Sunday, May 24, 2009

Unions Heart Sands and Sheldon!

No, your eyes do not deceive you. Despite Las Vegas Sands and CEO Sheldon Adelson in particular being seen as Public Enemy No. 1 by the unions in Las Vegas, this was a full-page ad in the Express-Times in Bethlehem on Friday celebrating the opening of the casino there. (I had to scan in three parts and piece it together).

I asked LVS spokesman Ron Reese about this odd turn of events. He proudly reported that the Sands Casino Resort Bethlehem is "100 percent union built."

He said they used "some" union labor for building the hotels in Las Vegas. But he had a grin on his face that told me I was not wrong to find this all quite ironic. It was only earlier this month that litigation between LVS and the Culinary 226 in Las Vegas over issues related to the opening of Venetian in 1999 were finally fully ended. The Venetian-Palazzo is the largest non-union shop on the Strip and the halls of the Culinary's downtown offices are adorned with photos of massive protests against Adelson. I want to say there's even photos of people holding pickets in which Adelson has the devil's horns on him.

Yet in the Keystone State, they're 100 percent union built and proud of it! (The service workers are not union, though.) Not only that, but the company spent $743 million to build a casino in a jurisdiction where they'll have to hand over 55 percent of the gaming revenue to the state!?!

What does Bethlehem and Harrisburg have that Vegas and Carson City don't? Anyone?


Anonymous said...

How can this place make any money if they have to hand over more than HALF, 55% of their revenue to the state. Thats insane. How can any LVS shareholder be happy with that deal. I think this casino is just destined for doom. Its nothing more than a bunch of slot machines with no real table games.

Anonymous said...

"What does Bethlehem and Harrisburg have that Vegas and Carson City don't? Anyone?"
Millions of blue collar/no collar daytrippers within a 90 minute drive who just want to play slots for the day and go home. Your video interview with the lady who lives across the street shows how happy locals are to see Bethlehem revived. With the strong union base in the Northeast, LVS will get huge support from union members.
LVS must think they have a winner if they're planning to add another 2,000 slots in the future.

Anonymous said...

You seem to like taxes. Maybe LVS can afford the high tax rate on gaming because they have limited competition. If Nevada wants a higher tax rate, they should shut down most of the casinos, fire the people, and leave only a few places that will have enormous cash flow available for the tax man. As for the employees of closed places, eh....who needs the little guy as long as government will have the green to spend?



Now, now, SG. It's not that I "like" taxes, per se, but I was fascinated by the concept. Are there any other businesses in this country that turn over more than half their revenue to the government? And isn't it at least interesting to you that the company that claims taxes will strangle business on the Strip would spend half of a Palazzo to build a smaller resort somewhere else and pay dramatically higher taxes there? Your argument makes no sense as an explanation of the business models at work here. I'm not advocating a 55 percent gaming-revenue tax, but I don't see why if it works in PA and Adelson thinks the deal is good enough to spend $743m to partake, it wouldn't work in Vegas. It would only be a competitive disadvantage if some of the companies in Nevada had to pay it and not all.

You're also writing at a moment when a state with a joke of an educational, infrastructure and health care system is trying to figure out how to cut even more from its budget because of the economy and the organization of its tax base. This is a state that fails to provide even the most basic services that other states provide and that is crippling its potential for any form of diversification. So you can offer up that extreme and ridiculous scenario or you can look at the actual numbers. I don't know what the solution is and I'm certainly not advocating anything in particular, but the notion that the state of Nevada spends too much money seems bizarre to me. It also seems bizarre to Sen. John Ensign, who said in April, "They can’t afford the types of cuts being talked about for education."

Anonymous said...


Again, show me where the competition is for LVS in Bethlehem? There isn't any in state yet, and they have a some pretty good markets close by (they are closer to Philly than AC is). On the strip there is truly intense competition at every address up and down Las Vegas Boulevard and elsewhere. If they had a monopoly in Vegas or even very limited competition, the operators would probably be willing to pay extra taxes for the privilege, but somehow I bet the total received by the state would end up being less considering there would be less gaming and fewer employees. As it is structured in Vegas, they have to compete in terms of the quality of the building (more cost), quality of staffing (more dollars), etc. to a much greater degree then in a market that is access restricted.

As for Nevada's current situation and the rest of the states. So be it. State governments grew too much and pay too much both to current employees and in retiree benefits at the expense of everyone else in the state. The states haven't even considered funding those retirement obligations or promises and don't publicize those numbers very often. I believe I read that the average pay for a Nevada state employee is comfortably above average for the state and the benefits are even more so. These are for jobs with very little economic risk and with civil service protections, I dangerously presume. These issues need to be corrected before reaching further into people's pockets either directly or indirectly. Of course this would mean taking on very powerful government employee unions. Most politicians don't have the stomach for that fight.

Yes, I can think of an industry where the government takes even a greater percentage of the revenues: Tobacco. If you add up all the federal, state, and local taxes included in a pack of cigarettes, it comfortably exceeds what the manufacturer even dreams of getting out of each pack sold.


MOB said...

"What does Bethlehem and Harrisburg have that Vegas and Carson City don't? Anyone?"

It's called a bigger "set".

Ronald said...

The Amish?

jinx said...

For many of non-Nevada casinos that aren't tribal owned, you'll find them with a rather large chunk of revenue given to the state. I don't know the exact numbers but I believe Illinois, Indiana, and possibly Michigan are fairly high. With Illinois possibly being at 50% or so. These places are given license to print money though, as there aren't any options as convenient.

Which also leads to horrible odds for the average consumer.

Anonymous said...

Actually, the Venetian in Las Vegas was built with union labor. The decision by the Trades to support Adelson in Vegas (as well as Station Casinos) is one of the reasons there is little love lost between Culinary and the Building Trades.

Anonymous said...

Trees? Vegas has few and Carson city is the beginning of the high desert so it's not very green unless you look West.

A big problem with Vegas' education system is that the people there generally have low human capital. A moderately intelligent person can a job in the casinos making enough for a pretty good life without getting a college degree. Only the housing bubble put this out reach for a lot of people. There are a lot of other factors besides money that determine school quality. Yes, the schools are a problem but only so far as the people themselves don't value what they offer.