Tips are as integral to Las Vegas‘ gambling culture as high-rollers and showgirls. They are a vital and expected chunk of many casino workers‘ pay and the reason why many folks with little more than a high school education are able to break out of the lower middle class rather than scratch out a living on minimum wage.
And yet, tips – like the coveted dealing jobs at the swankiest properties – aren’t guaranteed. Nor are they sacred.
Over the years, casinos have tinkered with workers‘ tips by imposing tip pooling arrangements and adding other employees to those pools. Each move has resulted in controversy — workers are naturally protective of their tips – and, in some cases, lawsuits. Lucky for Steve Wynn, the law has sided with employers.
When Wynn announced a plan to shake up his casino floor by giving floormen a share of dealer tips, the word on the street was that the change was unheard of and nothing short of blasphemous.
It’s simply the latest and perhaps most dramatic chapter in Las Vegas‘ storied history of tips and tip pooling.
Most dealers at Las Vegas casinos pool tips, a break from the days when dealers pocketed their own tokes. The old system, which flourished in the days when the Mob skimmed from casinos, enabled some dealers to earn more on certain shifts than others and entrench themselves with bribes and tip hustling.
More tips into dealers‘ pockets meant less money for the house. Management pushed tip pooling to establish more control over their dealers. Tip pooling eventually became the standard in the 1980s, helped along by a landmark case at Caesars Palace.
A Nevada Supreme Court decision from 1989 sided against craps dealers who sued to block Caesars from forcing them into a tip-sharing policy for all shifts over a 24-hour period. Previously, Caesars dealers shared their tips with others on their shift, which Caesars argued led to problems recruiting dealers for less-lucrative shifts.
The Caesars case also is important for its broader implications. Dice dealers argued that Caesars was in breach of an employment contract and had to negotiate with the dealers‘ toke committee, which constituted a kind of labor organization. The court disagreed, concluding that the casino, which created the toke committee, had no obligation to negotiate with the dealer group.
Under state law, employers can fire workers for any reason at any time. Dealers, therefore, have no employment contract, the court said.
Wynn’s move to include floormen in the pool is arguably stronger because they are supervisors rather than fellow dealers. In other words, it’s „us“ versus „them.“
It’s not the first time floormen were allowed a share of tips. Some casinos in the past have included floormen in the tip pool in baccarat rooms, where floormen frequently interact with high-rollers who tend to gamble on credit.
A lawsuit filed by a dealer against the International Hotel, now known as the Las Vegas Hilton, had the unintended effect of opening the tip door to floormen as well as craps boxmen and casino cashiers.
The Nevada Supreme Court sided with the International in 1975, stating that employers can not only require new employees to be part of existing tip pool agreements but that those agreements can include other workers who interact with customers.
„There is no reason to suppose that the last person in a service line is the only one entitled to share in the customer’s bounty,“ the court wrote. „For example, a busboy as well as a waitress contributes to the good service and well-being of a customer in a restaurant. Similarly, in a casino, the floormen, boxmen and cashiers all contribute to the service rendered to the player.“
Dealers – many of whom have been subjected to second-hand smoke and verbal abuse by obnoxious customers over the years – say it’s unfair to share their tips with people who aren’t in the line of fire. While that may be true, case law is clear that tips customers hand over to dealers are up for grabs by their immediate supervisors.
Fueling dealers‘ frustration is the fact that Nevada law is vague on the subject of tips. Last amended in 1973, the statute is a mere four lines long and states that it is „unlawful for any person to take all or part of any tips or gratuities bestowed upon his employees.“
Nevada’s casino-friendly and expansionist business climate has yielded laws that are deliberately vague, allowing employers plenty of wiggle room.
The state law has generally been interpreted to mean that employers aren’t allowed to pocket workers‘ tips. It doesn’t define how far down the food chain the „employer“ definition applies, though it’s pretty obvious that Wynn and his top executives couldn’t get their hands on line workers‘ tips.
