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Final MGM Layoff Wave Tops Recent Gaming Industry Headlines

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Associated Press

This year continues to be a wild and eventful year for the gaming industry.

MGM Resorts just completed its final round of layoffs last week in accordance with its MGM 2020 plan.

Howard Stutz, the executive editor for CDC Gaming Reports, said most of those layoffs were among middle management jobs as a way to centralize the decision making in the company.

"It's a way to try to increase cash flow. They're trying to lower their costs. They've got a debt of about almost $15 billion that they are sitting on that they're trying to leverage that some ways," he said, "So it's a lot of different measures."

He said the company is trying to increase cash flow by $300 million over the next couple of years.

MGM Resorts is also heavily focused on its plan to open a resort in Japan. They're hoping it will be second only to Macau in gaming revenue. The company doesn't have the same presence in Macau as Wynn Resorts and the Las Vegas Sands, which is why Japan could be so important.

Gaming revenue is down for the fourth month in a row, especially on the Strip.

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While that might sound alarming, Stutz pointed out that in Las Vegas, 65 percent of what a resort makes is from non-gaming revenue like nightclubs, shopping and restaurants.

"Different CEOs have said [that] one dollar in revenue is one dollar in revenue," he said, "They don't care if it comes from a slot machine or a restaurant. It is still one dollar in revenue." 

While gaming has expanded to almost every state in the union, people still like to come to Las Vegas for the Vegas experience. 

While visitor volume stays steady, there are concerns the sexual harassment scandal that rocked the industry more than a year ago has not produced the kind of changes people were seeking. 

The Nevada Gaming Commission has yet to approve new harassment regulations for the casino industry, even after fining Wynn Resorts a record-breaking $20 million in February.

Stutz said the commission has not moved forward with the ideas because it is not finished investigating some of the other people named in the complaint against Steve Wynn.

"The board has not said if they have closed the door on Steve Wynn or any other former or current company employees that were involved in the 10-count complaint that was filed," he said.

In addition, there are some in the casino industry who believe sufficient federal labor laws are already in place to cover sexual harassment and discrimination in the workplace

 

Guests

Howard Stutz, executive editor, CDC Gaming Reports

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