Report: The smoking ban is no longer a threat to casino revenue

ATLANTIC CITY, NJ (AP) – For decades, it was accepted in the casino industry that smoking cessation would automatically lead to revenue declines and customer losses.

But a new report examining how the coronavirus pandemic changed player habits says 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, are considering banning smoking in casinos. The research firm says its report was done independently and was not funded by any outside parties.

He notes that the pandemic has changed several key aspects of the casino experience, including the elimination of daily cleaning in many places, the closing of buffets and the end of room service – which customers have become accustomed to. He suggests that smoking will be the next change to be accepted.

“The pandemic has altered consumer expectations and behavior in virtually every industry, including retail, entertainment, hospitality, restaurants and casino gaming. One such change (is) in attitudes towards smoking in casinos,” the three authors of the report wrote.

“Data from several jurisdictions clearly indicate that the smoking ban no longer causes a dramatic drop in gaming revenue,” it said. “In fact, non-smoking properties appear to perform better than their counterparts that continue to allow smoking.”

The report analyzes the performance of casinos in various states since the onset of the coronavirus pandemic in early 2020 and concludes that “casinos that implemented smoking bans did not experience a drop in revenue or loss of market share to nearby casinos that continued to offer smoking environments. ”

The authors also interviewed tribal casino executives, who said profitability was starting 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 will not leave Atlantic City casinos in droves if New Jersey bans smoking there, noting that due to smoking bans in Connecticut and New York, and a no-smoking policy at Rivers Philadelphia casino, New York gamblers , New Jersey and eastern Pennsylvania would have only four options that offered smoking.

The report is the latest in a discussion of whether there is evidence that smoking can be eliminated without harming casino results. It also aims to report commissioned in February by New Jersey casinos, predicting massive revenues and job losses if the smoking ban were implemented.

The stakes are high, particularly in New Jersey, where the main casino workers union is threatening a strike. in July if new contracts with big increases are not reached before then.

Northeastern US gamblers interviewed by the Associated Press expressed strong support for smoke-free casinos.

“Smokers will say they won’t gamble anymore if you 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 will have no effect, and smokers say that because they don’t want the law to change.”

Erik Lovequist of Billerica, Mass., quit smoking 14 years ago and hadn’t visited Rhode Island’s Twin River Casino “in a long time due to the fact that the entire casino, including much of the non-smoking area, smells like an ashtray. I am enjoying 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 came to appreciate the lack of smoking in casinos during the first year and a half of the pandemic.

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

Some gamblers who smoke, however, said they would look for casinos that continue to allow it.

The report notes revenue declines that followed smoking cessation in Delaware, Colorado, Illinois, Deadwood, South Dakota and New Orleans. But it also noted that there were other economic factors that may have influenced revenue, including the opening of new competition nearby. And he said those revenue declines “tend to rebound in subsequent years.”

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

The authors admitted 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 located in a non-smoking area.”

But they also found that casinos that offer smoking don’t perform any better than those that allow it. Showed that 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 a performance of earnings per day on slot machines that is higher than in Atlantic City in the last 12 months.

Las Vegas, the country’s largest gambling market, remains a bastion of casino smokers; only one resort, Park MGM, completely bans smoking. New Jersey allows smoking on up to 25% of the casino floor.

Rivers Casino in Philadelphia 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 meet the city’s ever-changing pandemic mandates.

In April, the casino adopted a policy that allows its smoking customers to use the restaurant’s patio for smoking, avoiding the need to go through metal detectors twice additional when leaving and re-entering the casino.

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

The casino decided to continue smoking even after being able to resume smoking, in part, because of the experience of operating during the pandemic.

“It was hard to tell people ‘we’re keeping you safe’ and then allow people 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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