Devynn Dewey starts every night in the hole. The dancer at Rick’s Cabaret and Diamond Cabaret must pay the Denver clubs as much as $140 just for the opportunity to work. Then there’s a mysterious $8 “promo fee.” Every lap dance takes another $5 out of her pocket. Tips on private suites? Anot her 25% to the manager. And, at the end of the night, she hands out more cash to the DJ and bouncers. “We’ve been historically ignored,” Dewey said in an interview. “Because of that, they’re able to retaliate or push us into silence. The backlash isn’t worth speaking up.” Interviews with eight dancers who’ve worked at metro Denver strip clubs show wage theft is baked into the business model — $5 here, $10 there — to the point where dancers sometimes go home with less money than they had at the beginning of the night. Dancers told The Denver Post they feel pressured to illegally share tips with managers for fear of retaliation or termination. Meanwhile, unexplained fees continue to escalate. The Post’s reporting mirrors findings from Denver Labor, a division of the city auditor’s office, which last month ordered Diamond Cabaret and Rick’s Cabaret to pay nearly $14 million in fines and restitution over what it called a yearslong campaign to steal wages from employees. All of this is standard practice among strip clubs owned by RCI Hospitality Holdings, which owns the two clubs and three other Denver adult venues, according to the entertainers interviewed by The Post and Denver Labor’s findings. RCI has faced lawsuits in at least three states, with dancers accusing the strip club owners of misclassifying them as independent contractors, failing to pay minimum wage and siphoning away tips to other employees. After one New York lawsuit, the company mandated all dancers at its clubs sign arbitration agreements that block them from filing lawsuits or class-action claims. These agreements, experts said, make it nearly impossible for an especially vulnerable workforce to adequately fight for their rights. “For strip clubs, the business model is based on not following the law,” said David Seligman, executive director of Towards Justice, an organization that has represented dancers in litigation. “It’s based on evading the law and hiding behind arbitration clauses.” Attorneys representing RCI and its strip clubs declined interviews for this story, referring The Post to previous statements. In a lawsuit filed against Denver labor officials this month, the clubs vehemently denied stealing wages and maintained their workers should not be classified as employees entitled to the city’s minimum wage. “The entertainers at these establishments are entrepreneurs — masters of their own schedules, their own careers, their own freedom,” RCI said in a statement last month. “Yet Denver Labor seeks to ‘rescue’ them from a reality that needs no rescuing, manufacturing a problem where none exists and violating constitutional rights in the process.” The exterior of Diamond Cabaret at 1222 Glenarm Place in Denver on March 11, 2025. (Photo by Helen H. Richardson/The Denver Post) Exclusively working for tips Denver strip clubs have been in the spotlight since the city’s labor division last month announced the results of its multi-year investigation that found Diamond Cabaret and Rick’s Cabaret engaged in widespread wage theft involving hundreds of workers. The unprecedented investigation found the adult venues “violated nearly every applicable provision” of Denver’s minimum-wage laws, including misclassifying entertainers as exempt from city ordinances; failing to pay staff the city’s minimum wage; and stealing money from entertainers by requiring them to pay fees for the privilege of working. Denver Labor’s director acknowledged the $14 million in restitution and penalties “appears to just be the tip of the iceberg.” The strip clubs’ lawsuit in response to the findings alleges the city’s labor officials exhibited a “reckless abuse of power” that violated the constitutional rights of the two businesses. Most dancers in Colorado are classified as independent contractors — meaning they are not entitled to a minimum wage, paid sick leave, health benefits, vacation or workers’ compensation. In fact, dancers at many of these adult venues make no hourly wage at all, exclusively working for tips, Denver Labor found. They start, though, every night in the red. There’s the house fee that every dancer must pay in order to work — a number that fluctuates depending on the club, day and time of the shift. Contracts for three Denver-area strip clubs — including one not owned by RCI — reviewed by The Post show these fees range from $20 for an early weekday shift to $140 for a prime 11 p.m. weekend slot. Some clubs charge workers to park in their lots — with an additional $5 or $10 tip customary for the valet. Once inside, dancers might pay the club $5 per song for a lap dance. If they are with a client and miss their scheduled time onstage, they owe another fee. At Diamond and Rick’s, management also takes a cut of all tips on suite purchases — sometimes taking home more than the dancers, these women said. RCI, in a statement earlier this month, said Diamond and Rick’s followed all local, state and federal laws related to independent contractors and hospitality employees, “all of whom have properly received