© Reuters. FILE PHOTO: An exterior view of MGM Grand hotel and casino, after MGM Resorts shut down some computer systems due to a cyber attack in Las Vegas, Nevada, U.S., September 13, 2023. REUTERS/Bridget Bennett/File Photo
By Doyinsola Oladipo
NEW YORK (Reuters) -Thousands of hospitality workers in Detroit walked off the job on Tuesday after unions called for strikes at casinos operated by MGM Grand Detroit operated by MGM Resorts (NYSE:) International, MotorCity Casino and Hollywood Casino at Greektown operated by Penn Entertainment.
The Detroit Casino Council (DCC) called the first strike in its history after negotiations which began in the summer did not yield a new contract. The workers are seeking better wages to keep up with inflation, workload reduction as well as improved healthcare and retirement benefits.
“They are not budging on a fair wage,” said Gwen Mills, Secretary-Treasurer of Unite Here, one of the unions involved in negotiations. “We took almost flat wages through the pandemic and now expect to share in the prosperity that they’re experiencing.”
On Sept. 29, 99% of voting workers from all unionized groups at the three Detroit casinos voted to authorize the DCC to call a strike if negotiations weren’t progressing.
The DCC negotiating committee is made up of five unions including Unite Here Local 24, United Auto Workers (UAW), Teamsters Local 1038, Operating Engineers Local 324, and the Michigan Regional Council of Carpenters representing 3,700 casino employees.
The committee estimates the strike would risk $3.4 million in operator revenue per day, with the greatest impact to MGM Grand Detroit at $1.7 million per day.
MGM, in a statement, said it will continue to operate during the strike. “We’ve made six proposals to the union and our current offer includes the single largest pay increase in the history of MGM Grand Detroit,” the company said.
When casinos struggled during the pandemic, the DCC in 2020 agreed to a three-year contract extension with 3% annual raises but inflation in Detroit has risen 20% since then, according to a DCC statement issued on Monday.
Industry gaming revenues have surpassed pre-pandemic levels, with the Detroit casino industry generating $2.27 billion in 2022, according to the DCC negotiating committee.
MGM shares rose fractionally on Tuesday. Penn Entertainment shares were up 3.4%.
MGM is also negotiating with the Culinary Workers and Bartenders Unions in Las Vegas for a new contract as unions across a range of industries in the United States bargain for better working conditions. In Las Vegas, the unions represent about 40,000 workers employed at casinos including those operated by MGM, Caesars (NASDAQ:) Entertainment and Wynn Resorts (NASDAQ:).
