MGM ups ante for dealers

Feb 27, 2008 2:30 AM

By David Stratton | MGM Mirage last week announced it was "raising the bar" – as well as a few eyebrows – for its dealers on the Strip by increasing their base wage rate from $6.33 an hour to $7.75 an hour.

The 22.4 percent increase was effective Monday, and approximately 5,100 dealers at MGM Mirage’s 10 Strip casinos were notified Friday by letter, which also announced that dealers would be receiving cost of living increases every April.

"I think we made a lot of people happy today," MGM Mirage President and Chief Operating Officer Jim Murren said on Friday. "We felt we wanted to raise the competitive bar here as we look for the best and brightest employees, as well as strive to be the employer of choice."

Murren added that the rate increase was also the "final and important piece of the puzzle" in unifying pay and benefit packages that were complicated by buyouts of Mirage Resorts in 2000 and Mandalay Resort Group in 2005.

 "The dealers’ pay rates were all over the board … as well as benefit programs, training programs and work policies," Murren said. "If we are to be a leader in the community, then we need to standardize ways to compensate our dealers."

Murren pointed out that the changes weren’t in anticipation of any collective bargaining negotiations that might be on the horizon.

"We’ve been wrestling with this issue since 2000, long before any noise (over union organizing) was being made," Murren said.

In addition to enhancing pay and benefit packages to attract qualified employees, standardizing of benefits will facilitate dealers moving from property to property, Murren said.

"Besides improving income in difficult times, this creates a wide avenue for people who choose to look for new opportunities within our company," he said.

Specifically, MGM expects to fill at least 1,000 dealer positions when its CityCenter project opens this time next year.

Many of those jobs will be filled by dealers from other Strip properties, which will also be faced with filling vacated positions.

Over the weekend, several dealers contacted by GamingToday expressed joy as well as surprise at the wage increase.

"Of course, most of my income still comes from tips, but this sure helps," said a dealer at the Luxor, who spoke on condition his name not be used. "Considering we’re supposed to be in a recession, this certainly came as a welcome surprise."

Indeed many dealers were surprised at the increase, which is expected to cost MGM Mirage over $10 million a year.

But, Murren said, the company wanted to "make a statement," despite a slowing economy in which some gaming operators are laying off staff – as much as 20 percent for one locals-oriented company.

"We’ve been through tough times as an industry, but we’re here for the long term," Murren said. "If you have a commitment to the community this is not a time to pull in your horns … it’s a time for leadership."