Casinos suffer revenue drop when smoking is banned

Las Vegas — Casinos in places that have banned smoking in gambling areas have suffered major revenue losses, though increased marketing and investment can lure customers back, a panel of experts told a gambling conference Tuesday.

Since the Canadian province of Ontario imposed a smoking ban in public places in May, casinos along the border with the United States have suffered a revenue drop of 10 percent to more than 20 percent, said Ontario Lottery and Gaming Corp. vice president Karl Gagesch.

„Short-term pain,“ Gagesch said. „Long term, we think we’re going to be OK.

The largest impact has been at Casino Windsor, which laid off more than 300 employees over the summer as American smokers stayed in Michigan and New York to gamble, he said. Visitation was also hurt by a strong Canadian dollar and tougher border security, he said.

Gagesch said the province hopes a USD 400 million refurbishment plan for casinos along the border will help reverse the trend. Casino Windsor also began allowing sports betting in September to compete with Detroit casinos, which can’t match the offering.

„The overall plan there is to create different reasons for American customers to come over the border,“ he said.

A similar smoking ban at three racinos, or race tracks that also offer slot machines, in Delaware also had a negative impact, with slot machine revenue down 10 percent to 19 percent since the ban was imposed in 2002, said Richard Thalheimer, an economist and president Thalheimer Research Associates.

Slot revenue has since rebounded, he noted, mainly because of the introduction of more slot machines.

Karen Blumenfeld, a member of the New Jersey Group Against Smoking Pollution (GASP), heralded the panel’s openness to adapting to a wave of anti-smoking legislation sweeping the country.

„It’s not the gloom and doom,“ she said. „I’m very relieved that the industry is now embracing these changes.“

New Jersey’s anti-smoking law, which went into effect in April, bans smoking in virtually all public establishments, including bars and restaurants, but exempts casino gambling areas.

Even anything-goes Nevada voted last week in favor of the more restrictive of two anti-smoking ballot initiatives, which will ban smoking at bars that serve food, and around the slot machines at supermarkets, gas stations and convenience stores starting in December. Casino floors, however, remain exempt.

A similar Colorado law enacted July 1 left casino floors open to smokers, but applied to bars and restaurants. That won’t stop the casino industry from adopting more nonsmoking table game areas, said Lois Rice, executive director of the Colorado Gaming Association.

„What we’ll be interested to see is how the expansion of nonsmoking table game areas in our properties will affect revenue,“ she said.

„Whether table game revenue will increase because we’re able to draw more nonsmoking patrons or whether it will decrease. So that’s something we’re going to be watching very closely.“

The panel was one of many gathered Tuesday at the Global Gaming Expo, an annual convention that this year was expected to draw nearly 30,000 attendees and feature 780 companies. The convention runs through Thursday.