After 15 minutes of debate, an Iowa House subcommittee adjourned without commenting or taking action on House File 257 that would require the Iowa Racing and Gaming Commission to establish a process for granting up to two licenses for non-smoking casinos. Currently casino floors are exempt from state smoking restrictions passed in 2008.
State Rep. Ken Rizer, co-sponsor of the bill with state Rep. Todd Taylor, said, “I understand that the members of the committee don’t want to get into picking winners and losers when it comes to who gets casino licenses and that’s not what this bill is about. What this bill is about is exploring the opportunity to create another category of license.”
The bill would create a smoke-free casino in Cedar Rapids as a “pilot project,” Rizer said. He noted many Iowa gamblers and casino employees are concerned about secondhand smoke, and “the people of Cedar Rapids would like to explore the financial viability of going down a smoke-free casino path.” The best way to determine that, Rizer said, would be to grant two gambling licenses to communities willing to explore that option.
The force behind the legislation is Cedar Rapids Mayor Ron Corbett whose efforts to win a gaming license were rejected last April by the IRGC. Commissioners said a Cedar Rapids casino would take too much business from other casinos, particularly Riverside Casino and Golf Course. Riverside lobbyist Frank Chiodo said, “We see this as a unique way of getting around the Racing and Gaming Commission’s ruling. To open this Pandora’s box and to go this route would be devastating, at least to us.”
Lawmakers already have removed from Corbett-designed legislation a provision to send more casino revenue to Iowa’s 84 non-casino counties.
Wes Ehrecke, a lobbyist for the Iowa Gaming Association, said the measure would be “an uncharted precedent” for the legislature to “usurp” the commission’s authority and “mandate” gambling licenses. “For the legislature to mandate something like that we think would be wrong,” he stated. Ameristar Casino lobbyist Susan Cameron added nothing prevents existing casinos from becoming smoke-free, so that option already exists. However, she noted, following the proposed measure would compromise the commission’s research and decision-making authority.
In addition to Corbett’s legislation, the state’s anti-smoking advocates want lawmakers to end the smoking exemption completely at Iowa’s 19 state-licensed casinos. Cedar Rapids lawyer and American Cancer Society spokesman Gary Streit said secondhand smoke endangers the health of casino customers and employees. He added there is “no good study” that conclusively indicates if casinos lose business when they shift from smoking to non-smoking, which Colorado and Illinois did in 2008. He said the health of the economy and the locations of new casinos also have to be considered. “I just get frustrated because the casinos make a lot of money. If they make 10 percent less because they lost a little business, I don’t think they’re going to the poor house,” Streit said.
But casino owners insist a smoking ban would result in significant revenue losses for the casinos, leading to layoffs, lower state tax revenue and less casino revenue for local charities. Riverside General Manager Dan Franz said 56 percent of the casino’s slot machines are in its smoking area and deliver 64 percent of slot bets, while 44 percent of slots in the non-smoking area take in just 36 percent of slot bets.
Franz added the casino has a state-of-the-art ventilation system, but, “The reality of it is, if you’re sitting and playing at a machine right next to a heavy smoker, the air handling system isn’t necessarily going to do too much.” He noted most of the casino’s 700 employees do not work on the casino floor and the rest of the facility essentially is smoke-free. “I just think in today’s world, we’ve taken the smoking and non-smoking into consideration. There are definitely people who will say, ‘I can’t come down because the smoke is so bad.’ But you’re not going to be able to satisfy some of those extreme cases, no matter how hard you try,” Franz stated.
Ehrecke stated Iowa’s three tribal casinos would gladly expand to accommodate gamblers who smoke; others would go to Missouri casinos or tribal casinos in Minnesota and Wisconsin where smoking is permitted. He said Iowa casino revenue would drop 25-30 percent with a smoking ban, and tax revenue would plunge from the current $300 million by $60-$90 annually. That’s what happened in Illinois, he said, when it banned smoking in casinos on January 1, 2008.
Tom Swoik, executive director of the Illinois Casino Gaming Association, concurs. He said the Illinois casino industry had its best year ever in 2007, but in 2008, revenues fell by 20.8 percent following the smoking ban. Iowa, Missouri and Indiana still allow smoking, and we’ve lost customers to those states and they haven’t come back,” Swoik said. However, he noted, the economy played a part in the revenue declines. Also, Swoik said, today “Everybody’s revenue is down the last couple of years because of video gambling,” with 19,000 video gambling terminals in Illinois bars, restaurants, truck stops, fraternal and veterans organizations and many more “loophole” establishments.
