• Thousands of casino workers in Detroit have gone on strike.
• They are seeking higher wages and better working conditions.
• The cost of living has surged since the last labor contract, signed in 2020.

Auto workers aren't the only ones on strike in Detroit. Thousands of casino workers, seeking higher wages and better working conditions, walked off the job in the city Tuesday. Casino workers are seeking higher wages and better working conditions as the cost of living has increased in recent years.

The work stoppage targets operations at the MGM Grand Detroit, owned by MGM Resorts International; MotorCity Casino; and Hollywood Casino at Greektown, owned by Penn Entertainment.

Striking employees include 3,700 workers employed in positions across the properties, including dealers, cleaning staff, food and beverage workers, valets, engineers and more. They are represented by the Detroit Casino Council, which is made up of five unions including the United Auto Workers.

The effect was immediately clear. MotorCity Casino updated its website showing that high-limit table games and poker rooms as well as casino valet were closed, in addition to its spa and some restaurants and bars.

FanDuel, which operates the FD Sportsbook in conjunction with MotorCity, told CNBC it will be closed with the exception of a non-union MCC employee managing the cash at the counter for patrons needing to cash in tickets, which keeps with Michigan regulatory requirements.

The Hollywood Casino at Greektown said in a statement to CNBC, "We are disappointed by the decision of the Detroit Casino Council as we have made generous, progressive settlement offers that position our team members and business for sustainable success." The management says it will remain open for business.

Matt Buckley, president and COO of MGM's Midwest Group, sent a letter to employees of MGM Grand Detroit that made clear the company also intends to keep the property open and running.

"Regarding the status of our negotiations, we've made six proposals to the union and our current offer includes the single largest pay increase in the history of MGM Grand Detroit. It is a significant proposal," he wrote.

The Detroit Casino Council argues casino workers agreed to a three-year contract during the pressure-packed earlier days of the Covid-19 pandemic. The deal, which has now expired, included 3% wage increases even as the cost of living has surged 20% amid high inflation, according to the union.

"In contrast, industry gaming revenues have now surpassed pre-pandemic levels to reach a new record high," the Detroit Casino Council wrote in a news release. "In 2022, the Detroit casino industry generated $2.27 billion in gaming revenue and is on track for another record-breaking year in 2023. The three Detroit casinos collectively reported $813 million more in total gaming revenues in 2022 than in 2019, but total wages paid to workers represented by the DCC were $34 million less when comparing those same years."

But brick-and-mortar casinos saw revenues of $1.2 billion in 2022, about a $200 million decline from 2019, before the Covid-19 pandemic.

The Detroit Casino Council revenue numbers include iGaming and online sports revenues. They are required by Michigan gaming regulators to partner with land-based casinos to get a license to operate.

The Detroit Casino Council estimates each day of a strike could put approximately $738,000 in city and state tax revenues and $3.4 million in casino operator revenues at risk.

MGM Resorts, Caesars Entertainment and Wynn Resorts are also facing possible walkouts in Las Vegas. Nearly 40,000 members of the Culinary Union have authorized a strike, though it hasn't yet been called. Negotiations are ongoing.

MGM CEO Bill Hornbuckle told CNBC during a keynote presentation at the Global Gaming Expo last week that he and top leadership from the other casinos are involved in intense negotiations. But he said the unions in Las Vegas are influenced by other attention-grabbing strikes.

"It doesn't help when UAW in Detroit is asking for 40%. I mean, that's a top line that's hard to ignore," Hornbuckle said at the time. "That being said, I think what matters here locally is people's ability, particularly on the front line to exist, to pay rent and to get to the next step in life. And so I think that's what's relevant."

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