Casinos hit by cigarette bans say theyll find ways to compensate
Dec. 2, 2006. 01:00 AM, RYAN NAKASHIMA, ASSOCIATED PRESS, Toronto Star
LAS VEGAS–Smoking bans are snuffing out casino revenue, but gambling experts hold out hope that more marketing and investment can lure customers back.
Since the province of Ontario imposed a smoking ban in public places in May, casinos along the border with the United States have suffered a revenue drop of 10 per cent to more than 20 per cent, Ontario Lottery and Gaming Corp. vice-president Karl Gagesch told a gambling conference last month.
"Short-term pain," said Gagesch, who was part of a panel discussion. "Long term, we think we’re going to be okay."
The largest impact has been at Casino Windsor, which laid off more than 300 employees over the summer as American smokers stayed in Michigan and New York to gamble, he said.
Visitation was also hurt by a strong Canadian dollar and tougher border security, he said.
Gagesch said the province hopes a $400 million refurbishment plan for casinos along the border will help reverse the trend. Casino Windsor also began allowing sports betting in September to compete with Detroit casinos, which can’t match the offering.
"The overall plan there is to create different reasons for American customers to come over the border," he said.
A similar smoking ban at three Delaware "racinos" — race tracks that also offer slot machines — also had a negative impact, with slot machine revenue down 10 per cent to 19 per cent since the ban was imposed in 2002, said Richard Thalheimer, an economist and president of Thalheimer Research Associates.
Slot revenue has since rebounded, he noted, mainly because of the introduction of more slot machines.
Karen Blumenfeld, a member of the New Jersey Group Against Smoking Pollution (GASP), heralded the panel’s openness to adapting to a wave of anti-smoking legislation sweeping both countries.
"It’s not the gloom and doom," she said. "I’m very relieved that the industry is now embracing these changes."
Even anything-goes Nevada voted last week in favour of banning smoking at bars that serve food, and around the slot machines at supermarkets, gas stations and convenience stores starting in December. Casino floors, however, remain exempt.
A similar Colorado law enacted July 1 left casino floors open to smokers, but applied to bars and restaurants. That won’t stop the casino industry from adopting more non-smoking table game areas, said Lois Rice, executive director of the Colorado Gaming Association.
"What we’ll be interested to see is how the expansion of non-smoking table game areas in our properties will affect revenue," she said. "Whether table game revenue will increase because we’re able to draw more non-smoking patrons or whether it will decrease. So that’s something we’re going to be watching very closely."
The panel was one of many gathered at the Global Gaming Expo, an annual convention that this year was expected to draw nearly 30,000 attendees and feature 780 companies. Copyright Toronto Star Newspapers Limited. All rights reserved.
