UNITE HERE Estimates $1 Million Dollar Losses per Day Possible for Both Caesars Entertainment and MGM Resorts International if Atlantic City Strike Occurs

Rhea-AI Summary

The UNITE HERE Local 54 union in Atlantic City has projected significant financial losses for Caesars Entertainment (CZR) and MGM Resorts (MGM) due to potential strikes. Caesars could face losses of $1 million daily across its three casinos, while MGM's Borgata may see losses of $1.6 million per day. This is based on a projected 25% revenue drop in Q3 2022 compared to Q3 2021. A 96% majority of union members authorized a strike, with deadlines set for July 1 and July 3, 2022. The union demands substantial wage increases amid rising industry profits and labor shortages.

Positive

• Union's support for higher wages reflects a strong labor position amid rising industry profits.

Negative

• Potential strike could lead to significant daily losses of $1 million for Caesars and $1.6 million for MGM.
• Projected 25% decline in Q3 2022 revenue compared to Q3 2021 poses a severe risk to profitability.

UNITE HERE Union Estimates Show Exposure to Strike Risk

ATLANTIC CITY, N.J.--(BUSINESS WIRE)-- Today, UNITE HERE Local 54, the largest union of casino workers in Atlantic City, released estimates of potential financial impacts of a strike of its members.

The union projected that Caesars Entertainments’ (NASDAQ: CZR) three casinos could collectively lose $1 million per day and that market-leader MGM Resorts’ (NYSE: MGM) Borgata could lose $1.6 million per day assuming that the strike causes a Q3 2022 net revenue decline of 25% compared to Q3 2021.

Atlantic City is particularly important to Caesars. Last year, approximately 15% of its third quarter profits were generated in the Atlantic City market, according to union estimates.

Workers at all three Caesars operated casinos – Caesars Atlantic City, Harrah’s Atlantic City, and Tropicana Atlantic City – as well as Borgata and Hard Rock voted to authorize a strike with a 96% majority on June 15^th. UNITE HERE Local 54’s negotiating committee is now authorized to call strikes at any of the five properties at any time. The union announced a strike deadline of July 1^st for the Caesars and MGM properties and July 3^rd for Hard Rock if no agreement has been reached. The strike deadlines fall just ahead of the July 4^th holiday.

The union is seeking substantial wage increases at a time of rising industry profits and an ongoing labor shortage. On June 22, the City Council of Atlantic City voiced its support in a unanimous resolution that called for higher wages in the casinos and called on casino operators to negotiate in good faith to avert a strike.

To read the union’s full report, click here.

UNITE HERE Local 54 Atlantic City has been representing hospitality workers in the hospitality industry for over 100 years. Our members work as housekeepers, bartenders, cocktail servers, cooks, bellmen, doormen, and other service jobs in the casinos and hospitality industry of South Jersey and Eastern Pennsylvania. With over 10,000 members, Local 54 is the largest private sector union in the region. Local 54 is an affiliate of UNITE HERE, an international labor union that represents 300,000 working people across North America.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220627005127/en/

Bethany Holmes

bholmes@unitehere.org

Source: UNITE HERE

FAQ

What are the potential daily losses for Caesars Entertainment (CZR) due to a strike?

Caesars Entertainment could lose approximately $1 million per day if a strike occurs.

How much could MGM Resorts (MGM) lose daily in the event of a strike?

MGM Resorts' Borgata is projected to lose around $1.6 million per day.

What is the strike deadline for Caesars and MGM properties?

The strike deadline is July 1, 2022, for Caesars and July 3, 2022, for MGM properties.

What percentage of union members authorized a strike?

A 96% majority of union members voted to authorize a strike.

What revenue decline is projected for Caesars and MGM in Q3 2022?

A 25% revenue decline is projected for Q3 2022 compared to Q3 2021.