Faced with more Wall Street firms seeking casino ownership, the country’s largest casino workers union is asking regulators to make protection of workers paramount when considering ownership changes.
UNITE HERE has approached regulators in New Jersey, Nevada and Ohio stressing concerns that hedge funds and private equity firms are focused on short-term profits and not maintaining properties for the long haul.
Bob McDevitt, president of the union’s Local 54 in Atlantic City, said private equity ownership has severely hurt the casino industry job market in New Jersey. He cited private equity ownership components of Caesars Entertainment, which owns the Caesars, Harrah’s and Bally’s casinos in Atlantic City, and MGM Resorts International, which owns the Borgata.
McDevitt specifically pointed to Caesars closing down the Showboat casino hotel in 2014 despite the fact that casino was still turning a profit.
McDevitt told the Associated Press that private equity “has been a disaster for Caesars Entertainment, the workers and for Atlantic City. No one should have a license to strip money out of someone’s pocket. We’ve been down this road before. Casinos were closed and thousands of jobs were lost. We don’t want to go through another five to 10 years of vanishing jobs so a few guys can make money.”
McDevitt also pointed to examples where Wall Street firms have affected major changes in casino companies despite holding a relatively small amount of equity in the companies.
According to the AP, as recently as 2010, nine of the 11 casinos operating in Atlantic City were owned by hedge funds or private equity firms. Four of them – the Showboat, the Atlantic Club, Trump Plaza and the Trump Taj Mahal – were shut down.
James Plousis, chairman of the New Jersey Casino Control Commission, told the wire service that his agency will carefully review changes in ownership.
“We will do our due diligence on all these applications as they come forward,” he said.
In a related story, Atlantic City’s UNITE HERE Local 54 has reached a contract agreement with the Hard Rock casino in the resort.
The Boardwalk casino and the labor union agreed to terms of a contract, according to a statement from the New Jersey State American Federation of Labor & Congress of Industrial Organizations. The deal covers about 1,780 casino employees.
“It has been a very, very positive and progressive negotiation,” said McDevitt, praising Hard Rock executives for being intimately involved and invested in discussions.
McDevitt said he was anticipating overwhelming support for ratification of the contract terms from Local 54 members.
If the new contract is accepted by both parties, Local 54 would represent close to 10,000 casino employees in Atlantic City. The union’s members include housekeepers, bartenders, servers and other hospitality workers.
Hard Rock opened June 27 at the site of the former Trump Taj Mahal Casino Resort.
