But expect revenue to take an initial hit??
Smoking is banned in all public places in the state of Nevada with the notable exception of casino floors. But that could change, according to Deutsche Bank gaming analyst Andrew Zarnett. Zarnett predicts that a ban on smoking in Vegas could happen after Macau goes through with its plan to ban smoking on gaming floors in October.??
The Las Vegas Review-Journal tied the possibility of smoke-free casino floors in Vegas directly to Macau. As the world’s largest gaming market, it produced $45.2 billion in gaming revenue in 2013, and the market is up 12.6 percent through June. If a smoking ban doesn’t hurt gaming revenue there, the Review-Journal reported, it could set a precedent that Vegas may follow.??
“It clearly adds incremental pressure for the introduction of similar legislation in Las Vegas,” Zarnett said.??However, Zarnett added, fresh air in Nevada’s gaming halls could come at a cost. He said a smoking ban could result in a 7.5 percent decline in gaming in its first full year.
??In a report, Zarnett cited an 11.3 percent decline in the Delaware gaming market following a smoking ban in 2002. Illinois casinos saw a 20.9 percent revenue drop after the Smoke-Free Illinois Act was enacted in 2007.??
Zarnett pointed out that Nevada’s 2006 anti-smoking law, which banned smoking in bars, restaurants and taverns, was responsible in part for the 2010 bankruptcy of Herbst Gaming, which suffered a 20 percent decline in slot route operation revenue after the legislation went into effect.??
When smokers take a cigarette break, they have time to “reconsider their play situation,” Zarnett said. “If lady luck has been kind to them, they may decide to call it a day. Meanwhile, if their efforts to beat the house are unsuccessful, they may decide that they have lost enough.
”??Macau casinos agreed to the ban because it doesn’t apply to private gaming salons. In preparation for the ban, the Chinese resorts are building smoking rooms with their own heating, ventilation and air- conditioning systems. The rooms can’t include table games or slot machines.??
Stephanie Steinberg, chairwoman of Washington, D.C.-based Smoke-Free Gaming of America, said casino smoking bans “are everywhere and inevitable. Nevada is next and the gaming industry knows it.”
