Virgin Las Vegas strike persists through F1, highlighting tricky history of unions in the city
With regard to the race itself, Mercedes’ George Russell and Lewis Hamilton finished first and second. Last year’s winner, Red Bull’s Max Verstappen, finished fifth, which was enough to clinch his fourth consecutive F1 title.
Stakeholders and analysts will now eagerly await the financial results from the second iteration of the event. Last year, Applied Analysis estimated the economic impact of the race to be $1.5 billion (£1.19 billion/€1.43 billion), the largest in Las Vegas’ history. The projection for this year’s race was less than $1 billion.
While last year’s race broke records, it was not free from drama. Construction and road closures caused massive traffic delays and even resulted in business disruption lawsuits for some. The city’s “Big 3” operators – Wynn Resorts, MGM Resorts and Caesars Entertainment – also faced a massive strike deadline from the Culinary Union in the days leading up to the race.
Ultimately, Culinary’s leverage was successful, as the union secured new five-year deals with all three. Approximately 40,000 workers from 18 properties received new contracts with 32% wage increases over the life of the deals and several other benefits. Culinary then used the same tactic in February in the days before the Super Bowl to leverage contracts from several independent operators around the city.
So, when the union began its strike against Virgin Hotels Las Vegas 15 November, it seemed like the trend would continue. But not so.
Strike nears two-week mark
At the time of writing (27 November), Culinary remains on strike at the off-Strip casino. Virgin has accused the union of trying to strongarm its way to a contract that “it knows is not economically viable”. This is presumably a reference to the terms of the other deals agreed to in the last year.
On 21 November, 57 Culinary members, including leadership, were arrested in a planned demonstration. In a statement, Virgin called the demonstration a “disappointing” way to “secure media headlines and photo opportunities”.
“It is even more disappointing that Culinary Union leaders are willing to consume critical police resources during one of the busiest weeks on the Las Vegas entertainment calendar,” the statement continued. “We believe that instead of being used as part of the Culinary Union’s theatrics, our first responders should be allowed to focus on keeping the local community and visitors safe.”
Was it always this way?
As Las Vegas continues to evolve and grow, so too does its relationship with unions like Culinary. Richard Schuetz, CEO of American Bettors’ Voice and a longtime casino executive and regulator, first came to Las Vegas in the early 1980s. Back then, Culinary’s membership was a fraction of what it is now, and the old guard wasn’t exactly privy to workers’ concerns.
“It has always been my contention that the industry in Las Vegas ended up with unions because they deserved to end up with them,” Schuetz told iGB. He added that the mindset at the time “was basically not to trust people,” which fostered animosity that has resulted in union growth ever since.
Las Vegas has now become a union capital of sorts, given that hospitality is the state’s largest industry. Over the years there have been several milestones in this evolution, including the famous Frontier strike. That strike, which lasted from September 1991 to February 1998, is one the longest and most notable in US history. It ultimately was successful for Culinary and its fellow striking unions.
Another milestone came in late August, when the Venetian-Palazzo agreed to its first union deal. This officially unionised the entire Las Vegas Strip and pushed Culinary’s membership up over 60,000.
Knowing when to pick your battles
While the Venetian deal was significant, it’s important to point to the underlying context. The casino’s previous owner, Las Vegas Sands (LVS) founder Sheldon Adelson, was staunchly opposed to unionisation. He successfully fended off Culinary for decades, and it wasn’t until the casino was sold to Apollo Global Management after his death that the union made inroads there. Apollo, which is not a casino operator by nature, had no desire for labour conflicts in its quest to maximise its multibillion-dollar investment.
That is another theme of Las Vegas’ union evolution. As the industry garners more outside investment and as casinos’ leadership changes hands, the desire to fight the unions has waned, especially for companies looking to rebound. By the time that Schuetz took over the ailing Stratosphere in 1996, labor strife was the last thing on his mind.
“Early on, I contacted John Wilhelm of HERE, and over lunch with him and Dee Taylor of the Culinary Union, we basically resolved all issues,” he explained. “The last thing I needed at the Stratosphere was labor unrest. Both John and Dee were always honorable in dealing with me, and I had the greatest respect for them both, understanding we did have differences from time to time.”
This sentiment of mutual respect is striking, and feels remarkably distant compared to today’s environment. The simplicity of two sides coming to agreement over a meal also feels lost to history.
Hard to tell whether pattern will continue
The dueling statements and dramatic demonstrations have a tendency to make negotiations feel all-important. And, in the case of last year’s F1 and Super Bowl, they were. But some, like Las Vegas-based consultant Brendan Bussmann, argue that the labour contract cycle is nothing if not predictable.
Bussmann, who previously worked for LVS, said that the process is often overblown. Both sides know when the deadlines are and what the other wants, and sometimes the clock runs out and strikes happen before a deal is brokered. But ultimately things quiet down until it’s time to negotiate again.
“It is a cycle that has existed in the 20-plus years I’ve been in Vegas,” he said. “It has not changed.”
While Bussmann acknowledged that Culinary “is a political force to be reckoned with,” he questioned whether it is more powerful than it was in years past. The fact that its event-deadline strategy didn’t work this time around is notable. Another example could be the recent presidential election. Unions almost always back Democratic candidates and urge membership to do so as well.
This year, Culinary worked closely with the Harris-Walz campaign in Nevada, which is typically a hard-fought swing state. According to the secretary of state’s office, Harris won Clark County by a 50%-47% margin. That was a loss of 3 percentage points from 2020, when Joe Biden won the county by a 53%-44% margin. The state as a whole ultimately flipped in support of Republican candidate Donald Trump.
Schuetz, however, was not swayed by these outcomes.
“The unions are unquestionably more powerful than before,” he contended. “Plus, the unions have become so powerful politically. The have a powerful, and I mean powerful get out to vote program. They are smart, well-funded, and believe in the cause.”