Citing state law, the Nevada Labor Commissioner has so far received more than 100 complaints over the new Wynn policy.
In response, Commissioner Michael Tanchek said Wynn’s policy didn’t violate state law and referenced another Nevada Supreme Court case upholding the right of the long-defunct Harold’s Club in Reno to require workers to pool tips, so long as the „employer“ didn’t get any of the money.
For its part, the Gaming Control Board leaves tip pooling decisions up to casinos – so long as nobody’s stealing from the pool. That’s consistent with the fact that regulators generally don’t meddle with operational decisions.
Defending the Wynn program, Wynn Las Vegas President Andrew Pascal says including floor supervisors in the tip pool will result in supervisors who are more engaged in the games and therefore more interactive with customers. More interaction means better customer service and potentially, bigger tips, he reasons.
Besides the tip sharing, Wynn has eliminated some casino middle management and has organized each shift as a standalone unit run by a casino manager who will oversee dealers as well as „service team leaders“ who will manage a few table games each. Each team will share a pit administrator who will handle paperwork and game inventory.
Dealers will rate the team leaders, while secret shoppers will be deployed to rate the dealers and supervisors. That information will be compiled with attendance records, errors and complaints as part of a point-based bonus program that will evaluate dealers quarterly and reward top-performing dealers up to USD 6,000 per year, making up some of that shortfall.
Floormen, now „team leaders,“ are entitled to a share of tips, Pascal said.
„This isn’t purely a management job,“ he said. „They’re welcoming guests to the table, they’re introducing themselves, they’re initiating ratings, they’re administering credit, they’re making sure cocktail service is timely, they’re establishing a rapport with that guest.“
Two recent incidents at the Wynn demonstrate a lack of check and balance by floormen overseeing dealers. One involved a small-time blackjack player who returned to the casino and gambled huge amounts. The player pushed over a half a million dollars in tips to the dealer, who immediately dropped it into the tip box without a floorman overseeing the game. The gambler later made a stink by demanding his money back. Another incident involved overpayment of a roulette bet. The dealer didn’t take the money back but notified a floorman, who kept it quiet.
Divided among Wynn’s roughly 600 dealers, USD 200,000 in tips would result in about USD 333 per person per day. Under the new program, about 200 supervisors will get four-tenths of each share. In other words, the equivalent of about 80 people will be added to the tip pool, diluting a USD 200,000 toke pool to USD 294 per person.
Already the highest paid in Las Vegas, Wynn dealers who earn about USD 100,000 per year can expect to see their pay – before bonuses – drop by about USD 10,000 per year. Floor supervisors can expect to get a 50 percent pay boost – from around USD 60,000 to USD 96,000.
While dealers have complained loudly, Pascal said he expects tensions to settle somewhat after the first few paychecks. More than 70 dealers have so far expressed interest in supervisor positions that they wouldn’t have wanted under the old system, he said. More than 300 people – both dealers and supervisors – outside the company have also inquired about jobs, he said.
„Previously, we weren’t able to get great candidates to fill jobs,“ Pascal said. „It was clearly a flawed system.“
History has shown that moves like this have a ripple effect. MGM Mirage spokesman Alan Feldman said the company has no plans to include floorpeople in the tip pool, which „creates more problems than it solves.“ But check back in a few years, when high-end casinos will have lost some floorpeople to Wynn and new, ultra-luxury resorts open for business.
The bigger question is whether other line workers with juicy tips, such as cocktail servers and valets, will be forced to share tips with others.
Pascal says the Wynn casino policy won’t extend to other departments, which don’t have the same problems stemming from a disparity in pay between line workers and supervisors.
Servers and valets can rest easy for now. Case law suggests that casinos would have a tough time forcing workers such as valet and beverage supervisors — who aren’t interacting much with customers — to share tips with line employees. It’s also unlikely that a state where law and policy favor employers will rewrite Nevada law to ensure that individuals can keep all of their own tips.