Despite tip-sharing, Wynn dealers still best-paid

Beginning Sept. 1, the luxury Strip resort began including frontline supervisors in the tip pool, part of a casino-floor reorganization that Wynn said at the time would improve service while keeping Wynn Las Vegas dealers the highest paid in the city.

„It is working exactly as we planned,“ Wynn said. „Tips are increasing, our dealers are still the highest paid – not just in the city, but in the world – and our most experienced dealers are volunteering to work as supervisors.“

No dealers have quit because the tip pool was diluted to include frontline supervisors, and the improved level of customer service is rapidly boosting tips and making up for the loss to individual dealer shares that diluting the tip pool caused.

In fact, Wynn said dealers made just as much in tips in February as they did in February 2006, and he predicted that dealer income would drop by less than the 10 percent to 15 percent he had originally estimated last summer.

Wynn told me before he implemented the change that dealers at the property made a bit more than USD 100,000 per year, mostly from tips, while floormen, boxmen and pit supervisors made about USD 60,000. With that disparity, he said it was impossible to get qualified dealers to volunteer for a promotion that would come with a big pay cut.

Wynn said that the pay disparity hurt the quality of his frontline supervisors, the folks who resolve game disputes, rate gamblers‘ play – how much did he bet and how long did he play? – and dispense comps like free meals and show tickets.

By reorganizing the structure of the casino floor, taking away some administrative and paperwork functions of the floormen, boxmen and pit supervisors while emphasizing their responsibility to provide excellent customer service while interacting with casino players, Wynn and his lawyers devised a plan that would allow the frontline supervisors to share in the tip pool without violating state law, which requires those sharing in the tip pool to directly provide service to the customer.

The pit supervisors and floormen were called „casino service team leaders“ and each was assigned to work with a team of dealers working one to four table games. Boxmen were renamed „craps service team leaders“ and assigned to one dice game.

Wynn increased the salaries of all of the supervisors and also gave them a share of the tip pool. By giving most of the team leaders 40 percent of a tip-pool share (dealers get a full share) and a salary bump, the average service team leader’s total annual income was estimated to jump from USD 60,000 to USD 96,000. Craps service team leaders, who received 20 percent of a tip-pool share, got an increase from USD 52,000 to USD 67,500.

The tip pool was diluted by the addition of the 200 supervisors (200 40-percent shares added an effective 80 full shares to the tip pool) and 38 craps boxmen (38 20-percent shares added an effective 7.6 full shares to the tip pool). Before Sept. 1, there were 578 dealers sharing the tip pool, each, on average, with one share. Beginning Sept. 1, each dealer kept an average of one share, but it was now one share out of 665.6 shares, which meant that each dealer share was diluted by 15.2 percent.

Wynn predicted that dealers would see their total earnings drop by about USD 10,000 or so during the first year, but said he expected that the casino floor reorganization would increase service levels on the floor, a change that would likely result in increased tipping.

The reorganization also eliminated some of the casino hierarchy. Before Sept. 1, dealers and pit clerks were supervised by floormen, pit supervisors and boxmen. Those frontline bosses were supervised by pit managers, who themselves were directed by casino managers and assistant casino managers. At the top was the vice president of casino operations.

Effective Sept. 1, the VP of casino operations position was eliminated and each shift was organized as a standalone entity, with each having a casino manager with two specialists to assist him. The service team leaders report directly to the casino managers.

Wynn said last week that the number of dealers has increased by 10 to 588 and that dozens of dealers have already been promoted to team leader positions. Hundreds of supervisors from other Strip resorts have applied for jobs at Wynn, with the increased earning potential a key reason, he said.

„The old system was unfair, and my regret is that I didn’t implement our new plan before Wynn Las Vegas opened,“ Wynn said. „It was a mistake, and it was unfair. Team leaders are more involved with serving the public than anyone.“

Wynn said he wasn’t concerned about Assembly Bill 357, a bill proposed by Assemblyman Bob Beers, the Green Valley Republican (not the longtime Republican legislator of the same name who is now a state senator). He said Wynn Las Vegas President Andrew Pascal is handling the property’s response to the bill, which he said would not become law.

Assemblyman Beers told me that he believes his bill, which would prohibit employers from including supervisors in the tip pool, has better than a 50 percent chance of being enacted into law.

I think Beers is wildly optimistic, and I’d estimate AB357 has zero chance of being passed by the Assembly and Senate, and that even if it did, Gov. Jim Gibbons wouldn’t sign it.

And I think the bill deserves to fail.

Outside of the casino business, how many frontline workers make two-thirds more than their supervisors? Very few.

And why shouldn’t table-game supervisors share in the tip pool? They provide valuable customer service. When I play craps or blackjack, the dealers are almost always pleasant, but it is the pit bosses and the boxmen who rate my play and reward it with comps.

Just because something is new doesn’t make it wrong. I think this is an example of a Wynn innovation that will ultimately prove to be a competitive advantage for his casinos (more talented supervisors and better customer service) while his dealers will continue to be the highest paid. Wynn dealers may even see their short-term loss replaced by a long-term gain in their own tip shares, with increased tipping more than offsetting the dilution of the pool.

I understand why dealers might oppose the Wynn tip-sharing arrangement, but I think the positives outweigh dealers‘ fears.

And for those who ask why Wynn Resorts doesn’t pay the extra money to boost supervisors‘ salaries, I’d say two things. First, the company is paying them substantially more from Wynn coffers, in addition to the tip-pool income. And second, Wynn Resorts is a business. Its mission is to return profit to its investors. There’s just no logical reason why frontline supervisors who provide regular service to customers can’t benefit from the tip pool.

No one can seriously claim that the Wynn dealers are being mistreated. They’re staying on the job and making more money than any other dealers. That’s evidence enough for me.

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