South Point Furloughs Employees Indefinitely, Owner Michael Gaughan Says Workers Better Off

Posted on: April 21, 2020, 08:53h. 

Last updated on: April 21, 2020, 10:48h.

Devin O'Connor @CasinoorgDevinO Read More
Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.

South Point Hotel, Casino & Spa in Las Vegas is furloughing its 2,200 workers effective May 3, owner Michael Gaughan saying the decision is in their best interests. The casino is one of the few non-union properties in Las Vegas.

South Point Las Vegas casino
South Point workers have been home for nearly a month, and now they won’t be paid by the casino resort. (Image: Elizabeth Page Brumley/Las Vegas Review-Journal)

In a letter to employees, Gaughan explains the furloughs are indefinite. With no concrete timetable as to when the property located south of the Strip on Las Vegas Boulevard might reopen, he claims the decision makes the most financial sense for workers.

“As a result of the ongoing impact of the COVID-19 pandemic and the resort closure mandate through April 30, 2020 by Governor Sisolak, we have had to make a very difficult decision to furlough most of our employees for an indefinite period beginning on May 3, 2020,” a statement explained.

In a letter to employees, Gaughan added, “By being furloughed, you will be better off. You will receive more money from both the state and federal government than what you are currently receiving from South Point.”

South Point plans to rehire its workforce once possible, though Gaughan admitted to his staff that it “may take several months to get back to full employment due to the lack of business.”

Employee Benefits

Gaughan sold his stake in Boyd Gaming in 2006 to fully acquire the property then known as South Coast. It was renamed South Point in the fall of that year.

As the COVID-19 virus spread into Southern Nevada, South Point remained open until it was forced to shutter by Gov. Steve Sisolak’s (D) order in mid-March. Gaughan has continued to pay workers during the closure, and following the furloughs, he will extend health benefits through July 31, and cover health payroll insurance deductions during that time as well.

While South Point is trying to paint the situation in the best available light, the fact that the Nevada unemployment website remains overwhelmed and many Nevadans are reporting lengthy delays in receiving any form of compensation – both state or federal coronavirus aid – Gaughan conceded to workers that the unemployment process “can be difficult.”

In January 2018, Gaughan announced he was doubling all full-time workers’ annual bonuses. The average employee received nearly $500 in additional funds, with senior level and management collecting between $700 and $2,300 each.

The bonuses were a result of President Donald Trump’s tax reform package approved by Congress at the end of 2017. “We had a big year and I’m going to save some money with The Donald,” Gaughan said at the time. “I got a little bit of a tax break. It’s about a million dollars.”

Great Unknown

No state relies more on tourism than Nevada. MGM Resorts, Caesars Entertainment, and Las Vegas Sands are respectively the state’s top three employers.

Casinos will remain closed through at least the end of the month. But the odds are heavily in favor of a delay past that date. Sisolak says he’s putting “Nevadans ahead of dollars,” but patience among business leaders and casino executives – and especially Las Vegas Mayor Carolyn Goodman (D) – is wearing thin.

Wynn Resorts CEO Matt Maddox is calling on Sisolak to allow casinos to reopen under a series of health safety conditions next month.