Caesars avoids potential strike with Las Vegas unions after reaching agreement

Unions representing hospitality workers in Las Vegas have come to a tentative agreement with Caesars Entertainment Corp.’s Caesars Palace casino for a new labor contract covering approximately 10,000 employees.

The Culinary Workers and Bartenders Unions have stated that the five-year contract will cover various workers, including attendants, waiters, and kitchen staff at nine Vegas properties. However, the specific details of the agreement have not been disclosed at this time.

The negotiations come as the unions are advocating for higher wages, improved job security against new technology, reduced quotas for housekeepers, and enhanced safety measures. These demands are reflective of a larger trend across industries, as workers and unions are pressing for better pay and benefits in light of a shortage of workers and increasingly favorable public opinion.

The talks with Caesars Entertainment come amid record profits for casino-resort operators in Las Vegas, driven by a steady recovery in tourism post-pandemic. While visitor numbers in August were only 7% lower than pre-pandemic levels in 2019, room rates have surged by over 30%. The city is also preparing for major events, such as the Formula 1 Las Vegas Grand Prix, which is expected to draw over 100,000 tourists.

The unions have been in negotiations for approximately seven months and recently authorized a city-wide strike as leverage in the negotiations. As of now, talks with other operators like MGM Resorts International and Wynn Resorts have not resulted in an agreement ahead of the November 10 deadline for a strike.

Caesars’ shares rose about 3% in early trading following the announcement of the tentative deal, while MGM and Wynn Resorts saw increases of 1.6% and 0.5%, respectively. According to Truist analyst Barry Jonas, each 1% increase in wages could result in substantial additional labor costs for these companies. However, with the potential for a strike looming, the pressure is on for companies like Caesars Entertainment to make significant concessions to avoid disruption to their operations.