Report: Casino smoking ban could cost 2,500 jobs, have major hit to revenue (updated)

Daniel J. Munoz//February 24, 2022

Report: Casino smoking ban could cost 2,500 jobs, have major hit to revenue (updated)

Daniel J. Munoz//February 24, 2022

A new report warns that the latest push to ban smoking on Atlantic City casino floors could cost the region up to 2,500 jobs and shave off nearly 11% of casino revenue, should the restriction ultimately be enacted.

The Feb. 23 report comes from Spectrum Gaming Group, an independent gaming analysis firm, which looked at the longstanding carveout in New Jersey law that banned smoking in most public places — except casinos.

“Now is not the time to enact a smoking ban,” said Joe Lupo, president of Hard Rock Atlantic City and of the Casino Association of New Jersey, the latter of which commissioned the Spectrum study.

Visitation to the seaside resort, he said, is at a 20-year low, while the workforce is half of what it was in 2003, and casinos have struggled to achieve their pre-COVID levels, with 2021 revenue down 5% from 2019.

“A smoking ban would result in a decline in customers, which would cause job losses, a decline in gaming revenue, and a decline in tax revenue that benefits the state and local economy,” Lupo continued.

Spectrum noted in the report that it was not strictly recommending whether or not the state go ahead with efforts to ban smoking on the casino floors.

Such efforts fell flat last year, but legislative proposals for the ban have gained the support of state Sen. Mike Testa, R-1st District, and Sen. Vincent Polistina, R-2nd District, who represents Atlantic City, as well as senators from across the aisle, like former Gov. Richard Codey, D-27th District, and Senate Health Committee Chair Joe Vitale, D-19th District.

“New Jersey can’t tolerate a law which bans smoking as a health hazard in places other than casinos and simulcasting facilities,” reads a statement from Vitale. “To suggest it’s OK for casino workers to be exposed to second-hand smoke, but not bartenders, waitresses and office clerks is absurd.”

The report found that 21% of visitors to Atlantic City are smokers — who tend to spend more on the gambling floor and on non-gaming services like dining, entertainment and hotels — making them “higher value customers,” according to the report.

Through interviews with casino heads, executives, rank and file workers, customers and anti-smoking groups, Spectrum found much lower hotel occupancy rates when, for example, smoking was banned after casinos were allowed to reopen their brick-and-mortar operations, following mandated COVID-19 closures, in July 2020.

Where there’s smoke …

Granted, 13% of smokers would return to the casino floor even if the ban was in effect, the report found. And the ban on smoking could lure in non-smoking customers — but just not at a level necessary to offset the losses.

Gaming revenue could drop 10.9%, non-gaming revenue could drop $93 million or 6.5%, and tax revenue for the state could drop $44 million, the report said. Meanwhile, the smoking ban could cause the casinos to shed between 1,021 and 2,512 jobs in the first year alone, Spectrum added.

State law allows smoking on 25% of any of the given casino floors in Atlantic City. Opponents of the proposed smoking ban, like Lupo, warned that Atlantic City’s casinos would lose out to establishments in nearby Philadelphia where smoking is not banned.

While casinos still have the option to draw in online gambling revenue, the report notes that less than 10% of online gambling money actually goes to casinos. Most of it is instead split among online gaming companies, as well as tech firms and other overhead expenses.

A coalition of casino workers and the national non-smoking group Americans for Nonsmokers Rights questioned the veracity of what they called an “industry-funded study.”

“This study, paid for by the casino industry, shows once again that they care more about outdated business practices than they do about the lives and health of their workers,” reads a prepared statement from Nicole Vitola, co-leader of Casino Employees Against Smoking’s Effects — or CEASE — and a casino dealer at the Borgata.

CEASE pointed to a recent interview between the gambling publication PlayNJ.com, and Bob Miller, CEO of the trade group the American Gaming Association, who said “having smoking bans on properties hasn’t led to a decrease in business.”

“All signs point to an eventual smoking ban in Atlantic City casinos. It’s a matter of when, not if,” noted PlayNJ.com analyst David Danzis. “The casino industry will need to adapt to a smoke-free business model sooner rather than later.”

Editor’s note: The story has been updated to correct that Sen. Vincent Polistina, R-2nd District, represents Atlantic City and also supports the ban.