Smoking bans sap casinos’ revenue

Gaming’s had it tough in Las Vegas lately.

The state collected 14.5 percent less money in gaming taxes in September than it hauled in a year earlier.

But officials in some states would love to have fared so well.

Thanks to smoking bans initiated in early 2008, Colorado and Illinois have sustained major dips in gambling revenue, according to experts on a panel Wednesday at the Global Gaming Expo.

Gaming-tax collections in the Centennial State were off as much as 25.4 percent in the second quarter year over year in some jurisdictions, and as much as 53 percent in the third quarter year over year once you throw in the effects of a new, graduated tax, said Lois Rice, executive director of the Colorado Gaming Association.

In the Land of Lincoln, gaming revenue has trended downward all year, including a 25.6 percent drop year over year in October, said Wes Ehrecke, president of the Iowa Gaming Association.

Illinois’ decline has happened even as gaming revenue in neighboring Iowa, where there’s no smoking ban in casinos, rose or stayed steady from January to October, Ehrecke said.

If there’s any positive news for the folks in Colorado and Illinois, it comes from the other side of the globe.

Chris Downey, executive director of the Australasian Casino Association, discussed Australia’s myriad smoking bans, which started taking effect in 2003.

Though slot revenue inside individual casinos immediately fell anywhere from 8 percent to 12 percent, gambling halls bounced back after two years to four years.

The key to surviving, said Downey, was advance notice.

Properties in Australia typically had two years or more to adjust to pending bans. They used the lead time to launch marketing efforts, communicate with customers about the change, build upscale smoking balconies and install advanced air-conditioning systems.

Stateside jurisdictions haven’t always enjoyed the luxury of time to prepare for smoking bans.

Colorado casinos, for example, had six months’ notice. Most casinos already had their marketing materials printed up more than six months out, Rice said.

Nor could the Colorado Legislature have picked a worse time for the ban, which exempted the state’s tribal casinos. The economic downturn and record gasoline prices joined the smoking ban to form a “perfect storm,” Rice said.

Casino operators have invested $2 million in heated smoking patios, and they’ve mounted “extensive” marketing efforts. Still, gaming-tax collections through the first three quarters fell 15.7 percent, from $86.8 million in 2007 to $74.8 million in 2008. For the full year, experts forecast collections of $75 million to $80 million, down from $100 million in 2007. That will mean less money for the historic preservation initiatives that casino dollars fund in Colorado.

“Don’t believe the anti-smokers’ rhetoric that the population of nonsmoking gamblers will replace the smokers who leave,” Rice said. “It’s not true. It’ll never happen. And don’t let the states say there’ll be no impact at all. If you’re facing a ban, just keep your Legislature educated as to the economic impacts.”

Economic impacts have stayed top-of-mind for casino operators in Atlantic City, where a smoking ban has wandered through several iterations.

What started in April 2006 as a smoking ban with a casino exemption became in April 2008 a 100 percent ban on smoking wherever people gamble.

Lawmakers suspended that ban for a year beginning Sunday because of the ailing economy. The law now allows smoking on 25 percent of a casino’s floor.

When policymakers reconsider the ban in 2009, Joe Corbo, vice president and general counsel of Boyd Gaming Corp.’s Borgata and president of the Casino Association of New Jersey, hopes they understand that smoking bans aren’t simply about employee and consumer health.

Health is important. But competitive issues are vital, too. Atlantic City must vie for customers with casinos in Pennsylvania and Connecticut, neither of which has an extensive smoking ban. And while some casino workers support the ban, others oppose it because they worry about potential declines in income and tips.

Contact reporter Jennifer Robison at jrobison@reviewjournal.com or 702-380-4512.

