Las Vegas Strip Casinos Pocketing More Money From Fewer Workers, Expert Points to Automation
Posted on: September 10, 2018, 02:33h.
Last updated on: September 10, 2018, 02:47h.
No four-mile stretch of land in America receives the constant aesthetic overhaul that the Las Vegas Strip does. Decades of constant construction have rendered the current version of the Strip unrecognizable from the good old days of the Stardust and Riviera.
But according to one casino expert, the biggest change to the face of Las Vegas has been fewer human faces.
Gaming expert and researcher at University of Nevada Las Vegas David Schwartz writes in Forbes that the advent of automated technology along the Strip is allowing casinos to pocket more money while cutting back on the cost of employees. Schwartz reports that gaming employees on the Las Vegas Strip represented 32 percent of all casino employees in 1990. That number today is now 23 percent.
Despite that reduction in work force, gaming workers produce on average $105,000, compared to $53,000 in 1990. The average annual production of a Strip gaming employee has increased by 158 percent while the cost of employment to the company has only increased by 118 percent.
The 40 point gap between rising casino revenues and employee payroll represents a significant boon to casinos,” Schwartz writes in Forbes. “Casinos were able to achieve this increase in productivity by investing significantly in technology that allowed them to reduce the number of employees involved directly with gambling.”
This has happened, Schwartz says, because casino floors have fewer employees who are working harder and more technology to replace the ones whose jobs weren’t necessary. For example: kiosks that can cash tickets for gamblers instead of a fully-staffed cashier’s cage.
Taking a Stand
Fewer people are working harder than before, according to Schwartz. More robots + harder workers = more money
While this might be an efficient model for casino executives, it isn’t an idea that sits well with employees. When those workers had the chance to voice their displeasure this summer, they took to the streets.
Automation was a major aspect of this summer’s contract negotiations between the Culinary Union—the powerful Las Vegas workers union that represents the city’s hospitality workers—and several Las Vegas casinos.
As contract discussions dragged on throughout the early part of the summer union workers protested against automation; while at the negotiation table the Culinary Union demanded language that protected workers from losing their jobs to robots.
After the Culinary Union reached a contract agreement with Caesars Entertainment in June, Secretary-Treasurer Geoconda Arguello Kline said: “This innovative contract sets clear goals regarding technology and automation for worker retention, job training, advance notice of implementation, and severance package.”
The Culinary Union represents 50,000 hospitality employees in Las Vegas—including bartenders, housekeepers, servers, table game dealers, and kitchen staff.
Needing the Money?
Casino executives might have a greater appreciation for the money the robots have saved them after the most recent report from the Las Vegas Convention and Visitors Authority. Recent data shows a 5.8 percent drop in revenue at Strip casinos in July, compared to the year before. It marked the first month since January in which Strip revenue dropped.
August revenue totals aren’t expected to exceed last year’s, either. The buzz of last year’s Conor McGregor-Floyd Mayweather fight led to a 21 percent revenue surge in August 2017 that will be difficult to match this year.
LVCVA data from June and July show that occupancy in Las Vegas Strip hotel rooms has decreased by 2.6 and 3.2 percent respectively in the summer months.
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