Report: Smoking bans no longer threaten casino revenue

ATLANTIC CITY, NJ (AP) — For decades, the casino industry accepted the wisdom that eliminating smoking would automatically result in reduced revenue and lost customers.

But a new report investigate how the coronavirus pandemic has changed players’ habits, says that may not be the case anymore.

The report, issued Friday by Las Vegas-based C3 Gaming, comes as several states, including New Jersey, Rhode Island and Pennsylvania, are considering banning smoking in casinos. The research firm says its report was independently produced and not funded by an outside party.

It notes that the pandemic has altered several key aspects of the casino experience, including the scrapping of daily housekeeping in many places, the closure of buffets and the end of room service – which customers have become accustomed to. It suggests that smoking will be the next such change to be accepted.

“The pandemic has transformed consumer expectations and behavior across virtually every industry, including retail, entertainment, lodging, hospitality and casino gaming. One of these changes is attitudes towards smoking in casinos,” the report’s three authors wrote.

“Data from multiple jurisdictions clearly shows that the smoking ban is no longer leading to a dramatic drop in gaming revenue,” it says. “In fact, non-smoking accommodations appear to be doing better than their counterparts, where smoking is still allowed.”

The report examines casino performance in numerous states since the outbreak of the coronavirus pandemic in early 2020 and finds that “Casinos that implemented smoking bans did not experience a decline in revenue or lost market share to nearby casinos that continued to offer smoking environments. ”

The authors also surveyed tribal casino managers, who said profitability was starting to increase due to lower maintenance costs, adding that 157 tribes were able to quit smoking in their casinos “without any economic cost.”

The authors also predicted that smokers would not flock to Atlantic City casinos when New Jersey banned smoking there, and noted that due to smoking bans in Connecticut and New York and a smoke-free policy at Rivers Casino, Philadelphia players were shutting out New York, New York, Jersey and Eastern Pennsylvania would have only four options offering smoking.

The report is the latest in a back-and-forth over whether there is evidence that smoking can be eliminated without affecting casinos’ bottom line. It also aims for a report commissioned in February by New Jersey casinos, which predicted massive revenue and job losses if a smoking ban were implemented.

The stakes are high, especially in New Jersey, where the largest casino workers’ union is threatening to go on strike in July, if by then no new contracts are signed that bring large salary increases.

Players in the Northeast US polled by The Associated Press expressed strong support for smoke-free casinos.

“Smokers will say that if they ban smoking, they won’t gamble anymore,” said Linda Quinn of Montvale, New Jersey. “They said that when they went smoke-free in restaurants and bars and it didn’t affect them at all. I honestly don’t think it will have an impact, and smokers say that because they don’t want the law changed.”

Erik Lovequist of Billerica, Massachusetts, quit smoking 14 years ago and has not visited Twin River Casino in Rhode Island for a very long time “because the entire casino, including much of the non-smoking area, smelled like an ashtray. I enjoy having the completely smoke free Encore Casino half an hour away.”

John Bucek of Chester, New York, visits Atlantic City six times a year and quickly took to the fact that there was no smoking in casinos there for the first year and a half of the pandemic.

“Now that it’s back, it’s awful,” he said. “I never realized how bad it was. It often drives us out of there.”

However, some players who smoke said they would seek out casinos that would continue to allow them to do so.

The report finds sales declines that followed smoking cessation in Delaware, Colorado, Illinois, Deadwood, South Dakota and New Orleans. However, it was also noted that there were other economic factors that may have affected sales, including the opening of new competitors nearby. And it was said that these sales declines “tend to recover in the following years”.

The report found that gamblers in several markets did not flock to smoking casinos when others in the area banned smoking, citing examples from Pennsylvania, Indiana and elsewhere.

The authors acknowledged, “It is an irrefutable fact that a slot machine in a smoking area of ​​a casino makes more money than a slot machine in a non-smoking area.”

But they also found that casinos that offer smoking do not perform any better than those that allow it. It turned out that the Parx Casino in Philadelphia; Empire City in Yonkers, New York; Foxwoods and Mohegan Sun in Connecticut and Resorts World in the Queens borough of New York have higher slots win-per-day performance than Atlantic City over the past 12 months.

Las Vegas, the nation’s largest gambling market, remains a bastion of casino smoking; Only one resort, Park MGM, has a total smoking ban. In New Jersey, smoking is permitted on up to 25% of the casino floor.

Philadelphia’s Rivers Casino has been smoke-free since August 2021, when general manager Justin Moore decided it would be easier operationally to remain so rather than change policies to accommodate the city’s frequently changing pandemic regulations.

In April, the casino passed a policy that allowed its smoking customers to use a restaurant terrace to smoke, avoiding having to go through metal detectors twice when exiting and re-entering the casino.

Financial results were mixed, with some good months and some where revenue fell short of forecasts, Moore said, adding that inflation, labor shortages and new nearby competition make it difficult to attribute sales performance to a single factor.

The casino decided to remain smoke-free even after it could have resumed smoking, in part due to experience of operating during the pandemic.

“It was difficult to tell people, ‘We’re keeping you safe,’ and then allow them to blow particles into the air,” he said.

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Follow Wayne Parry on Twitter at https://twitter.com/WayneParryAC.

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