When we think of people who own casinos, we think of the larger-than-life figures – your Benny Binions, Howard Hughes or Kirk Kerkorians of the world. And there are stockholder-owned casinos: Wynn, Sands and MGM for instance. One casino in Nevada is doing things differently.
The Eureka Casino Resort in Mesquite — 214 rooms — is one of only two casinos in the country owned by employees. And Fortune magazinerecently named it one of the country’s best medium-sized places to work.
“I think it really happened over the course of many years,” CEO Gregory Lee said of the move to employee ownership. Lee and his parents opened the Eureka Casino in 1997 and they saw eight years of strong growth. When the global financial crisis hit, Lee started to look for a different way to structure the company.
He saw company towns across the country losing the industries that had kept them alive for decades. “The idea of becoming employee-owned really brought together an opportunity to do things differently,” he said. For Lee, the structure of the company is really a reflection of the family business that he has been a part of his whole life. “The notion of family business was more than immediate family,” he said, “It included the incredible team of management that we had put together and it included employees who were with us really from the first days that we opened and having them be stakeholders in the business more than just a job was something that was attractive to me.”
While it is described as ‘employee-owned,’ president and chief operating officer Andre Carrier said it is structured differently than people may think. “Is for all intents and purposes a long-term retirement benefit that you never contribute to,” he said.
Unlike a 401k that employees contribute to through their career, an Employee Stock Ownership Plan or ESOP grants shares over the course of a person’s career. The employees and management are motivated to make sure the company continues to do well over time so that their shares pay off. “It is kind of surprising that it is uncustomary in a country where so few people are prepared for retirement,” Carrier said.
While a management team still runs the company, the employees do have a say in how things are run. Carrier is the employee trustee and he is responsible for voting their shares. “In this case, the ESOP is like a family business that has a lot of family members,” Lee said. And like in a family business or a stakeholder held company for that matter, not every family member or stakeholder will vote on every issue but there is a level of trust that needs to be established.
Carrier said they talk informally and formally with employees continually. “If there was something on their minds that they were that passionate about I think we would know before the mutiny,” he said. He said there is an expectation that if employees are unhappy they need to say something but at the same time, the employees expect that problem to be properly managed.
Carrier believes the system he and Lee have set up at the Eureka could go far beyond the casino walls and to help address issues the American workforce has right now.“Perhaps, it’s a better way,” he said. Carrier believes it could be a better path to help wage growth, financial independence, job security and retirement benefits.