nevada Department of Labor verbiage, a worker “is not liable for the amount of the overpayment if recovery would be against equity and good conscience, as long as there is no showing of fraud or intentional misrepresentation or nondisclosure.” We’d say “equity and good conscience” have been sorely offended. For shame, MGM.
Both MGM and Boyd Gaming are facing worker unrest on the Gulf Coast. Employees have gone to Mississippi regulators to air such concerns as frequent noncompliance of customers with mask-wearing requirements, being called into work without having been cleared of Covid-19 and an alleged lack of contact tracing. (five IP Casino and 10 Beau Rivage employees have tested positive for Coronavirus.) Said Unite-Here Local 23 President Marlene Patrick, “we don’t feel like the company is being transparent as someone becomes positive or that they test positive or that they are doing contact tracing. So, it can trickle down to many workers that can trickle down to the guest.” MGM responded by reiterating its “seven-point safety plan” and adding “We have made it very clear that failure to enforce or comply with our health and safety rules could result in disciplinary action and we encourage employees to raise concerns either directly or anonymously.” Obviously Unite-Here does not share that confidence.
Although it’s an initiative he inherited from Anthony Rodio‘s tenure, Caesars Entertainment CEO Tom Reeg is proceeding full speed ahead with Caesars Danville in Virginia. Some specifics of the property are being made public: It will be budgeted at $400 million, offer a spa, multiple restaurants, a convention center, a concert venue seating 2,500 and a pool. $15 million will be paid to Danville within 30 days of an upcoming referendum. (In what may be our first endorsement of the year, S&G urges a ‘yes’ vote.) We don’t know whether Danville drove a hard bargain or if Reeg was feeling “george” but—if the voters assent—this will be a good deal for the city, including $5 million/year in taxes (plus a percentage of net gambling revenue). Ka-ching!
If it made it to (now-canceled) Global Gaming Expo, Australian-based slot maker Ainsworth Game would be wearing a long face. It’s coming off a $24.5 million 2Q20 loss and had to sack 107 workers. The pain just doesn’t extend to the worker bees. Executive-level employees took 20% pay cuts in both 2Q and 3Q20. That includes the company chairman and board of directors. (We’re confident they can afford it.) “Customers across all Ainsworth Game’s markets suspended operations from mid-March. Some reopenings of customers’ facilities have occurred since that time, although venues have reduced capital expenditure … being well below pre-pandemic levels,”said the company, which also took a write down on a possibly ill-time acquisition of MTD Gaming. Ainsworth expects a 36% revenue decline this fiscal year. Searching for a silver lining, CEO Lawrence Levy said, “We took proactive measures to streamline our overheads and we are securing more flexible financing arrangements to ensure we can endure a protracted downturn.” Good thinking.
Jottings: Casinos in Ohio are doing better than ever—and that’s got the problem-gambling community worried. “I think it’s great that people received stimulus checks during this period, but it was not a good thing for a lot of people in recovery,” said Bruce Jones of counseling center Maryhaven. “Since they’ve reopened, our calls to the hotline number and to the agency have been on a steady increase. Keep in mind that because of Covid, [casinos] reduced numbers of availability on the machines and some of the poker rooms were closed, and they still set records” … Macao casino workers are seeing 5.5% less in their summer paychecks, possibly due to having been placed on unpaid leave. The enclave employs 57,459 in its casinos and City Hall tends to get displeased if that number drops significantly, hang the financial consequences for operators (who are running huge losses) … For $160 million, Sun International will be shot of its casino interests in Chile, which had been a source of grief. Sun will use some of the money to settle its debts in Latin America … 23.5% of U.S. hotels are at risk of foreclosure, according to recent congressional testimony. That’s up from 1% at the end of last year. American Hotel & Lodging Association CEO Chip Rogers said, “With record low travel demand, thousands of hotels can’t afford to pay their commercial mortgages and are facing foreclosure with the harsh reality of having to close their doors permanently.” The hotel lobby hopes to divert CARES Act funds into a federal bailout … Finally, Hurricane Laura inflicted relatively minor damage on the two major casinos in Lake Charles, Louisiana—minor at least by Hurricane Katrina standards. (Of course, there’s that chemical-plant fire going on.) The human cost is still being assessed at this hour.
