Gaming Strategy
Featured Stories
Legal News Financial News Casino Opening and Remodeling News Gaming Industry Executives Author Home Author Archives Search Articles Subscribe
Newsletter Signup
Stay informed with the
NEW Casino City Times newsletter!
Jeff Simpson Archives
More Strategy Experts

Jeff Simpson Gaming Guru

Jeff Simpson

Why Strip resorts need to end nightclub tipping shakedowns

17 March 2008

By Jeff Simpson, Las Vegas Sun
LAS VEGAS, Nevada -- Like many readers of the Sun, I was appalled by the story in last Sunday's paper about the Las Vegas family that was shaken down for hundreds of dollars in tips by the staff of LAX, a nightclub at the Luxor.

I've written several columns about the importance of excellent customer service, and after reading Sun reporter Jeff German's story, I'm convinced that — if the squeeze put on the customers in the story is the norm rather than the exception — Las Vegas resort operators need to take immediate steps to eliminate tipping shakedowns in nightclubs in their properties.

In German's story LAX staff pressured John and Tina Henderson for tips as they celebrated their daughter Marissa's 21st birthday by taking her and her friends to the club.

Even though the group had a reservation for two small tables, a doorman put his hand out when the Henderson party tried to enter the club.

"It starts here," the doorman told him, John Henderson said. When Henderson asked how much he'd have to tip, the doorman told him, "A hundred dollars will get my attention."

Henderson paid, only to be handed off to three more money-grubbers.

A hostess collected $50 to look up the table reservation.

A maitre d' was given $100 to lead the party into the club.

A host was given $100 to take them to their tables.

Later, a man claiming to be a "security guy" came over to collect $100 to ensure the group's safety at the club.

The group also paid $120 in $20 increments to be able to avoid long lines to use the restrooms.

All of these tips came on top of tips given to the waitress and busboy as well as the group's $1,378 bar tab, which included a 28 percent service charge.

My first reaction to the story was to think that I would never have paid the tips, and would have left.

But the Hendersons wanted to celebrate their daughter's birthday and didn't want to spoil the evening, so they paid. And paid and paid and paid some more.

Certainly many Las Vegas visitors do the same every evening.

I don't object to tipping; in fact, I think tipping generously is a good thing, and I regularly tip folks: valet parkers, poker dealers, dice dealers and, of course, waiters and waitresses.

But the tips John Henderson told German about were not gratuities. They were demanded payments.

Although a 28 percent service charge seems high to me, I don't have a problem with it if the number is disclosed up front.

And then, if the club wants to divvy that money among the waitress, busboys, hosts, doormen and even "security guys," fine.

And if a customer wants to tip above and beyond the service charge, fine.

But the shakedowns need to stop.

Casinos that operate their own clubs (Wynn and Station Casinos among them) say they aren't allowing their workers to put the squeeze on customers. The many casinos that don't operate clubs themselves (including LAX at Luxor and Pure at Caesars, run by Pure Management Group) need to make sure the operators know that the casinos won't stand for customer shakedowns.

Nightclubs have become significant moneymakers for casinos, and an evening out at the nightclub has replaced an evening at a production show for many younger customers.

Casinos need to protect their new moneymaking assets and emphasize customer service in the clubs rather than maximizing cash extraction.

The patrons who are shaken down for ridiculous tips aren't going to go back to Phoenix, Chicago or Newport Beach, Calif., and complain about the nightclub operators.

They'll tell their friends how they were ripped off at Luxor or Caesars Palace. Or, even worse for all of us, in Las Vegas.

It's time for our resorts to stamp out tipping shakedowns in nightclubs.

Copyright © Las Vegas Sun. Inc. Republished with permission.


Jeff Simpson explains why he doesn't think Signature towers buyers will win in court

3 March 2008
LAS VEGAS, Nevada -- Last week I met six of the folks who are suing MGM Mirage because they believe they were misled about their purchase of condo-hotel units at the Signature towers at MGM Grand. They thought the condo sales staff had drastically overstated how much revenue they'd collect from their ... (read more)

Jeff Simpson on the big guys who are betting that the future of Vegas is still unlimited

18 February 2008
LAS VEGAS, Nevada -- Now is the time for all the Chicken Littles to come out of the coop and start warning Las Vegans about the falling sky. As if the extended housing slump, credit crunch, skyrocketing utility costs, high gasoline prices and a possible national recession aren't enough to worry ... (read more)

Tropicana workers face more challenges

28 January 2008
LAS VEGAS, Nevada -- You have to pity the workers at the Tropicana. Already faced with meat-ax cuts to staff and operational budgets that have destroyed morale and come close to turning the property into a dump, workers are now facing even more indignities at the hands of the Kentucky-based half-wits ... (read more)

Next 10 Articles >