Atlantic City casinos could lose $1m in EBITDA daily during strike, says union
Labour union Unite Here Local 54 has estimated that Caesars Entertainment and MGM each risk losing $1m (£813,153/€943,067) per day in earnings before interest, tax, depreciation and amortisation (EBITDA) if casino workers go on strike in Atlantic City.
Unite Here’s members provide cleaning services for hotel rooms, gaming floors and restrooms across Atlantic City.
The union released the figures in a strike impact report, which was issued following a vote from workers at five Atlantic City Casinos– which passed with a 96% majority on 15 June.
The vote included workers at all three Atlantic City casinos operated by Caesars Entertainment- Caesars, Harrah’s, and Tropicana.
It also included staff at MGM Resorts Entertainment’s Borgata casino and the Hard Rock casino.
The report estimated that the strike could cost Caesars approximately $1m per day in EBITDA. This is assuming that Caesar’s Q3 2022 results would have a 10% year-on-year increase, and that the strike results in a yearly decline of 25% in net revenue.
Meanwhile, the strike could cost MGM’s Borgata approximately $1.6m in EBITDA, with the same assumptions in place.
According to the report, the strike could cause a disruption in operations that would affect food and beverage availability, cause a decrease in customer service and cause a reduced hotel room occupancy.
The report also stated that the effects of the strike could be amplified by the tight labour market.
The last Unite Here strike occurred in 2004.
The strike deadline – which is set for 1 July – falls just before the 4 July holiday, which is also when the third quarter is expected to peak.
The paper also noted that Caesars received 15% of its earnings last year from its Atlantic City properties, and is therefore at significant potential exposure to the industrial action.