Smoke-Free Casino Issues Revisited After Iowa 10-Year Study Shows No Adverse Affects on Businesses

Posted on: July 4, 2018, 02:00h. 

Last updated on: July 4, 2018, 09:27h.

The pros and cons of smoke-free casinos have been bandied about for eons, but now a new study may shed additional light on whether or not it would actually impact gaming revenues to make casinos entirely nonsmoking.

Rat Pack smoking
In the 1960s, the Rat Pack made smoking in casinos seem cool, but times have changed for the gaming industry. Or have they? (Image: pdxretro.com)

A decade worth of recently released smoke-free data in Iowa could catch the attention of clean air advocates attempting to rid casinos of cigarette smoke for good.

Ten years after the Iowa Smoke-Free Air Act was put into law, state officials say there is no evidence to suggest the ban has adversely affected any businesses — including bars and restaurants — where smoking is prohibited.

In fact, the number of licenses for establishments that sell alcohol has increased and the state has experienced “continued growth,” Stephen Larson, administrator of the Iowa Alcoholic Beverages Division told The Gazette.

The report also indicates that overall, smoking and smoke-related health care has decreased over that span.

As promising as the ten-year update may be, it still falls short of being a conclusive case study when considering the implications on the gaming industry. Like many other states that have enacted smoking bans, Iowa exempts casinos from the law. In states where smoking is prohibited inside casinos, gaming officials have reported revenue drops and complained about inconsistent regulation.

No Butts About It

Last year, citing two years of smoke-free data in New Orleans, Caesar’s Entertainment CEO Mark Frissora said that the Harrah’s Casino saw revenue drop by $69 million from 2014-2016.

New Orleans bucked state law in 2014 by extending a statewide smoking ban to include bars and casinos. Since then, Frissora said, gamblers have taken their business outside the city.

“It’s not fair because everyone else around us doesn’t have the smoking ban,” he said.

Last November, a councilwoman in Gary, IN withdrew a proposed smoking ban after the CEO of two local Majestic Star casinos said the ban would eliminate 400 jobs and cost the state $3 million annually in tax money.  LaVetta Sparks-Wade (D-6th) withdrew the proposed ordinance, saying the ban would create a disadvantage, because the smoking ban would not apply to nearby casinos in other municipalities, according to the Northwest Indiana Times. 

And in Atlantic City, the Revel Casino shutdown in 2014 after just two years of operation. Among many factors that have been attributed to the casino’s closure was its complete smoking ban, which officials say may have turned some customers off. The casino reopened late last month as the Ocean Resort Casino, and the new ownership has re-allowed smoking inside.

Smoke and Mirrors

But while gaming executives may point to revenue drops, other research suggests there is nothing that shows casinos lose money after smoking bans are put into place.

A study appearing in Tobacco Control, a medical journal, examined the consequences of Illinois’ 2008 Smoke-Free Illinois Act, which included casinos. Illinois saw a five percent decline in casino admissions after the ban was put into place.

But the study concluded that the decline– which casino executives pointed to as evidence of the adverse effects of no smoking measures — was more the result of a nationwide recession than the new law.

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

Nevada Lights Up Over Issues

Las Vegas casinos have no smoking in areas where food is served and in most of the city’s poker rooms, but have otherwise thus far resisted a general ban. But just 80 miles north in nearby Mesquite, a group has been laboring for years to bring about change inside that small city’s three casinos.

The Mesquite Citizens for Clean Indoor Air have been lobbying city officials for change since 2016. Casinos are among the city’s largest employers and city council members have repeatedly expressed reluctance to impose a smoking ban on those businesses.

So far, the closest the group has gotten to bringing about change was a ballot initiative petition that would have put the issue in the hands of Mesquite voters.  The petition had the necessary signatures to appear on November’s ballot, but on June 26, just days before the deadline to submit those signatures, a Clark County District Court Judge granted a restraining order and preliminary injunction against the initiative.

A lawsuit was filed by Mesquite Gaming LLC and Rancho Mesquite Casino Inc. against the PAC collecting signatures for the ballot initiative, according to the Mesquite Local News.

The defendants in the lawsuit claim that the “Description of Effect” aspect of the initiative does not adequately or clearly identify where smoking would be prohibited.