Casino smoking bans loom for two US states
Smoking bans being considered in New Jersey and Colorado would hurt revenue at casinos, analysts and industry lobbyists say.
Legislatures in both states are weighing bills that would ban smoking in public areas.
"We believe the outcome of the bill could have a considerable impact on Atlantic City casinos," Deutsche Bank analyst Marc Falcone said, adding that an estimated one-third of casino clients are smokers.
The Casino Association of New Jersey, which represents all the major casinos in Atlantic City, opposes including casinos in the statewide ban.
"All of the casinos in Atlantic City currently feature sophisticated ventilation and filtration systems, and most offer non-smoking sections as well," Audrey Oswell, president of the association, said. "The volume of play, however, in nonsmoking sections in the casino is significantly less."
Chapter Local 54 of Unite HERE -- the union that represents 10,000 casino employees -- is supporting the New Jersey bill to protect union members against second-hand smoke.
Colorado is a big regional gaming market with more than 40 casinos.
"This (ban) goes against the 'capture theory,'" William Thompson, a casino expert and professor at the University of Nevada-Las Vegas, said in an interview, referring to casinos' attempts to keep people inside their buildings.
"Now people will go out to smoke and get more of a perspective on things. They might think they are losing too much, or they should quit (gambling) for a while," he said. "Worse yet, once they are outside, they might think of trying another place or leaving altogether."
"I think it would stand to reason they would lose business. They would lose at least the time it takes to smoke a cigarette. And 20 minutes of gambling can be $100 even at the cheap tables," he said.
The history of similar legislation indicates Atlantic City and Colorado would lose revenue, at least initially.
Gaming revenue at Delaware's three "racinos" -- racetracks that have slot machines -- fell 11 percent in 2003 after a smoking ban was implemented in 2002.
Tabcorp Holdings Ltd. (TAH.AX:Quote,Profile,Research) , Australia's largest gaming group, saw gaming revenue fall 8 percent after the Australian state of Victoria banned smoking in Sept. 2002.
The only smoke-free casino in the United States is the Taos Mountain Casino in Taos, New Mexico, according to the American Gaming Association.
Several studies show that gamblers are more prone to smoke than the rest of the adult population -- about 50 percent of compulsive gamblers are smokers, compared with about 25 percent of the overall adult population, Thompson said.
The bills have to be approved by the state legislatures, before the governors could sign them into law, a process that likely will stretch into July.
2005-03-12