the full amount of their different forms of remuneration.” At the end of the night, dancers said they also often feel compelled to tip the DJ, bouncers and house mom — someone who serves as an informal dressing room manager. Christine Grace, a former dancer at Shotgun Willie’s, a club in Glendale, said she usually tipped 25% of her earnings for the night to the various people who make the club run. (Management of Shotgun Willie’s could not be reached for comment Friday.) Denver Labor outlined the financials for one worker in the city’s investigative findings last month. The dancer, whom the division only identified by her initials, worked 98 times in 2024, paying more than $7,000 in fees to the Diamond Cabaret across her 461 hours. She made $0 in hourly wages, though she did take home tips. Multiple dancers told The Post there are nights when they paid out more money in fees, fines and tips than they made giving dances. “You have this feeling that it’s (expletive) up we have to pay to work, especially knowing how much they are profiting off of us,” said one Rick’s Cabaret dancer, who spoke on the condition of anonymity because she still works at the club. “For me, it was just accepted. If you wanted this work, this is what you had to do.” When Rebecca Dolana worked at PT’s Showclub in Denver, tipping was depicted as voluntary. But other clubs required her to tip a certain percentage to other workers like the DJ and the bouncers, she said. “There were certain bouncers that were more aggressive than others about getting their tip-out,” she added. When she performed a private dance, Dolana charged $30 for a day shift dance and $50 for a night shift dance. She said management counted how many times she frequented the private dance area and how many songs she danced. Managers instructed dancers on the minimum they could charge for a dance, so they knew what to expect for tip-out, Dolana said. “They’d be like, ‘Well, I know you did at least 20 dances today, so I should be expecting at least this amount from you,’ ” Dolana said. “If you fight them on that at all — they say it’s not mandatory, but you really won’t be welcomed back.” A poster is seen through a window at Rick’s Cabaret at 1443 Stout St. in Denver on March 11, 2025. (Photo by Helen H. Richardson/The Denver Post) “It’s not legal” Dancers told The Post that everything changed when RCI took over the clubs in 2021. The Houston-based company that year purchased 11 strip clubs — including Denver clubs Diamond Cabaret, Rick’s Cabaret, PT’s Showclub, PT’s Centerfold and Scarlett’s Cabaret — for $88 million. In the first quarter of 2025, RCI reported $71.5 million in total revenues. Under the previous owner, VCG, workers said they sat through classes in which management taught them about local wage theft and minimum wage laws. Some of those managers continued on through new ownership. Quickly, dancers said, they noticed drastic changes. During an initial meeting with the new brass, one worker noted that the Diamond Cabaret didn’t have a way to clock out for breaks, according to another dancer who spoke on the condition of anonymity to protect her employment. “You’re here to work,” one manager replied, according to the dancer in the room, “not take breaks.” RCI immediately instituted a policy in which managers would receive 25% of tips on every purchase of “Dance Dollars” — the internal currency used at the company’s clubs. Denver law forbids managers from receiving a portion of tips paid by customers. Several supervisors quit when they learned of the tip split, dancers told The Post. Two other managers were fired while they were pregnant, two workers said. “Before RCI bought out the clubs, we never tipped managers,” Dewey said. “It’s not legal.” Dancers said they knew there would be repercussions if they didn’t tip-out supervisors. “It creates a really uncomfortable, conflicting environment,” Dewey said. “Then there’s favoritism; if you’re not tipping, you’re not gonna be treated well. You feel pressure to give these tips.” Attorneys for the adult venues, in their lawsuit against the city, vehemently pushed back on the allegation that managers stole tips from entertainers and employees. Rather than taking tips meant for other workers, these managers are directly interacting with clients, handling transactions and providing an option for clients to tip them as VIP hosts, the clubs said. Then they “voluntarily share” a portion of the tips with the rest of the staff. Workers told The Post they had never heard the term “VIP hosts” and that managers simply process the transactions. House fees increased. RCI then added a “promo fee” of $8 per worker per night that the dancers couldn’t explain. Both are illegal in Denver and cited in the audit. The new ownership also rapidly increased the number of adult entertainers working on any particular night, workers said, collecting house and promo fees for each. This has led to more cutthroat competition among workers vying for clients and lower take-home pay. In addition, workers said new management instilled a culture of fear. In December, the Diamond Cabaret fired three workers who had provided information to Denver Labor for their investigation, according to the auditor’s determination letters. The city deemed these firings “questionable, suspect and