A report commissioned by the Atlantic City casino industry claimed that that closing the smoking loophole in Atlantic City casinos would reduce gaming revenues, which could in turn lead to employee cutbacks and the closure of a casino or two. The report cited information that was in some cases more than a decade old.
Last month, Las Vegas-based C3 Gaming issued a report using more recent data that demonstrated casinos can go smoke free with little financial impact, and in some cases, financial benefits.
But a new report from C3, cited he coronavirus pandemic experience, showed that smoking was neutralized as a factor during the period when restrictions existed.
Released June 14, the report was not financed by casinos or any other outside organization. The restrictions that accompanied the pandemic closed buffets and ended room service. Customers adapted and still visited casino hotels. Smokers would do the same, the report suggests.
“Covid-19 caused a radical change in consumer attitudes to smoking in casinos,” the paper said.
Covid-19 health mandates post-lockdowns created a unique nation-wide research study that produced fresh data on how casino revenue is affected by the absence of smoking. The resulting data shows that non-smoking properties appear to have performed better than their counterparts that have continued to allow smoking.
“The pandemic 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, Andrew Klebanow, Lawrence Chen, and Gerard Parisi, wrote.
“Data from multiple jurisdictions clearly indicates that banning smoking no longer causes a dramatic drop in gaming revenue,” it read. “In fact, non-smoking properties appear to be performing better than their counterparts that continue to allow smoking.”
The report found that casinos that instituted smoking prohibitions did not experience a drop in revenue or loss of market share to nearby casinos that still offered smoking, according to the co-authors.
Tribal casino executives said profits were on the way up as a result of lower maintenance costs after cessation of smoking. Indeed, 157 tribes cut smoking in their casinos “without economic cost.”
The authors said smokers wouldn’t desert Atlantic City casinos in droves if New Jersey does ban smoking. Connecticut and New York casinos already have a ban in place as does Rivers and Parx casinos in Philadelphia. That cuts back the competition where smoking exists.
Gamblers in the northeastern U.S. interviewed by the Associated Press expressed strong support for smoke-free casinos.
“Smokers will say that they aren’t going to go gamble any more if they ban smoking,” said Linda Quinn of Montvale, New Jersey. “They said this when they made restaurants and bars non-smoking, and it didn’t affect them at all. I honestly believe it will not have an effect, and smokers say that because they don’t want the law changed.”
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 is back, it is terrible,” he said. “I never realized how bad it was. A lot of times it drives us out of there.”
The report found that gamblers in several markets did not jump to smoking casinos when others in the region banned the practice, mentioning Pennsylvania and Indiana.
“It was also known that a slot machine in a smoking area generated more money than a machine in a non-smoking area,” the C3 report said. “In fact, there is not a slot director in the industry that would have refuted that statement prior to the pandemic.”
What’s more, the authors reviewed the data used to write a report commissioned by the Casino Association of New Jersey. C3 found that the authors who wrote the report relied on pre-pandemic data going back 20 years and did not consider post-pandemic revenue trends and customer surveys.
A further study conducted in the Pacific Northwest by Meczka Markets found that location close to home was the primary reason for choosing a casino at 32 percent, followed by a non-smoking policy at 26 percent. Smoking is cited as a reason for choice of casino by only 4 percent, according to Asia Gaming Brief.
The C3 report also indicated that the Parx Casino in Philadelphia; Empire City in Yonkers, New York; Foxwoods and Mohegan Sun in Connecticut; and Resorts World in Queens; have slot machine win-per-day performance exceeding those in Atlantic City over the past 12 months.
The Rivers Casino in Philadelphia went smoke-free in August 2021, when general manager Justin Moore decided it was easier than changing policy over and over to fit the mandates from the city.
Results have been mixed, with some good months and others that fell short of projections, Moore said. But inflation, labor shortages and new competition nearby make it hard to blame performance on smoking alone.
The casino decided to remain smoke free even after it could have resumed smoking, in part, out of the experience of operating during the pandemic.
“It was hard to tell people, ‘We’re keeping you safe,’ and then allow people to blow particles into the air,” he said.
The report also points out that although smoking can trigger revenue declines, those figures rebound over time.
It is clear that this issue will continue to spark debate moving forward. C3 Gaming’s contribution to the conversation provides detailed data countering commonly held beliefs in the casino industry that property revenues depend on catering to “typical” gamblers who demand to be allowed to smoke indoors.
A smoking ban measure is being considered by the New Jersey legislature, but has yet to be scheduled for hearings. Governor Phil Murphy has said he would sign the bill if it made it to his desk—a questionable proposition at this time.
The report can be found in its entirety here.
