Wynn Casino-Hotels has a controversial tip sharing policy. Card dealers must share their tips with their supervisors. At least one court has found that the practice is unfair. The more interesting aspect of this practice is that it would tend to blunt the incentive of dealers to generate income from tips. Why would management not want employees to have strong incentives to serve guests?
Perhaps it is because they are serving guests at the expense of the house. Normally gamblers who do well at the tables will tip their dealer after a particularly successful hand. Not all gamblers are equally proficient at gambling and will occasionally start to make mistakes in betting, taking cards when they shouldn't, etc. Dealers are proficient and can send subtle signals to gamblers to steer them away from these errors. The gambler is grateful and will often reward the dealer. But for this hand-by-hand intercession, the house's take would have been greater. So, the dealers have incentives to side with the gambler against the house. Tip sharing blunts this incentive. Perhaps, Wynn can only attract dealers of lesser abilities, but since these dealers are more likely to work for the house, they may generate more profits.
Hat tip: Roger Meiners
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