Illinois Smoking Ban Has Not Damaged Casino Revenue, Study Claims

Posted on: January 30, 2018, 06:00h. 

Last updated on: January 30, 2018, 04:22h.

The Illinois smoking ban was one of the first in the US to make commercial casinos completely smoke-free, but it hasn’t impacted their footfall or gambling revenues, according to a new study by the Bureau of Economic Research.

Illinois smoking ban no affect on casino industry revenues
Illinois’ smoking ban kicked in a month before the Great Recession hit the casino industry, making it difficult to quantify its impact on revenues, but the study believes it has done so and there weren’t any. (Image: Ben Fogletto)

But operators of the state’s riverboat casinos, which comprise its commercial casino sector, beg to differ. They believe revenues are not what they would have been had visitors been left to puff away to their heart’s content without fear of prosecution.

Part of the problem is that the Smoke-Free Illinois Act, which banned smoking in casinos and within 15 feet of their entrances, came into force one month before the Great Recession kicked in, in 2008.

Casino operators – or at least the sane ones – don’t blame the smoking ban for the worst recession in recent memory, but they may reflect that the sudden extreme economic circumstances that followed make it difficult for researchers to quantify its effects on their revenue streams.

Smoke and Mirrors?

The new study analysed casino footfall and revenues for 10 years before and eight years after the Illinois smoking ban came into force and compared them with numbers for the surrounding states of Iowa, Indiana and Missouri, making per capita adjustments based on the states’ overall populations.

Researchers also analyzed other factors, such as the recession and the new proliferation of video game gambling in the state.

Estimates from our study clearly indicated that the Illinois law that banned smoking in casinos has had no significant negative economic consequences for casinos in terms of per-capita admissions or revenues,” said Dr John Tauras of the National Bureau of Economic Research and the University of Illinois.

Tauras believes that the study might help tribal casino operators reconsider the smoking policies at their casinos nationwide, 75 percent of which have no anti-smoking policy.

 $400 Million Up in Smoke

But in an interview with Reuters this week, executive director of the Illinois Casino Gambling Association Tom Swoik pointed to a study from 2009 which concluded the Illinois smoking ban was responsible for a 20 percent drop in revenues in 2008 alone, which translates to $400 million hole and a loss of over $200 million for the state’s tax coffers.

“We do know from other studies that the more time someone spends on the casino floor, they more likely they are to keep playing,” Swoik said. “If they have to go outside to smoke, they’re more likely to light up and then leave.

“We know that secondhand smoke is not beneficial to your health, and at the same time, having a facility where people can smoke at a casino is beneficial for revenue,” he added. “It can be hard to weigh the negative health effects versus the economic numbers.”