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Ban a 'smoking gun' for casinos

Nov 25, 2008 5:03 PM

by Mark Mayer |

Where there’s smoke there’s profits, according to several leading gaming officials across the United States.

"Gaming was a $100 million business in Colorado, but with the smoking ban it’s down to $75 million," said Lois A. Rice, executive director for the Colorado Gaming Association during last week’s seminar at the Global Gaming Expo. "The smoking ban is our perfect storm. Colorado’s tax revenue from gaming is down 15.72 percent from a year ago since the ban."

Rice said the major hits in her state have taken place at Blackhawk, Central City and Cripple Creek – all historic mining towns some 35 miles from Denver and in the mountains at an elevation of 9,000 feet.

"When the ban went into effect, we had no opportunity for direct mail to our customers," Rice said. "We had to invest $2 million into heated outdoor patios where people could smoke. In the Colorado winter, I don’t think many people are going outside to smoke."

Joe Corbo, vice president and general counsel for Borgata Hotel Casino & Spa in Atlantic City, said that the industry "needs a level playing field" regarding the smoking ban.

"I can speak from Boyd Gaming’s perspective when saying that smoking is a freedom of choice issue," Corbo said. "Just in the past few days, Atlantic City rescinded the total smoking ban, going back to 75 percent being smoke free. It’s our own perfect storm. The culinary union is against the ban. Cocktail servers are making less in tips."

Corbo acknowledged that smoking is a health concern, especially from the effects of second-hand smoke.

"There’s no question that those are legitimate arguments, but Atlantic City is threatened on so many fronts with competition from Pennsylvania and New York," Corbo said. "Some 60 percent of casino revenue is taxed, so when profits are down it’s something we need to address."

The smoking versus nonsmoking question is also an international issue. Chris Downy, executive director of the Australasian Casino Association, said that the 13 casinos in Australia and New Zealand compete for the high-roller business with Macao now and in 2010 Singapore.

"A smoking ban in our high-roller rooms would have decimated business," Downy said. "There are smoking bans in all of the Australian territories in both casinos and pubs. But with 25 percent of our total gaming revenue coming from high rollers, the smoking ban is a definite concern to us."

Stephanie Steinberg, chairwoman for the advocacy group Smoke Free Gaming, was not on the panel but did deliver her side of the issue.

"You have poker rooms that are no smoking, the World Poker Tour is no smoking, the World Series of Poker is no smoking," Steinberg said. "The industry is already in the process of preparing for the inevitable – a 100 percent casino nonsmoking experience.

"Right now all the casinos in Colorado and Illinois are nonsmoking," Steinberg added. "We have begun our grassroots movement in Nevada, the No. 1 gaming state in the nation. We don’t want any exemptions anywhere."

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