MGM Springfield Settles for $6.8M in Wage and Tip Violations
MGM Springfield, one of three Massachusetts casino venues, has recently settled for $6.8 million with the Massachusetts Attorney General’s office over a wages and tipping violations case.
The settlement, announced on Wednesday by state AG Andrea Campbell, is the culmination of a multi-year investigation that revealed a series of employee compensation and benefits violations.
MGM Springfield, operated by MGM Resorts International, faced accusations of infringing various labor rights rules. That included failing to pay the minimum wage to tipped employees, not paying overtime wages, unlawful tip retention, and delays in wage payments. The Attorney General’s Office embarked on this investigation after receiving numerous complaints from employees who believed employee rights laws were being violated.
Now, the investigation — which was initiated based on complaints first made in 2018 — has concluded, and MGM Springfield has consented to pay the $6.8 million settlement. Some of that will go to compensating workers, and some on administrative costs for the AG’s office.
Additionally, they agreed to implement a compliance program and undergo third-party audits to ensure such violations do not recur.
Failure to Provide for Employees
Specific complaints from employees highlighted issues such as managers participating in staff tip-pooling, unpaid overtime rates, and security personnel being compelled to work without breaks. These grievances spanned 2,036 service rate employees in various roles at the property, including table game dealers, waiting staff, kitchen staff, and casino floor staff.
“MGM Springfield’s failure to provide its employees, especially service workers earning an hourly wage and relying on tips, with their full wages and benefits made it more difficult for these employees to take care of themselves and their families,” Campbell said.
“My office will continue to hold accountable those who violate our wage and hour laws.”
MGM Resorts International says it is committed to addressing the issues and the failings that allowed them to occur.
“We take our compliance obligations seriously, and have made proactive updates since 2019 to address this issue,” said MGM Resorts director of regional corporate communications Dara Cohen, speaking to local outlet the Boston Herald.
“We will continue to invest in training and regular reviews of our policies and procedures to ensure ongoing compliance.”
Background on MGM Springfield
MGM Springfield is a multimillion operation, with this new fine equivalent to about a month’s worth of taxes for the casino. Alongside other establishments like Encore Boston Harbor and Plainridge Park Casino, it contributed to a combined August 2023 revenue of $98 million.
Out of this, MGM Springfield’s share was $23.5 million, from which it paid $5.8 million in casino gaming taxes to the state.
MGM also competes among Massachusetts retail sportsbooks, with its BetMGM venue inside the casino. Interestingly, its sports betting operation had the lowest handle in the state in September, at $1.5 million.
However, during the start of football betting season, it had the best hold rate of the three operators. The BetMGM ‘book turned the lowest handle into the highest revenues at $285 thousand for the month.
Related: The best online casinos in Massachusetts, rated and reviewed
Recent Cybersecurity Concerns
It’s worth noting that this settlement comes on the heels of another significant outlay for MGM Resorts International.
MGM Springfield was among the operator’s casinos affected by a massive cyberattack in September. That ended up disrupting MGM’s giant Nevada casino venues in Las Vegas for more than a week. It cost the operator more than $100 million, as it grappled with the consequences of its admirable decision not to pay a ransom to cyber attackers.
Rival Las Vegas-based Caesars Entertainment was also the victim of a hack. But it paid a multimillion ransom to avoid disruption.
The news of this not-insignificant fine for one of MGM’s flagship resorts adds to a stressful period for the largest U.S. gambling operator heading into the final months of 2023.