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Report: Smoking bans no longer a threat to casino revenue

A woman smokes while playing a slot machine at the Ocean Casino Resort in Atlantic City, NJ A report issued Friday by a Las Vegas gambling research company suggested that ending smoking in casinos will not result in significant financial harm to businesses. (AP Photo / Wayne Parry, File)

For decades, it was accepted wisdom in the casino industry that eliminating smoking would automatically lead to revenue declines and customer losses. But a new report examining how the pandemic coronavirus has changed gamblers’ habits says that may no longer be the case.

The report issued Friday by Las Vegas-based C3 Gaming come 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 party.

It notes that the pandemic changed several key aspects of the casino experience, including the elimination of daily housekeeping in many places, closing of buffets and an end to room service – all of which customers have gotten used to. It suggests smoking will be the next such change to be accepted.

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

“Data from multiple jurisdictions clearly indicates that banning smoking no longer causes a dramatic drop in gaming revenue,” it reads. “In fact, non-smoking properties appear to be performing better than their counterparts that continue to allow smoking.”

The report looks at casinos’ performance in numerous states since the pandemic coronavirus hit in early 2020, and finds that “those casinos that implemented smoking prohibitions did not experience any drop in revenues or lost 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 end smoking in their casinos “without economic cost.”

The authors also predicted that smokers will not abandon Atlantic City casinos in droves if New Jersey bans smoking there, noting that due to smoking bans in Connecticut and New York, and a smoke-free policy at Rivers casino Philadelphia, gamblers from New York, New Jersey and eastern Pennsylvania would have only four options that offered smoking.

The report is the latest in a back-and-forth over whether there is evidence that smoking can be eliminated without harming casinos’ bottom line. It also takes aim at a report commissioned in February by New Jersey’s casinos predicting massive revenue and job losses if a 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 providing big raises are not reached before then.

Gamblers in the northeastern US interviewed by The Associated Press expressed strong support for smoke-free casinos.

John Bucek of Chester, New York, visits Atlantic City six times a year and quickly grew to like the absence of smoking in casinos there 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. A lot of times it drives us out of there. ”

Some gamblers who smoke, however, said they would seek out casinos that continued to allow them to do so.

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

The report found that gamblers in several markets did not flock to smoking casinos when others in the region prohibited 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 do not perform better than those that allow it. 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 slot machine win-per-day performance that is greater than those in Atlantic City over the past 12 months.

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