Has Smoking Ban Hurt Colorado Casinos?

Casino’s Report Revenue Loss After Ban, But There May Be Other Factors

Black Hawk, Colorado — The haze has yet to clear on whether a 3-month-old smoking ban is responsible for declining fortunes at the casinos in Colorado’s three gaming towns.

Since the state extended an indoor smoking ban to its 40 casinos on Jan. 1, the gambling industry has reported a drop in business here and in the other gaming towns of Central City and Cripple Creek. But casino-goers and operators alike point to a variety of additional reasons for the downturn.

„We’ve had an impact from the smoking ban, but we know it’s not just smoking,“ said Heather Leigh, spokeswoman for the Ameristar Casino in Black Hawk. „We know part of it is weather. We are 40 minutes from Denver, so it could be gas prices. And people have been talking about recession.“

February statistics show casino revenue dropping to USD 57.9 million, down 10.1 percent compared with the same month last year. In January, proceeds fell to USD 56.7 million, off 3.6 percent from a year ago.

On a visit to Black Hawk late last month, Colleen O’Hara took a break from playing the slot machines to light up on Ameristar’s front patio.

„It’s not going to prevent me from coming here, but I don’t come as much as I used to,“ she said.

But the price of gas has been as much of a factor as anything else.

O’Hara said she burns though half a tank of gas on the trip from Littleton to Black Hawk. „That’s USD 30 out of my pocket just to get here.“

Just up the road in Central City, a silver-haired woman hooked up to an oxygen tank puffed on a cigarette as she sat on a bench on Main Street.

The casino towns have made it easier for smokers to step outside by passing local ordinances that require smokers to be only an inch away from a casino entrance instead of the 15 feet the state law requires.

But smokers also acknowledge that when they’re outside smoking, they’re not pumping money into the slots.

„The simple fact is … you have to leave the machine to have a cigarette,“ said Ameristar’s Leigh.

Not surprisingly, nonsmokers have no regrets about the change. „The smoke was so thick you could cut it with a knife,“ said Linda Moore, who lives in Grand Junction and likes to visit the casinos in Black Hawk about once a month.

„If the casinos are upset, tell ‚em to chill out. I quit coming here because I couldn’t take it. Now I’m back because the smoke is gone.“

In other markets across the nation, some casinos have reported declines in recent months as consumers cut back on some of their discretionary spending:
  • In Nevada, home to the Las Vegas strip and other towns with far more gambling attractions than Colorado, business has suffered. Total revenues for Nevada’s casinos fell almost 5 percent in January to USD 1.064 billion, according to the state’s gaming division.
  • New Jersey and Illinois also reported significant declines in the same month compared with a year ago, according to data collected by the American Gaming Association.
Colorado gaming regulators estimate it could take several months to determine the initial impact of the smoking ban.

„It’s difficult to quantify right now,“ said Don Burmania of the Colorado Division of Gaming. „It will take about six months (of data) to get a fair assessment.“

Experts say it could take far longer.

Lexington, Ky.-based consultant Richard Thalheimer pored over several years of statistics to determine that prohibiting smoking in Delaware had been a blow to the „racinos“ there.

„You have to adjust for all those factors and look at data over a long period of time,“ said Thalheimer, who specializes in the economics of the racing and gaming industry.

Even the Federal Reserve has joined the debate on the potential impact.

„Economic effects of smoke-free laws may be difficult to identify and interpret, but analysis suggests that at least some businesses do suffer costs,“ according to an article published in January by the St. Louis Fed.

For proponents of the ban, the biggest effect seems obvious.

„The impact has been that the casinos‘ employees have benefited tremendously by being able to go to work and not having to breathe secondhand smoke,“ said Stephanie Steinberg of Smoke-Free Gaming of Colorado, the grass-roots group that lobbied to extend the ban to casinos.