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Gaming Guru

Jeff Simpson

Jeff Simpson on Steve Wynn's Proposed Changes to Dealers Tips

23 August 2006

LAS VEGAS, Nevada -- If you want to see the wave of the future for pit bosses and tipped casino dealers at Las Vegas' most luxurious properties, check out Steve Wynn's plans to shake up his casino floor.

Wynn Las Vegas dealers - the highest paid in the city at a shade more than $100,000 per year, mostly from tips - will soon lose some of their tip income. Resort executives plan to reorganize the casino floor on Sept. 1, and to begin giving first-level supervisors a cut from the tip pool.

Dealers are expected to see their pay drop by about $10,000 per year, while some frontline supervisors would see theirs jump by more than 50 percent.

The high-rolling gambling action at the Wynn generates some big tips, money that now gets divided by casino dealers.

The problem is finding qualified floormen and pit supervisors. It's tough for the casino to get dealers, the most knowledgeable candidates, to accept a 40 percent pay cut to take a salaried position as a $60,000-per-year floorman or pit supervisor.

Wynn said the disparity in pay isn't fair.

"This is upside down," Wynn said. "It's inverted. It's just outrageous."

Wynn Las Vegas has 578 dealers. Of those, more than 100 have run shifts or been supervisors at other casinos.

"The current system makes the (200 supervisors and 38 craps boxmen) feel cheated," Wynn said.

The pay disparity has contributed to a reduction in the quality of the front-line managers, the folks who resolve game disputes, rate gamblers' play (how much is he betting and how long did he play?) and dispense comps such as free meals.

Wynn's solution? Reorganize the casino chain of command, and group dealers together with newly named frontline managers, who will now be "casino service team leaders." (Or, in the case of craps boxmen, they'll be renamed "craps team leaders.")

The casino is eliminating some of its top-level hierarchy. In the current chain of command dealers and clerks are supervised by floormen, pit supervisors and boxmen. They are supervised by pit managers, who themselves are directed by casino managers and assistant casino managers. At the top is the vice president of casino operations.

The VP of casino operations slot is being eliminated and each shift is being organized as a standalone entity. Each shift will have a casino manager at the helm with two specialists to assist him. The casino manager will supervise the service team leaders, who will manage one to four table games and their dealers along with a shared pit administrator who will handle regulatory and game inventory paperwork.

Wynn believes that by empowering talented people to run small groups of games that customer service will improve, leading to even stronger results from an already successful casino. Key will be finding people who understand the games and have good leadership ability, customer-service skills and judgment.

And that's where giving the frontline executives a salary increase and a share of the tip pool comes in.

Wynn said that most casino service team leaders will get 40 percent of a tip-pool share (dealers get a full share), but the combined tip and salary would boost their pay to about $96,000.

Craps team leaders would get 20 percent of a share of tip proceeds and would see their total pay increase from $52,000 to $67,500.

Wynn Las Vegas President Andrew Pascal doesn't expect any current employees to lose their jobs as a result of the reorganization. In fact, he expects to hire at least a few casino supervisors from competitors.

First, Wynn Las Vegas will collect expressions of interest internally. Some current dealers may want to be team leaders - and some managers may return to dealing, Pascal said.

Some of the dealers' lost tip income will be replaced by a bonus system that will reward customer service, adherence to procedures and attendance, Wynn said, noting that initial feedback from the affected dealers has been good.

"My dealers are the highest paid dealers in the world," he said. "They still will be. But I want them to think of becoming a team leader as a career move."

Nevada law allows casinos to divide tips among workers in the service chain, said employment lawyer Gregg Kamer, who worked on the plan with Pascal. The team leaders clearly are in the service chain, he said.

Wynn told workers about the changes in Monday evening meetings after flying back from Macau, where he's preparing Wynn Macau for its Sept. 5 opening.

If the Wynn Las Vegas changes work as planned, table game customer service will improve. That's a surefire recipe for increased tipping, and an improved Wynn Resorts bottom line. Wynn will more fully utilize his employees' talents, and he'll develop and attract top-flight managers as he builds a succession of new resorts on the property that surrounds the hotel.

"This gives me the chance to get the best people in the gaming industry," Wynn said.

I don't know if giving frontline casino supervisors a small cut of the tip pool would work at midlevel and low-budget casinos, but I suspect it wouldn't, as the tip pools are already much smaller than those at Wynn.

But at high-end properties where dealers make substantially more than the folks who supervise them, the change makes sense. When talented table game supervisors start leaving for better-paying jobs that include a share of the tip pool, I predict other high-end casinos will follow Wynn's lead.