Business Videos
Las Vegas Convention Center expansion taking shape
Renderings and actual footage show how the Las Vegas Convention Center is evolving.
Former Starbucks CEO Howard Schultz at Las Vegas convention
Former Starbucks CEO and potential presidential candidate Howard Schultz spoke at the Epicor Insights user conference at Mandalay Bay Convention Center Wednesday, April 17, 2019. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Drew Las Vegas to open in the second quarter of 2022
The 67-story Drew Las Vegas is slated to open in the second quarter of 2022 at the north end of the Las Vegas Strip. (Michael Quine/Las Vegas Review-Journal)
NAB Day 1 (Time Lapse)
NAB kicked off at the Las Vegas Convention Center on Monday, April 8, 2019. (Mat Luschek / Review-Journal)
National Association of Broadcasters Show shows 1mm thick 8K TV with 22.2 channel digital sound
Japan’s NHK Science & Technology Research Laboratories booth featured a 1mm thick 8K TV system used in conjunction with a 22.2 channel digital sound system at the National Association of Broadcasters Show at the Las Vegas Convention Center. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Nevada shoppers react to Smith’s no longer accepting Visa credit cards
On March 1, Smith’s announced that it would no longer be accepting Visa credit cards at any of its 142 supermarkets, including the 45 in Nevada.
Massachusetts Gaming Commission asks how long Wynn executives knew about misconduct
Business reporter Rick Velotta gives an update on the adjudicatory hearing on the suitability of Wynn Resorts to retain its gaming license in Massachusetts.
Henderson app developer part of Startup in Residence
Henderson based developers of the app On Point Barricade are taking part in Startup in Residence, a North America program dedicated to pairing tech companies with governments. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Sam's Town employees and customers talk of their love for the iconic casino
Longtime Sam's Town employees and customers love each other and love their casino. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Las Vegas apartments rents
Las Vegas’ apartment market has accelerated in recent years. Developers are packing the suburbs with projects, landlords are on a buying spree, and tenants have filled buildings.
William Boyd talks about the birth of Sam's Town
On the eve of the 40th anniversary of Sam's Town, William Boyd, executive chairman of Boyd Gaming and son of hotel namesake Sam Boyd, talks about how the casino became one of the first local properties in Las Vegas. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
High Roller observation wheel turns five
The world’s tallest observation wheel celebrates it’s fifth year on Sunday, March 31, 2019. (Michael Quine/Las Vegas Review-Journal) @Vegas88s
Escape Room Industry Growing In Las Vegas
Escapology employees discuss the growing escape room industry in the U.S. and Las Vegas. (Bailey Schulz/Las Vegas Review-Journal)
Impact of parking fees on visiting the Las Vegas Strip
There are no data showing a relationship between Strip resort and parking fees and the number of out-of-state visitors to Las Vegas. But there are data showing a relationship between Strip parking fees and the number of local visitors to the the Strip. ‘’As a local, I find myself picking hotels I visit for dinner or entertainment, based on whether they charge for parking or not,”’ said David Perisset, the owner of Exotics Racing. ‘’It is not a matter of money, more of principle.’’ A 2018 survey by the Las Vegas Global Economic Alliance found 36.9 percent of Clark County residents reported avoiding parking at Strip casinos that charge for parking. 29.1 percent reported avoiding using any services from a Strip casino that charges for parking.
MGM's sports betting deals
MGM Resorts International signed a sports betting sponsorship agreement with the NBA in July It was the first professional sports league to have official ties with a legal sports betting house. The deal came just two months after the U.S. Supreme Court overturned a law prohibiting sports betting in most states. In October, MGM became the first gaming company to sign a sports betting partnership with the NHL. In November, MGM became the first gaming company to sign a sports betting partnership with the MLB. Financial terms of Tuesday’s deal and earlier partnerships have not been announced.
Faraday puts Las Vegas land on the market
Nearly two years after Faraday Future bailed on its North Las Vegas auto factory, the company has put its land up for sale. (Michael Quine/Las Vegas Review-Journal)
El Cortez owner Kenny Epstein on running the iconic property
Kenny Epstein, owner of the El Cortez Hotel in downtown Las Vegas, talks about Jackie Gaughan mentorship and answers rumors about bodies in the basement at the mob-era casino. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
LVCVA recommends construction of underground people mover
The Las Vegas Convention and Visitors Authority announced the recommendation for an underground people mover for the convention center. The system would have the potential to expand and connect Downtown and the resort corridor all the way to McCarran. (Michael Quine/ Las Vegas Review-Journal)
LVCVA/Boring Company Press Conference
The Las Vegas Convention and Visitors Authority announced a collaboration with Elon Musk's The Boring Company to develop and operate an autonomous people mover system for the Las Vegas Convention Center District.
International Pizza Expo includes green and gluten free
The International Pizza Expo at Las Vegas Convention Center included companies focused on vegan and gluten free, and plant-based pizza boxes. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
International Pizza Expo kicks off in Las Vegas
The first day of the International Pizza Expo at Las Vegas Convention Center is everything Pizza. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
T-Mobile program aids guests with sensory needs
A program at T-Mobile Arena is designed to provide a more sensory friendly experience for guests.
Photo Booth Expo
Danielle May talks about how Simple Booth transformed her Volkswagen bus into a business.
Nevada Gaming Commission's highest fines
The highest fines assessed by the Nevada Gaming Commission, according to commission Chairman Tony Alamo: 1) Wynn Resorts Ltd., $20 million, 2019 2) CG Technology (then known as Cantor G&W Holdings), $5.5 million, 2014 3) The Mirage, $5 million ($3 million fine, $2 million compensatory payment), 2003 4) Stardust, $3 million, 1985 5) Santa Fe Station, $2.2 million ($1.5 million fine, $700,000 compensatory payment), 2005 6) Las Vegas Sands, $2 million, 2016 7) CG Technology, $1.75 million, 2018 8) CG Technology, $1.5 million (also $25,000 in escrow for underpaid patrons), 2016 9) Caesars Entertainment, $1.5 million, 2015 10) Imperial Palace, $1.5 million, 1989 11) Peppermill Casinos, $1 million, 2014
Tiny Pipe Home vs Shipping Crate
A Tiny pipe home was displayed at the International Builders Show this week in Las Vegas.
Auto repair shortage affects Las Vegas
The auto repair industry is facing a national shortage of workers.
Franchising industry booming
Experts say Las Vegas is a hotbed for the franchise industry.
Africa Love owner talks about his store in Las Vegas
Mara Diakhate, owner of Africa Love, gift and decor store, talks about his store in Las Vegas. (Bizuayehu Tesfaye/ Las Vegas Review-Journal) @bizutesfaye
Developer gets approval to build homes at Bonnie Springs
The Clark County Planning Commission has approved a plan to build 20 homes on the site of Bonnie Springs Ranch. (Michael Quine/Las Vegas Review-Journal)
Dig This opens new location In Las Vegas
Remember when you were a kid and played with construction toys in the sand box? Dig This Las Vegas has the same idea, except instead of toy bulldozers, you get to play with the real thing. (Mat Luschek/Review-Journal)
TOP NEWS
Home Front Page Footer Listing