New Jersey casinos are facing a predicted dip in revenue of up to 11% and a loss of 2,500 jobs if they implement a new smoking ban, as some parties are pushing for.
“A smoking ban would result in a [Gross Gaming Revenue] decline of between 5.0% and 11.9% among patrons who smoke,” a report read. Meanwhile, “non-smokers attracted to the smoke-free air may increase their play by 1.0% to 1.5% (in GGR).”
Gambling research firm Spectrum Gaming Group published its findings this month after the Casino Association of New Jersey commissioned a report. The association, made up of seven state casinos, received the report in November of last year.
The smoking ban could also cost casinos 1,021 to 2,512 jobs. The report acknowledged possible oversights, including the possible effects of the pandemic and its restrictions. “It is critical to note that such reductions in employment assume that the casinos would be at full employment as they were in 2019,” the report warned.
“At this time, most casinos are short-staffed,” the report notes. Employment is at a 20-year low, according to the casino association. Currently, casinos are staffed at about 50% of what they were in 2003.
NEW JERSEY CASINOS SEE IMPROVING REVENUES
Even nongaming revenue is predicted to dip. Spectrum’s low estimate is 3.0% and its high estimate is 6.5%. That loss adds up to anywhere from $17.2 million and $44 million in gaming taxes.
Spectrum also estimates that about 13% of New Jersey’s population smoke. Casino operators handed over data on their smoking clientele and found that over 20% of casino players in Atlantic City smoke. “Smokers spend significantly more than non-smokers while gambling on a per-capita basis,” the report read.
Proponents of lung health are supporters of the ban. The American Lung Association has advocated for the ban, while already giving New Jersey an “A” for its clean air practices. Smoking is banned statewide in all workplaces. Even within casinos, smoking is allowed in only 25% of floor space.
National Assistant Vice President of State Public Policy for the ALA Michael Seilback admitted that New Jersey’s grade couldn’t get better. “However the continued allowing of smoking in casinos is a major loophole,” Seilback told the Washington Examiner. Seilback predicted that the state would be lauded for the ban.
In 2008, Atlantic City banned smoking for four weeks before quickly allowing smokers again after a reported loss of revenue of 19.5% in the first week alone. Seilback claimed that they “haven’t seen that to be the reality” when it comes to smoke-free casinos.
“2008 was 13 years ago. We saw a host of casinos open up completely smoke-free since then,” Seilback said. “We’re in a completely different climate.”
Iowa, Louisiana, Michigan, and Pennsylvania still allow smoking in their casinos, and nearly all receive grades ranging from “C” to “D” for their air quality. Yet, New Jersey could be driving its smoking casino players to Pennsylvania, according to Casino Association of New Jersey President Joe Lupo.
“This new report clearly demonstrates that a smoking ban would have long-term financial implications for the industry and the region, placing Atlantic City casinos at a competitive disadvantage with Pennsylvania casinos where smoking is permitted,” Lupo said. Seilback confirmed that the ALA is currently lobbying for similar smoking bans in Pennsylvania as well.
Only 30% of New Jersey voters oppose a ban, according to a 2021 poll by the American Cancer Society. Sixty percent of voters support permanently prohibiting smoking indoors at casinos. Seven out of ten voters said they preferred to visit a smoke-free casino to one that allows smoking. Additionally, 89% agree that casino workers have the right to breathe clean, smoke-free air.
“The casino industry has taken significant steps over the years to create a healthier environment for employees and patrons, including limiting smoking to just a fraction of the floor space,” Lupo explained. “We understand this is a difficult issue, but it is important that we create a welcoming and inclusive environment for all of our guests, which include smokers and non-smokers.”
“For the American Lung Association, it’s about the health of our workers and our patrons,” Seilback told the Washington Examiner.
Co-Leader of Casino Employees Against Smoking’s Effects Nicole Vitola released a statement Wednesday calling the study misleading. “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,” Vitola said. “Casinos’ blatant disregard for our well-being is disgraceful, especially after they just received tens of millions of dollars in tax breaks from the State. We cannot continue to choose between our health and a paycheck, and Governor Murphy and a growing, bipartisan group of legislators will not be swayed by the same old casino lobbyist talking points.”
“I am not convinced that the ‘be-all end-all’ for the casino industry in New Jersey is smoking. People don’t go to a casino because they can smoke; they go because they think they can win,” the ban sponsor, state Sen. Shirley Turner, told the Washington Examiner.
“In this day and age, we should not be gambling with people’s health just because casino owners think that ending smoking will reduce their profits,” Turner said.
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Gov. Phill Murphy has previously said he would sign the ban into law. Murphy did not respond to the Washington Examiner’s request for comment.
