MGM will raise pay for dealers

Casino giant’s move meant to make compensation uniform

Dealers at MGM Mirage’s 10 Strip casinos will be given a pay raise Monday, as much as 22 percent in some cases, as the gaming operator moves to implement a uniform pay structure for more than 5,100 of its workers.

MGM Mirage President Jim Murren said Friday afternoon the raises, as high as USD 1.42 an hour for 60 percent of the company’s Strip dealers, were needed to create a level playing field among its dealing work force. MGM Mirage is preparing to add potentially 1,000 dealers when the company opens CityCenter development in November 2009. MGM Mirage is also looking at expansion plans on the Strip well into the next decade.

„Our thinking is that our company has grown rapidly, both internally and through two major mergers,“ Murren said. „Our dealer rates were all over the board and, if we are to be a leader, then we need to standardize ways to compensate our dealers.“

Murren added that the raises did not come about as a response to potential union organizing efforts targeting dealers at the company’s Strip casinos.

„People will wonder and believe that, but we came up with the idea of CityCenter in 2004 and our employment practices long before any noise (about union organizing) was being made in the marketplace,“ Murren said.

The New York-based Transport Workers Union of America has organized dealers at Wynn Las Vegas and Caesars Palace under Las Vegas Dealers Local 721. The union has taken other steps to organize at two MGM Mirage properties, The Mirage and Mandalay Bay, setting up two Web sites aimed at dealers at those casinos.

„One thing we have is a tremendous dialogue with our employees,“ Murren said. „This will be expensive for us to do, but it puts us in a great position for 2009.“

Murren said the financial figure for the increased labor costs was more than USD 10 million annually based on the current job totals.

Letters from the various MGM Mirage property presidents went out to dealers late Friday afternoon explaining the pay increases and the reasoning behind the move. The base hourly wage for full- and part-time dealers will increase Monday to USD 7.75 an hour for dealers making less than that hourly wage. Dealers making more than USD 7.75 an hour will be given a yet-to-be-determined cost-of-living increase.

Full- and part-time dealers at MGM Mirage will receive cost-of-living increases every April starting in 2009.

„These upgrades were made after an exhaustive review of the best pay practices and policies at all properties and in keeping with our goal to provide the MGM Mirage work force with the most contemporary and competitive pay and benefits possible,“ the letter stated.

The pay discrepancy between dealers at various properties happened because of the company’s expensive buyouts of rival casino operators. In 2000, then MGM Grand paid USD 6.4 billion to acquire Mirage Resorts. Five years later, the renamed MGM Mirage spent USD 7.9 billion to acquire Mandalay Resort Group. Dealers at the different properties made different base hourly wages.

Murren said having a uniform pay structure will make it easier for current MGM Mirage dealers to transfer between properties once hiring begins at CityCenter, a development projected to cost USD 8.1 billion to USD 8.4 billion. He also said the increased pay scale might keep some company dealers from fleeing for new positions being created at the USD 2.9 billion Fontainebleau and the USD 2.2 billion Encore, which are expected to compete with CityCenter for employees.

„Obviously, there is a wide array of competition coming into the market,“ Murren said. „We wanted to create the right avenues to keep our best workers.“

Murren said no other changes in the company’s dealing structure would be made, including a move similar to what Wynn Las Vegas executives did in September 2006, when the hotel-casino implemented a new tip pooling program that significantly reduced dealers‘ take-home pay.

Some casino managers and casino supervisors were added to the list of those who qualify to share in Wynn’s oftentimes lucrative tip pool. Management said it started the policy to correct a pay disparity that had dealers earning more than their supervisors.

„(MGM Mirage Chairman) Terry Lanni has been very clear that we would not establish that program,“ Murren said. „No one has been more firm on this than Terry.“

The program led to employee unrest at Wynn Las Vegas and, eight months later, casino dealers voted by a 3-to-1 margin in favor of representation by the Transport Workers. On the eve of the vote, Wynn Resorts Chairman Steve Wynn apologized to the dealers, saying it had been a mistake to implement the controversial program.