retaliatory acts.” The club also instituted a new policy banning workers from taking photos or videos in the club — a direct shot at the people who had submitted evidence to investigators. “In the face of mounting investigations and significant liability, the Diamond chose to circle the wagons, fire any employees who might speak to the government, and commit further violations of law,” Denver Labor officials wrote. Bernadette Barton, professor of sociology and director of gender studies at Morehead State University in Kentucky, referred to wage theft at strip clubs as “a big institutional problem” — and an issue that extends far beyond Denver. “This has been going on for decades,” Barton said. “This is nothing new.” Myriad factors contribute to the longstanding challenge. Dancers are “almost exclusively” classified as independent contractors by their employers, Barton said. Dancers are often transient and temporary workers, she said, and they can be young and inexperienced. Because they face social stigma about their jobs, Barton said they’re deterred from organizing unions to represent them collectively. As a result, dancers are often forced to pay for missed shifts and shift fees, along with tip-outs and fines for infractions, Barton said. Sometimes, they also need to shell out a percentage of their lap-dance earnings. So “if conditions are bad at a club, it’s easier just to quit that club and go to a different club,” she said. The recent action by Denver’s auditor struck Barton as “somewhat uncommon.” However, it remains to be seen whether it will make a meaningful impact on the industry nationwide. “The clubs have a lot more resources than the dancers, so whatever happens, the clubs will probably find a way to take it out on the dancers,” she  said. The exterior of Diamond Cabaret at 1222 Glenarm Place in Denver on March 11, 2025. (Photo by Helen H. Richardson/The Denver Post) Lawsuits challenge RCI’s business model These features appear to be RCI’s business model — one that has faced a series of legal challenges in other states. In 2009, a trio of dancers in New York sued the company for refusing to pay a minimum wage, unlawfully demanding wages from employees, illegally deducting wages through fines and penalties, and misclassifying workers as independent contractors. A judge found the women were employees and therefore entitled to be paid a minimum wage. The parties agreed to a $6.8 million settlement. In 2016, a pair of dancers in Florida filed a similar lawsuit, accusing RCI of siphoning tips from entertainers to pay ineligible workers. The parties settled out of court. Two years later, dancers in Philadelphia alleged the company did not pay wages or overtime and charged dancers to work. That lawsuit is ongoing. A notable feature in that case: RCI mandated dancers sign arbitration agreements that prohibit workers from bringing claims in court, including class-action complaints. The company includes these provisions in its Colorado contracts. The strip club industry, and RCI, hardly stand alone. Over the past 25 years, corporations have increasingly relied on arbitration agreements to prevent workers from joining together to bring collective lawsuits. The Economic Policy Institute, a Washington, D.C., think tank, called arbitration agreements an “epidemic”, depriving workers and consumers of their rights. As one judge opined, these agreements give corporations a “get out of jail free” card for all potential transgressions. The American Civil Liberties Union in 2019 called on Congress to end forced arbitration in employment discrimination and consumer contract cases. Related Articles Colorado News | Denver’s investigation of wage theft at strip clubs was a “reckless abuse of power,” lawsuit alleges Colorado News | Two Denver strip clubs must pay nearly $14 million in back pay and penalties to workers, auditor rules Colorado News | Strip clubs sue to stop Denver’s first wage theft subpoenas Colorado News | Denver subpoenas 3 strip clubs in first use of new tool to investigate wage theft Colorado News | Denver keeps strip clubs, dancers in check with undercover prostitution stings — but punishment is rare “Forced arbitration has had the effect of slamming the courthouse doors in the face of victims of workplace harassment and discrimination, and is a huge boon to employers,” the civil rights organization said. Arbitration is much more expensive, often confidential and does not include the same rules of discovery as a court, said Seligman, the Towards Justice executive director. On average, employees and consumers win less often and receive much lower damages in arbitration than in court, the Economic Policy Institute found. “Strip clubs use these agreements to allow them to maintain this model of persistent lawlessness,” Seligman said. These agreements make it all the more necessary for government bodies to enforce existing law, since that is not bound by arbitration clauses, he said. Dewey said she hopes the Denver Labor investigation opened the public’s eyes to how these clubs exploit her and her colleagues. “A lot of entertainers feel they have to live in the shadows of society,” she said. “This is a really important moment for us.” Get more Colorado news by signing up for our daily Your Morning Dozen email newsletter. ...read more read less