Wynn Resorts CEO says company is paying employees to retain them despite coronavirus closures

Key Points
  • Wynn Resorts is offering payroll coverage to employees for 30 days while its casinos remain closed.
  • Nearly 650,000 casino employees are out of work, according to the American Gaming Association.
  • All U.S. commercial casinos will be closed as of Wednesday.
Watch CNBC's exclusive interview with the Wynn CEO on the coronavirus
Watch CNBC's exclusive interview with the Wynn CEO on the coronavirus

These are idle times for nearly 650,000 gaming workers in the U.S. as the remainder of the commercial casinos in the country are expected to close by Wednesday. 

Many employees have been laid off. Some have been promised a couple of weeks pay.  But it's becoming clear the coronavirus crisis will last beyond that. 

Wynn Resorts CEO Matt Maddox was the first to close casino doors in Las Vegas, even before Nevada's governor ordered them shut for 30 days. Maddox told CNBC in an interview he learned a lesson from the financial crisis in 2008: It pays off in the long run to retain employees, even if it costs the company in the short run.

"I can't imagine going out (to) rehire and retrain 13,000 people. I'd rather keep the knowledge and experience that we have now in the service standards," he said.

In February, the government of Macao ordered all gaming facilities to suspend casino operations for 15 days and ordered the casinos to continue paying employees. In an earnings call, Maddox revealed Wynn Resorts was spending as much as $2.6 million every day during the Macao shutdown, most of it on salaries.

An exterior view shows Encore Las Vegas (L) and Wynn Las Vegas as the coronavirus continues to spread across the United States on March 15, 2020 in Las Vegas, Nevada.
Ethan Miller | Getty Images

In Nevada, it's the Wild West when it comes to support for tens of thousands of hourly workers. Las Vegas Sands the owner of The Venetian and the Palazzo, has said it will pay its workers without putting a time limit on how long. MGM Resorts said it will pay its furloughed workers for two weeks, but it has already laid off many. Caesars Entertainment also said it has had to furlough workers since its properties were ordered shut.

Maddox points out the loyalty a move like continuing to pay workers engenders in employees. "We're known as the best place in Las Vegas for service, for experience, " he says.  "I want our employees to be happy to be there, because if they're happy, you'll be happy and our shareholders will, too."

Although Wynn Resorts has committed to paying its employees, including tipped and hourly workers, that commitment is for 30 days. "We have a runway, but every day we're thinking about where we can save money," Maddox said.

Maddox has asked directors and executives to swap salary for stock to preserve cash as he has done himself. And he's lobbying representatives in Congress for aid in the form of loans. "We should be able to borrow money to pay salaries and wages of our line-level staff and healthcare benefits. And then, once we're reopened and out of this, we should pay it back."

And if there's a glimmer of hope, Maddox points to the "Get Back to Work" message in China. Nearly all employees are back on the job at Wynn's properties in Macao. 

Even though ferries aren't running, tourist visas are not yet being issued and visitation is ten percent of what it was previously, Maddox says there's an emotional shift: "Sure, the economy's fallen on tough times, but there's a sense of optimism that they've made it through."