Atlantic City's casino workforce may not recover from lost wages, tips caused by closings, union leader says
The financial consequences of Atlantic City’s casino shutdown have spread to the work force, with thousands of employees seeing their wages and tips washed away by Hurricane Sandy.
One union leader doubts that workers will ever be able to fully recover from going several days without pay.
“It’s gone,” said Bob McDevitt, president of Local 54 of UNITE-HERE. “There’s no one to go to. They haven’t been out of work long enough for unemployment and the casinos are not going to pay them back.”
Casinos shut down on Sunday as Hurricane Sandy threatened the New Jersey coast. There was no immediate word Wednesday when they might reopen in the storm-ravaged town, according to the New Jersey Division of Gaming Enforcement.
McDevitt criticized state officials for allegedly not being open enough with the public about a possible reopening date.
“It’s a state secret,” he said. “It seems to me like there’s political jockeying going on. People have to plan their lives. People are getting frustrated. I just hope they make the announcement as soon as possible.”
McDevitt drew parallels with the three-day casino shutdown in July 2006, which was caused by a state budget crisis. Employees suffered lost wages then and were hit again when Hurricane Irene forced the casinos to close for three days in August 2011.
“That’s a huge, huge problem,” McDevitt said. “People are living day to day. Housekeepers are going to lose four or five days of pay. Even if they want to come in to work, they can’t.”
Local 54 is the casino industry’s largest union, representing about 14,000 housekeepers, bartenders, cocktail servers, cooks and other service workers. McDevitt said the union is studying ways to help soften the shutdown’s blow on union members.
Tony Rodio, president of the Casino Association of New Jersey, an industry trade group, estimates the casinos are collectively losing about $5 million each day in gambling revenue.
The shutdown is costing them not only winnings from their casino operations, but also millions of dollars in revenue from nongambling sources such as hotel rooms, bars, restaurants and retail stores.
Wall Street analyst Andrew Zarnett, of Deutsche Bank, estimates the 12 casinos will generate about $236 million in revenue from their slot machines and table games in October, a 10 percent decline from a year ago.
Even worse, if revenue from the newly opened Revel megaresort is removed from the equation, the results for the 11 casinos that were operating this time last year will be down approximately 25 percent for the month, Zarnett said.
“While a hurricane isn’t an ideal situation for anybody, this is especially bad for Atlantic City, which has been struggling with the negative impact from competition and additional supply in the Northeast,” Zarnett wrote in a note to investors.