Tip-pooling bill goes too far, gets pulled back to limit pain

By Liz Benston (contact)

Tuesday, April 3, 2007 | 7:12 a.m.

A bill that would have ended - perhaps inadvertently - the long-honored practice of casino-supervised tip-pooling by dealers has been rewritten to simply address a controversy at Wynn Las Vegas, the bill's sponsor said Monday.

The new draft should bring a sigh of relief to dealers everywhere - and their bosses, and even the Internal Revenue Service - because it no longer jeopardizes the overall practice of pooling tips.

At issue is Wynn Las Vegas' decision last year that dealers share their tips with their immediate supervisors, on the grounds that even front-line bosses contribute to customer service and deserve some of gamblers' tips.

The rank-and-file dealers objected and persuaded Assemblyman Bob Beers, R-Henderson, to draft a bill that would keep supervisors' paws off their tokes.

But Beers' draft went too far, casino executives quietly complained, by proposing a ban on employer-run tip pooling altogether. Even though dealers might not want casino bosses telling them whom to include in the tip pool, they nonetheless depend on the casino's payroll department to make the system work fairly and efficiently.

So casino executives were miffed by Beers' draft and by dealers' apparent support of it. (During committee debate on the bill last week, the industry was silent - partly to not alienate employees who supported the bill.)

If employers were no longer overseeing the tip pools, which would have been the effect of Beers' first draft, the practice might collapse and lead to a return to old Vegas - when workers would jockey and lean on their bosses for the best jobs and best shifts, to pocket the most tips.

Because of that disparity in tip jobs, workers agreed years ago that tip-pooling was the answer. Casino bosses imposed tip-pooling to juggle work schedules and fill jobs more easily without complaints about tip-lousy shifts.

Even the IRS was comforted by tip pooling arrangements, because casinos could better track tip income for reporting purposes.

And so eyebrows raised last week when lawyers and others gave a close reading to Beers' initial bill, Assembly Bill 357. Who knew that, based on complaints from dealers at Wynn Las Vegas, someone would write a bill that could effectively wipe out tip pooling ?

On Monday Beers said he got the message.

"There were unintended consequences, which is why I've amended it," Beers said of his bill, which is being heard by the Assembly Judiciary Committee.

He said he was sponsoring the bill - which he said was written with the help of the state's legislative counsel - to end the kind of tip-pooling Wynn was allowing with supervisors.

Wynn executives said sharing the tips with the supervisors, called team leaders, also would help lure dealers into management ranks, now that those supervisors would be making more money than their direct reports.

But Beers is unsympathetic to that logic.

"When a property is earning a million per week, they can afford to give someone a raise if they deserve it. They don't have to take from the dealers' tip pool," he said.

Although companies such as MGM Mirage say they don't envision following Wynn's lead, Steve Johnson, a tax attorney and professor at UNLV's Boyd School of Law, said he suspects even the rewritten measure will die a quiet death.

"It's a question of flexibility," he said. "Even if (casinos) right now don't have the desire to (give dealer supervisors tips) they want to keep their options open. With this bill, that option is gone."

It's now unclear, because the new draft has not been debated, how the industry will weigh in on a bill that, for now, would affect just one Strip casino.