Q3 revenue could decline by 25%

Atlantic City casino workers union warns properties could face $2.6M in daily losses if strike called in July

2022-06-27
Reading time 2:06 min

Only days before a potential strike against various Atlantic City casinos, the casino workers union has warned that a strike could cost four casinos a total of $2.6 million a day in losses. Local 54 of the Unite Here union said Borgata could face a $1.6 million loss; and Caesars, Harrah’s and Tropicana could collectively lose up to $1 million a day.

The union’s projections were detailed in a report issued Friday, which was done based on past casino revenue reported to the state. The report assumes that a strike would cause revenue to decline by 25% in the third quarter of this year compared to the same period in 2021.

The report pointed out that a strike could have a particularly meaningful impact on Caesars Entertainment, which got 15% of its earnings from Atlantic City during the third quarter of 2021. Last year, Caesars’ New Jersey properties generated 33.2% of their net revenue and 42% of their gross operating profit in Q3. 

The union also noted that the timing of a strike could “be painful” for the casinos, as it comes at the start of the July Fourth weekend, traditionally one of the busiest times of the year for the city’s casinos. Local 54 of the Unite Here has authorized a strike against these four casinos on July 1 if a new pact on contracts, which expired on June 1, is not reached by then. The union has now also set a July 3 strike deadline for Hard Rock, whose finances are not included in Friday’s projections.

As reported by The Associated Press, Jane Bokunewicz, director of the Lloyd Levenson Institute at Stockton University, which studies the Atlantic City casino industry, said the financial impact of a strike is difficult to predict accurately given there are many variables in play, which include the number of targeted casinos, and the public’s willingness to patronize them in such an event. 

She said that the casino floors at all properties would remain functioning as normal "because they are not part of Local 54." Casinos that are struck could use nonunion employees and management to keep the property sites operating at an acceptable level. Revenue losses or gains would depend on how successful they are at doing this. 

As of Friday, the union had reached so-called “me-too” agreements with Bally’s and the Ocean Casino Resort, pledging them to adopt the terms of contracts eventually reached with the larger casinos in the city. According to the Union, that effectively means they would not be subjected to the strike, which would come amid an ongoing labor shortage at all nine casinos.

The threat of a strike also takes place as the city prepares to host the national National Association for the Advancement of Colored People (NAACP) convention on July 14-21The union seeks significant wage increases in the next contract to help workers deal with financial setbacks caused by the coronavirus pandemic and rapidly rising prices.

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