Report: Smoking bans no longer a threat to casino revenue

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ATLANTIC CITY, NJ — For decades, it was accepted in the casino industry that eliminating smoking would automatically lead to lower revenue and lost customers.

But a new report looking at how the coronavirus pandemic has changed gamer habits suggests that may no longer be the case.

The report released Friday by Las Vegas-based C3 Gaming comes as several states, including New Jersey, Rhode Island and Pennsylvania, consider banning smoking in casinos. The research company claims that its report was produced independently and was not funded by any outside party.

He notes that the pandemic has changed several key aspects of the casino experience, including the elimination of daily housekeeping in many places, the closing of buffets, and the end of room service — which patrons have grown accustomed to. This suggests that smoking will be the next such change to be accepted.

“The pandemic has changed consumer expectations and behavior across virtually every industry, including retail, entertainment, lodging, restaurants and casino gaming. One of those changes (is) in attitudes towards smoking in casinos,” the three authors of the report wrote.

“Data from multiple jurisdictions clearly indicates that the smoking ban is no longer causing a dramatic decline in gaming revenue,” it read. “In fact, non-smoking properties seem to be performing better than their counterparts that continue to allow smokers.”

The report examines the performance of casinos in many states since the coronavirus pandemic hit in early 2020 and finds that “casinos that have implemented smoking bans have experienced no decline in revenue or loss of share. market to the benefit of neighboring casinos which continued to offer smoking environments”. ”

The authors also interviewed tribal casino executives, who said profitability was beginning to increase due to lower maintenance costs, adding that 157 tribes were able to quit smoking in their casinos “at no economic cost”.

The authors also predicted that smokers would not abandon Atlantic City casinos in droves if New Jersey banned smoking there, noting that due to smoking bans in Connecticut and New York and a smoke-free policy at Philadelphia’s Rivers Casino, players in New York, New York Jersey and Eastern Pennsylvania would only have four options offering smoking.

The report is the latest in a back-and-forth on whether there is evidence that smoking can be eliminated without hurting casino bottom lines. It also takes aim at a report commissioned in February by New Jersey casinos predicting massive revenue and job losses if a smoking ban is implemented.

The stakes are high, especially in New Jersey, where the main union for casino workers threatens to strike in July if new contracts with big raises are not reached by then.

Players in the northeastern United States surveyed by The Associated Press expressed strong support for smoke-free casinos.

“Smokers will say they won’t gamble if they ban smoking,” said Linda Quinn of Montvale, New Jersey. “They said that when they made restaurants and bars smoke-free and it didn’t affect them at all. I honestly believe it won’t work, and smokers say that because they don’t want the law to change.

Erik Lovequist of Billerica, Mass., quit smoking 14 years ago and hasn’t visited Rhode Island’s Twin River Casino “in a very long time due to the ashtray smell throughout the casino, including a large part of the non-smoking area. I appreciate having the completely non-smoking Encore Casino half an hour away.

John Bucek of Chester, New York, visits Atlantic City six times a year and quickly came to appreciate the absence of smoking in casinos during the first year and a half of the pandemic.

“Now that he’s back, it’s terrible,” he said. “I never realized how bad it was. A lot of times it gets us out of there.

However, some gamblers who smoke said they would look for casinos that continued to allow them to do so.

The report notes a decline in income following the end of smoking in Delaware, Colorado, Illinois, Deadwood, South Dakota and New Orleans. But he also noted that other economic factors may have influenced revenue, including the opening of new competition nearby. And he said those revenue declines “tended to pick up in subsequent years.”

The report found players in several markets weren’t flocking to smoking casinos while others in the region were banning smoking, citing examples from Pennsylvania, Indiana and elsewhere.

The authors conceded that “it is an irrefutable fact that a slot machine located 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 don’t perform better than those that allow it. He showed the Parx Casino in Philadelphia; Empire City in Yonkers, New York; Foxwoods and Mohegan Sun in Connecticut, and Resorts World in the Queens section of New York have higher win-per-day slot 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, completely prohibits smoking. New Jersey allows smoking up to 25% of the casino area.

Philadelphia’s Rivers Casino has been smoke-free since August 2021, when General Manager Justin Moore decided it was operationally easier to stay that way rather than change policy to comply with the city’s frequently changing pandemic mandates. .

In April, the casino adopted a policy allowing its smoking patrons to use a restaurant patio to smoke, thereby avoiding having to go through metal detectors twice more when exiting and re-entering the casino.

Financial results have been mixed, with some good months and others where revenue has lagged expectations, Moore said, adding that inflation, labor shortages and new competition nearby are making it difficult attribution of revenue performance to a single factor.

The casino decided to remain smoke-free even after it was able to resume smoking, in part due to the experience of operating during the pandemic.

“It was hard to tell people, ‘We’ve got you covered,’ and then allow people to blow particles into the air,” he said.

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

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