Casino workers go on strike in Detroit

It’s not just auto workers who are on strike in Detroit. Thousands of casino workers demanding higher wages and better working conditions walked off their jobs in the city on Tuesday. Casino workers are seeking higher wages and better working conditions as the cost of living has risen in recent years.

The work stoppage affects operations at the MGM Grand Detroit, which is owned by MGM Resorts International; Motor City Casino; and Hollywood Casino in Greektown, owned by Penn Entertainment.

The striking employees include 3,700 workers employed in various positions at the properties, including vendors, cleaning staff, food and beverage workers, valets, engineers and more. They are represented by the Detroit Casino Councilwhich includes five unions, including the United Auto Workers.

The effect was immediately clear. Motor City Casino updated its website to show that high-limit table games and poker rooms, as well as casino valet parking, were closed, in addition to its spa and some restaurants and bars.

FanDuel, which operates FD Sportsbook in partnership with MotorCity, told CNBC that it will remain closed except for a non-union MCC employee who will handle cash at the counter for customers who need to redeem tickets, which is in compliance with state law requirements Michigan corresponds.

The Hollywood Casino in Greektown said in a statement to CNBC: “We are disappointed in the Detroit Casino Council’s decision as we have made generous, progressive settlement offers that position our team members and our company for sustained success.” Management says it remain open for business.

Matt Buckley, president and COO of MGM’s Midwest Group, sent a letter to MGM Grand Detroit employees making it clear that the company also intends to keep the property open and operating.

“As to the status of our negotiations, we have made six proposals to the union and our current offer includes the largest wage increase in the history of MGM Grand Detroit. It is a significant proposal,” he wrote.

The Detroit Casino Council argues that casino employees agreed to a three-year contract during the stressful early days of the Covid-19 pandemic. The deal, which has since expired, included a 3% wage increase, according to the union, even though the cost of living rose 20% due to high inflation.

“In contrast, industry gaming revenues have now exceeded pre-pandemic levels and reached a new record,” the Detroit Casino Council wrote in a press release. “In 2022, the Detroit casino industry generated $2.27 billion in gaming revenue and is on track for another record year in 2023. The three Detroit casinos reported a total of $813 million more in total gaming revenue in 2022. Gaming revenues than in 2019, but paid total wages for workers represented by the DCC were $34 million less compared to the same years.”

But the brick-and-mortar casinos saw it revenues of $1.2 billion in 2022, a decrease of about $200 million compared to 2019 before the Covid-19 pandemic.

The Detroit Casino Council’s revenue figures include revenue from iGaming and online sports. Michigan gambling regulators require them to work with land-based casinos to obtain an operating license.

The Detroit Casino Council estimates that each day of strike could jeopardize about $738,000 in city and state tax revenue and $3.4 million in casino operator revenue.

MGM Resorts, Caesar’s Entertainment and Wynn Resorts are also facing possible work stoppages in Las Vegas. Nearly 40,000 Culinary Union members have authorized a strike, but it has not yet been called. The negotiations are ongoing.

MGM CEO Bill Hornbuckle told CNBC during a keynote presentation at the Global Gaming Expo last week that he and the other casinos’ executives were engaged in intensive negotiations. But he said unions in Las Vegas were influenced by other high-profile strikes.

“It doesn’t help when the UAW demands 40% in Detroit. I mean, that’s a peak that’s hard to ignore,” Hornbuckle said at the time. “However, I think what matters here locally is the viability of people, especially on the front line, the ability to pay the rent and get to the next step in life. And I think that’s what’s relevant.”

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