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Benjamin Spillman

LABOR: 'Big deal' for two casinos

16 October 2007

LAS VEGAS, Nevada -- Las Vegas casino and hotel workers struck a tentative labor deal Monday with two downtown properties, setting the stage for more pacts between casino owners and unionized employees elsewhere on Fremont Street.

The deal covers about 900 workers from Culinary Local 226 and Bartenders Local 165 at the Main Street Station and Fremont casinos. Union members scheduled a ratification vote Saturday.

By striking a deal that met a union-set deadline, Boyd Gaming Corp. ensured labor peace at its two unionized properties downtown and set a framework that could aid negotiations with similar properties.

Pilar Weiss, political director for the union, said the Boyd deal addresses the issue of job security, a concern for downtown workers who have seen several Fremont Street-area casinos change hands in recent years.

Weiss wouldn't detail specifics in advance of the ratification vote but said, "we are thrilled," with the contract.

A spokesman for Boyd Gaming Corp. did not return calls for comment.

The Culinary union has plans to negotiate Wednesday with the Golden Nugget and Thursday with a group that includes the El Cortez, Western, Plaza, Las Vegas Club, Four Queens and Fitzgeralds.

Jeremy Aguero, a principal with the Las Vegas research firm Applied Analysis, said that by making job security an issue in labor talks, the union and casinos are looking beyond the stagnant economics of some properties and considering the long-term prospects of the downtown casino market.

"They are all sort of gambling on what's going to happen next downtown," he said.

Negotiations this week coincide with deadlines the union set to make deals at the properties.

Monday was the deadline for Boyd-owned Main Street Station and Fremont. Thursday is the deadline for Golden Nugget. The group of six lower-profile properties also faced a Monday deadline, but negotiators on both sides agreed to play it cool until Thursday, when the two sides could meet for talks.

"They have agreed because of scheduling there won't be a job action," said Gregory Kamer of the law firm Kamer Zucker Abbott, which represents the Golden Nugget and the group of six.

Kamer explained why the Boyd deal foretells progress for upcoming talks.

"Each settlement builds on every other settlement," he said.

There are about 5,000 unionized workers downtown. Most of them want to maintain health insurance plans that don't require out-of-pocket payments and job security in the event their employers shut down for redevelopment.

The job security provision would be new to the downtown market, an area where at least six of 11 casinos with union workers have changed hands since 2004.

"I think for all of downtown it is a big deal," said Weiss.

Weiss said job security was part of the contract at the Boyd-owned Stardust, which closed last year. She said the union hoped Boyd would be willing to include similar protection for its downtown workers, a move that would make the provision look less risky to other downtown owners.

"They sort of set the bar with some of that language with the Stardust," Weiss said.

Whether struggling downtown casinos can afford beefier labor deals remains in question.

The market has been stagnant or in decline more than a decade. Last year, casinos downtown collected $630 million from gamblers, about 7 percent less than their haul in 1997.

In recent months the market has perked up a bit, with casinos posting a 7.4 percent gain from the beginning of the fiscal year July 1 through August 31.

If the uptick were to hold steady all year, it would be the biggest year-to-year gain for downtown since a 5.7 percent increase in 1996. That's a big if.

"It is too early to tell," said Frank Streshly, senior research analyst for the Nevada Gaming Control board. "We do have a soft national economy right now."

The uncertainty hasn't dissuaded investment, at least in some properties.

Landry's Restaurants has poured about $170 million into the Golden Nugget since it bought the casino and a sister property in Laughlin in 2005. It has plans to spend $150 million in the form of a new 500-room tower at the Las Vegas property.

El Cortez owner Jackie Gaughan has invested about $20 million in his property recently, upgrading the rooms, the exterior facade and the casino.

Four Queens owner Terry Caudill recently completed his own $20 million renovation of the Four Queens. He followed it up with a deal to purchase Binion's, which is across Fremont Street from the Four Queens, for $32 million.

Aguero said the investment is a reflection of optimism about the future, not robust revenue in the present.

"All of that is predicated based on the concept of return on investment," he said.

Investment in downtown remains precarious, he said, especially if a protracted labor dispute were to disrupt visitors.

"Downtown has enough problems," he said. "If there was that type of strife that would just give people another reason to not go downtown."

LABOR: 'Big deal' for two casinos is republished from